Sanwa (5929) Q2 2027 earnings summary

Executive summary

• H1 FY2027 net sales rose 2.6% YoY to ¥317,387 million; operating profit fell 12.9% to ¥29,332 million and net profit attributable to owners fell 16.3% to ¥22,142 million.

• Full-year net sales forecast remained ¥677,000 million, while operating profit guidance was reduced to ¥72,000 million; the annual dividend forecast was ¥169 per share.

• The FY2027 operating profit target was reset to ¥82–85bn from ¥95bn, while the three-year share buyback target increased to ¥100bn.

Financial highlights

• H1 net sales were ¥317,387 million, up 2.6% YoY; volume reduced revenue by ¥16.9bn, offset by ¥9.0bn from pricing and ¥16.1bn from FX.

• Operating profit was ¥29,332 million, down 12.9%; ordinary profit fell 11.5% to ¥30.53bn and net profit attributable to owners fell 16.3% to ¥22,142 million.

• Operating profit declined ¥4.37bn YoY: volume impact was -¥7.01bn and raw-material and other cost impacts were -¥3.01bn, partly offset by ¥8.97bn from selling prices.

• Gross profit was ¥104,269 million versus ¥102,585 million; SG&A rose to ¥74,936 million from ¥68,890 million.

• EPS was ¥106.04 versus ¥124.05 YoY; comprehensive income rose to ¥28,193 million from ¥15,834 million.

Outlook and guidance

• Full-year net sales forecast is ¥677,000 million, operating profit ¥72,000 million, ordinary profit ¥74,000 million and net profit attributable to owners ¥45,000 million.

• Forecast YoY changes are sales +2.5%, operating profit -9.0%, ordinary profit -8.2% and net profit attributable to owners -24.7%; forecast EPS is ¥216.81.

• Operating profit guidance was reduced from ¥81.0bn to ¥72.0bn, reflecting weaker volume and higher-than-expected costs despite price pass-through.

• FY2027 operating profit target reset to ¥82–85bn from ¥95bn; North American profit-structure reform is expected to contribute $40–50mn.