SMC (6273) Q2 2025 earnings summary

Executive summary

• Net sales for FY24 Q2 were ¥395.0B, up 0.4% year-over-year, with growth in Greater China offset by declines in Japan, North America, and Europe.

• Operating profit declined 5.4% year-over-year to ¥99.4B, impacted by higher cost ratios and increased SG&A expenses.

• Net profit dropped 22.6% year-over-year to ¥78.1B, with comprehensive income falling sharply due to negative foreign currency translation adjustments.

• Ordinary profit fell 22.6% year-over-year to ¥104.3B, mainly due to increased foreign exchange losses.

• Sales growth in Greater China (+7–8.7% YoY) offset declines in other regions.

Financial highlights

• Gross margin decreased to 47.0% from 47.7% year-over-year; gross profit was ¥185.5B.

• SG&A expenses rose 4.0% year-over-year.

• Depreciation and R&D expenses increased slightly year-over-year.

• Total assets as of September 30, 2024, were ¥2,061.7B, down 1.6% from March 31, 2024.

• Net assets stood at ¥1,878.7B, with an equity-to-asset ratio of 91.1%.

Outlook and guidance

• FY24 net sales forecast revised down to ¥820.0B (from ¥840.0B), still up 5.6% year-over-year.

• Operating profit forecast cut to ¥214.0B (from ¥234.0B), down 8.5% from FY23.

• Net profit guidance reduced to ¥167.0B, a 6.3% decrease year-over-year.

• Dividend per share maintained at ¥1,000, up from ¥950 in FY2024.

• Basic earnings per share for the year projected at ¥2,604.57.