Sanwa (5929) Q1 2027 earnings summary

Executive summary

• Net sales for the three months ended June 30, 2026, were ¥140.4 billion, a 0.3% decrease year-over-year, mainly due to lower sales volumes in North America, Europe, and Asia, despite steady price pass-through and strong performance in climate change-related products in Japan.

• Operating profit dropped 40.8% year-over-year to ¥5.88 billion, and net profit attributable to owners of parent fell 32.9% to ¥4.84 billion, impacted by lower sales volumes and higher raw material and other costs, especially in North America and Europe.

• The business environment was affected by U.S. tariff policies, rising energy/material costs, and geopolitical risks.

• Strategic initiatives included strengthening core products, expanding service businesses, and digitalization efforts.

Financial highlights

• Consolidated net sales for 1Q FY2026 were ¥140.4 billion, down 0.3% year-over-year.

• Operating profit dropped 40.8% year-over-year to ¥5.88 billion.

• Net profit attributable to owners of parent decreased 32.9% year-over-year to ¥4.84 billion.

• Ordinary profit decreased 36.1% year-over-year to ¥6.65 billion.

• Forex fluctuations had a negative impact on both sales and profits.

Outlook and guidance

• Full-year net sales forecast for FY ending March 31, 2027, is ¥677.0 billion, up 2.5% year-over-year.

• Operating profit is projected at ¥30.2 billion for the first half (down 10.4%) and ¥81.0 billion for the full year (up 2.4%).

• North America business expects improved sales and profits in 2Q and 1H, with full-year recovery anticipated in 3Q and 4Q due to operational improvements and FX effects.

• Annual dividend forecast is maintained at ¥146 per share, including a commemorative dividend.

• No changes have been made to the previously announced consolidated results forecasts.