Sumitomo Forestry (1911) Q2 2025 earnings summary

Executive summary

• Net sales rose 9.5% year-over-year to ¥1,074.8 billion in Q2 FY12/2025, driven by the acquisition of Metricon in Australia, but income declined due to a slump in the U.S. housing business and higher expenses.

• Recurring income fell 5.9% year-over-year to ¥87.5 billion, and net income dropped 10.3% to ¥48.6 billion.

• Comprehensive income swung from ¥179,474 million in the prior year to a loss of ¥10,991 million, mainly due to negative foreign currency translation adjustments.

• Australian and domestic housing businesses outperformed initial forecasts, while U.S. housing and real estate faced demand slowdowns.

• A 3-for-1 stock split was executed on July 1, 2025, to improve share liquidity and broaden the investor base.

Financial highlights

• Operating income decreased 8.9% year-over-year to ¥83.0 billion.

• Gross profit increased 5.6% to ¥254.6 billion, but SG&A expenses rose 14.3% to ¥171.7 billion.

• Net cash provided by operating activities improved to ¥8,473 million from a negative ¥20,467 million in the prior year.

• Cash and deposits decreased to ¥142,198 million as of June 30, 2025, from ¥181,043 million at year-end 2024.

• Total assets stood at ¥2,247,210 million, with an equity ratio of 39.1% as of June 30, 2025.

Outlook and guidance

• Full-year net sales forecast revised down to ¥2,320.0 billion (from ¥2,556.0 billion), with recurring income forecast at ¥170.0 billion, down from previous guidance.

• Net income forecast for FY12/2025 is ¥96.0 billion, a 17.6% decrease year-over-year.

• Net income per share for the full year is projected at ¥156.45 post-stock split.

• Annual dividend forecast set at ¥150 per share (pre-stock split basis), up ¥5 from the previous year.

• U.S. market recovery expected in the next fiscal year; Australian and domestic housing to remain strong.