Sanwa (5929) Q2 2026 earnings summary

Executive summary

• Net sales for 1H FY2025 were JPY 309.2 bn, down 1.5% YoY, but operating profit rose 4.3% to JPY 33.7 bn and profit attributable to owners increased 11.3% to JPY 26.45 bn, exceeding initial forecasts.

• Record-high profits were driven by strong Japan business, offsetting weaker overseas results, amid a challenging environment with U.S. tariffs, trade friction, a slowing Chinese economy, and volatile foreign exchange rates.

• Strategic initiatives included strengthening core businesses, expanding disaster preparedness and smart products, and enhancing sustainability and human capital management.

• Shareholder returns enhanced with a new share repurchase program and increased dividends.

Financial highlights

• 1H FY2025 consolidated net sales: JPY 309.2 bn (-1.5% YoY), operating profit: JPY 33.7 bn (+4.3% YoY), profit attributable to owners: JPY 26.45 bn (+11.3% YoY), EPS: JPY 124.05.

• Operating profit margin for 1H FY2025: 10.9% (vs. 10.3% prior year); ordinary profit: JPY 34.5 bn (+0.9% YoY).

• Full-year FY2025 forecasts: net sales JPY 654.0 bn (-1.3% YoY), operating profit JPY 81.0 bn (+0.6% YoY), profit attributable to owners JPY 58.0 bn (+0.8% YoY), EPS JPY 270.70, operating margin 12.4%.

• ROE: 19.0%, ROIC: 18.5%, PER: 18.0x, PBR: 3.2x as of March 31, 2025.

• Comprehensive income dropped to JPY 15.83 bn from JPY 47.22 bn a year earlier, mainly due to negative foreign currency translation adjustment.

Outlook and guidance

• Initial FY2025 forecasts maintained, with Japan expected to drive results and overseas markets remaining sluggish.

• North America and Europe face slow recovery due to tariffs and high interest rates; market recovery expected from FY2026.

• Asia aims for local-currency sales growth and operational improvements, especially in Vietnam and Taiwan.

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