Sumitomo Heavy Industries (6302) Q4 2025 earnings summary

Executive summary

• FY2025 saw a gradual economic recovery in Japan and robust US conditions, with early signs of recovery in China and Europe, leading to increased orders across all segments.

• Orders rose 24% year-over-year to JPY1,158.4 billion, but sales were flat at JPY1,066.9 billion.

• Operating profit declined 7% to JPY51.5 billion, ordinary profit fell 4% to JPY47.3 billion, while profit attributable to owners of parent surged 301% to JPY30.9 billion.

• Structural reorganization and a shift to Strategic Business Units (SBUs) are underway to enhance operational efficiency and drive future growth.

• ROIC reached 4.2%.

Financial highlights

• FY2025 orders: JPY1,158.4 billion (+222.3 billion YoY); net sales: JPY1,066.9 billion (-0.4% YoY); operating profit: JPY51.5 billion (-7% YoY); ordinary profit: JPY47.3 billion (-4% YoY); profit attributable to owners of parent: JPY30.9 billion (+301% YoY).

• Comprehensive income: JPY58.0 billion (up 30%).

• Free cash flow turned positive at JPY4.3 billion in FY2025, after negative JPY36.7 billion in FY2024.

• ROIC for FY2025 was 4.2%, down 0.6pt YoY.

Outlook and guidance

• FY2026 forecast: orders JPY1,120.0 billion, net sales JPY1,090.0 billion (+2.2%), operating profit JPY60.0 billion (+16.5% YoY), ordinary profit JPY55.0 billion (+16.3% YoY), profit attributable to owners of parent JPY34.0 billion (+9.9% YoY), operating profit ratio 5.5%.

• ROIC expected to rise to 4.8%, with a dividend per share forecast of JPY145.

• Market conditions in Japan and North America expected to remain strong, while China faces continued weak demand.