Sumitomo Forestry (1911) Q4 2025 earnings summary

Executive summary

• Net sales rose 10.4% year-over-year to ¥2,267.6 billion, driven by the acquisition of Metricon in Australia and strong domestic housing orders, but operating income fell 13.3% to ¥168.7 billion and net income attributable to shareholders declined 8.5% to ¥106.7 billion due to weaker U.S. housing performance and lower profit margins.

• Comprehensive income dropped 30.6% year-over-year, reflecting weaker profitability despite higher sales.

• Segment restructuring was implemented, creating a new Real Estate Business segment and renaming the Global Construction and Real Estate segment to Overseas Housing.

• The company launched the three-year Medium-Term Management Plan “Mission TREEING 2030 Phase 2,” focusing on decarbonization, global expansion, and business integration.

• A 3-for-1 stock split was executed with a record date of June 30, 2025.

Financial highlights

• Gross profit increased to ¥524.6 billion, but operating margin declined to 7.4% from 9.5% year-over-year.

• Operating income decreased 13.3% year-over-year to ¥168.7 billion, while recurring income fell 11.6% to ¥174.9 billion.

• Net income dropped 8.5% year-over-year to ¥106.7 billion.

• Equity ratio decreased to 39.0% from 40.6% year-over-year.

• Extraordinary income included a decrease in estimated payments for U.S. performance-based acquisition consideration.

Outlook and guidance

• FY12/2026 forecast: Net sales expected to rise 14.2% to ¥2,590.0 billion, but recurring income and net income are projected to decline 8.5% and 10.9% year-over-year, respectively, due to lower profit margins and higher costs.

• Operating income for FY2026 expected to decline 6.9%.

• Dividend forecast for FY12/2026 is ¥50 per share, maintaining a payout ratio of 30% or higher.

• Continued focus on synergies, efficiency, and capital efficiency in U.S. and domestic operations.