Pacific Metals (5541) Q4 2026 earnings summary

Executive summary

• Net sales for FY2026 were ¥9,414 million, with operating profit at ¥4,971 million and ordinary profit at ¥3,323 million, both showing significant improvement from the previous year, aided by inventory write-down reversals and equity-method gains.

• Profit attributable to owners was ¥2,610 million, a turnaround from a prior-year loss, driven by inventory write-down reversals and equity-method affiliate profits.

• Ferronickel sales volume dropped 27.0% year-over-year as the company strategically controlled volume to maintain profitability.

Financial highlights

• Operating profit margin rose to 52.8% in FY2026 from 35.3% in FY2025, while gross loss improved to ¥3,140 million from ¥5,191 million.

• Reversal of inventory write-downs contributed ¥2.3 billion, and equity method profit added ¥7.8 billion.

• LME nickel price applicable to the company declined 10.9% year-over-year to $15,234/t; average exchange rate was ¥150.87/$, 0.7% stronger year-over-year.

• Basic earnings per share was ¥146.04, up from a loss per share of ¥85.52 last year; net assets per share increased to ¥3,619.74.

• Cash and cash equivalents at year-end were ¥18,394 million, down ¥6,580 million from the previous year; equity ratio remained high at 93.5%.

Outlook and guidance

• FY2027 net sales forecasted at ¥10,484 million (+11.4%), with operating profit at ¥6,006 million (+20.8%), but ordinary profit expected to fall sharply to ¥704 million and profit attributable to owners to ¥158 million.

• Production and sales volumes are forecast to decline 14.3% and 9.1% year-over-year, respectively.

• LME nickel price assumed to rise to $17,593/t, and exchange rate to weaken to ¥156.32/$.

• First half expected to be weaker due to additional inventory write-downs, with a reversal anticipated in the second half.

• Ongoing uncertainty from global economic factors, raw material costs, and geopolitical risks.