Sanken Electric Co (6707) Q2 2025 earnings summary

Executive summary

• 1H FY2024 saw significant structural changes, including the partial sale of Allegro shares and deconsolidation of Allegro MicroSystems and Polar Semiconductor, impacting reported results and financial structure.

• Net income for 1H FY2024 was ¥4.4B, with major one-time gains from Allegro share sale offset by extraordinary losses and restructuring costs.

• Operating loss for 1H FY2024 was ¥5,658 million, compared to an operating profit of ¥17,158 million in the prior year period.

• The company is restructuring following the Noto Peninsula Earthquake, closing the Shika Plant and reorganizing back-end production.

• Sanken Core business showed resilience, with sales up 9.2% year-over-year to ¥44.7B in 1H FY2024.

Financial highlights

• 1H FY2024 sales totaled ¥72.8B, down 40.1% year-over-year due to Allegro and PSL deconsolidation.

• Operating profit for 1H FY2024 was -¥5.7B, reflecting one-time items and business restructuring.

• Net income per share for 1H FY2024 was ¥184.27, with large fluctuations from extraordinary items.

• Sanken Core operating profit improved by ¥3.4B year-over-year, with a full-year forecast of ¥0.4B.

• Gross profit margin dropped as gross profit fell from ¥49,100 million to ¥16,382 million year-over-year.

Outlook and guidance

• FY2024 full-year sales forecast at ¥118.3B, down 49.7% year-over-year due to scope changes.

• Operating loss projected at ¥5,600 million and ordinary loss at ¥15,800 million for the fiscal year ending March 31, 2025.

• Profit attributable to owners of parent forecast at ¥46,200 million, with basic EPS of ¥1,913.15.

• Sanken Core sales expected to reach ¥88.2B, up 12.4% year-over-year, with a focus on automotive, white goods, and industrial markets.

• The company is focusing on recovery, new product development, pricing improvements, and cost reductions, aiming for full-scale profitability improvement from FY2026.