Tokai Rika (6995) Q2 2027 earnings summary

Executive summary

• H1 FY2027 sales rose 5.8% YoY to ¥333,075 million, while operating profit fell 17.7% to ¥17,562 million and parent profit declined 49.0% to ¥9,934 million.

• Higher Japan production offset lower overseas production volumes; raw-material and fixed-cost increases weighed on operating profit.

Financial highlights

• Ordinary profit declined 29.9% YoY to ¥17,646 million; operating margin fell to 5.3% from 6.8%.

• Gross profit increased to ¥48,192 million from ¥47,870 million, while SG&A rose to ¥30,630 million from ¥26,525 million.

• H1 FX contributed ¥17.7bn to sales and ¥3.3bn to operating profit; sales growth excluding FX was ¥0.5bn.

• Prior-year H1 included ¥2,566 million in gains on sales of investment securities; current-period extraordinary income and loss were nil.

Outlook and guidance

• FY2027 guidance unchanged: sales ¥650,000 million, operating profit ¥30,000 million, ordinary profit ¥33,000 million and parent profit ¥20,000 million.

• Forecast sales are up 0.8% YoY; operating profit is down 15.8%, with a 4.6% operating margin versus 5.5%.

• Forecast basic EPS is ¥238.06; FY2027 estimates incorporate the planned treasury-share acquisition and cancellation.

• Forecast exchange rates are USD ¥154 and EUR ¥176; October–March planning rates are USD ¥150 and EUR ¥170.