SMC (6273) Q2 2026 earnings summary

Executive summary

• Net sales for the first half of FY2025 increased 1.3% year-over-year to ¥400,272 million, mainly due to volume growth in Greater China, while operating profit declined 8.8% due to foreign exchange impacts and higher depreciation.

• Profit attributable to owners rose 1.3% to ¥79,185 million, but comprehensive income surged 152.4% year-over-year due to foreign currency translation gains.

• Full-year guidance was revised downward, reflecting delayed recovery in semiconductor-related business and sluggish demand in automotive outside China.

• Capital investment and R&D spending remain robust, with significant ongoing investments in production and technical centers.

Financial highlights

• FY25/2Q net sales: ¥400.2B (+1.3% YoY); operating profit: ¥90.7B (-8.8% YoY); net profit: ¥79.1B (+1.3% YoY).

• Gross profit margin decreased to 45.2% from 47.0% YoY; gross profit for the period was ¥181,040 million.

• Depreciation rose 30.2% YoY; R&D expenses up 9.3% YoY; capital expenditures for six months were ¥111,208 million, up 160.8% YoY.

• Interim dividend of ¥500/share (total ¥31.6B); treasury stock repurchase of ¥21.8B.

• Basic earnings per share for six months was ¥1,245.60, up from ¥1,219.46 YoY.

Outlook and guidance

• Full-year net sales forecast revised to ¥816.0B (-4.0% from previous forecast); operating profit to ¥183.0B (-14.9%); profit attributable to owners to ¥153.0B.

• Basic earnings per share for the year ending March 31, 2026, is projected at ¥2,406.70.

• Forecasts reflect updated FX assumptions: USD/JPY 147.10, EUR/JPY 172, CNY/JPY 20.60.

• Semiconductor recovery now expected in FY2026; automotive demand remains weak outside China.

• Annual dividend forecast maintained at ¥1,000/share.