Sanken Electric Co (6707) Q2 2026 earnings summary

Executive summary

• Q2 FY March 2026 saw a significant decline in net sales and operating profit, mainly due to a sharp fall in white goods sales in China, rising material costs, and the exclusion of Allegro MicroSystems, Inc. from consolidation.

• Production adjustments, cost reduction initiatives, and a voluntary retirement program were implemented to address inventory buildup and fixed costs.

• The company completed a major share repurchase, canceling 16.6% of total shares outstanding.

• Absorption-type merger with POWDEC K.K. was executed to accelerate the GaN power device business.

• Loss attributable to owners of parent was ¥1,397 million for H1, compared to a profit of ¥48,000 million last year.

Financial highlights

• H1 FY March 2026 net sales were ¥41,011 million, down 43.7% year-over-year.

• Operating loss for H1 was ¥916 million, improved from a ¥5,658 million loss in the prior year.

• Basic earnings per share dropped to ¥(65.18) for H1.

• Extraordinary gains included a ¥1.2 billion gain on sale of non-current assets and a ¥1.2 billion gain on change in equity.

• Cash and cash equivalents at period end were ¥28,840 million, down ¥31,903 million from March 31, 2025.

Outlook and guidance

• Full-year FY March 2026 net sales forecast revised downward to ¥78,800 million, reflecting continued weakness in Chinese white goods demand.

• Operating loss for the full year is projected at ¥6,000 million, with ordinary loss at ¥8,300 million and net loss at ¥9,700 million.

• Earthquake-related costs for Ishikawa Sanken are estimated at ¥900 million.

• No interim or year-end dividend is planned.

• Market share in white goods expected to continue declining due to competition and supply chain shifts in China.