THK (6481) Q2 2026 earnings summary

Executive summary

• Consolidated revenue for the first half of fiscal 2026 reached ¥151,067 million, up 32.4% year-over-year, driven by strong industrial machinery demand, especially in semiconductors and AI-related sectors, and a weaker yen.

• Operating income surged 268.9% year-over-year to ¥22,483 million, with margin improving to 14.9% from 5.3%, overcoming inflation, tariffs, and one-time expenses through higher sales volume and structural reforms.

• Profit attributable to owners of the parent soared 805.3% to ¥33,744 million, reflecting a significant gain from the transfer of the automotive & transportation business.

• Revenue and operating income exceeded the revised May 2026 plan by ¥13.0 billion and ¥7.0 billion, respectively.

• The automotive & transportation business was divested on June 1, 2026, and is now classified as a discontinued operation.

Financial highlights

• Gross profit increased to ¥51,883 million from ¥33,938 million year-over-year.

• COGS ratio decreased by 4.6 points YoY to 65.7%; SG&A ratio decreased by 4.8 points YoY to 18.6%.

• Net cash provided by operating activities was ¥18,868 million; investing activities used ¥23,660 million, mainly due to the business transfer.

• Total assets increased to ¥480,597 million, and total equity rose to ¥276,000 million as of June 30, 2026.

• Revenue and operating income exceeded revised forecasts.

Outlook and guidance

• Full-year consolidated revenue forecast revised up to ¥310,000 million (+28.9% YoY); operating income forecast at ¥48,000 million (+232.5% YoY).

• Net income forecast for FY2026 is ¥54,800 million (+805.3% YoY).

• Basic earnings per share for the year is projected at ¥488.97.

• Dividend projection revised to ¥195.00 per share for 2026, based on a DOE ratio of 8%.

• Profit increase mainly attributed to higher sales volume and favorable exchange rates.