Tokai Rika (6995) Q4 2026 earnings summary

Executive summary

• FY2026 saw record net sales of ¥644.7bn, up 4.4% year-over-year, with operating profit rising 1.0% to ¥35.6bn and ordinary profit up 27.5% to ¥43.8bn, driven by increased production, cost recoveries, and new product launches.

• Profit attributable to owners increased 13.1% to ¥29.5bn, and comprehensive income surged to ¥52.0bn from ¥4.0bn the prior year.

• All profit levels achieved historical highs, supported by growth in automotive and esports segments.

• Environmental and governance initiatives advanced, including CO2 reduction, board strategy meetings, and establishment of a Sustainability Committee.

• Financial statements from FY2021 to FY2025 were restated due to errors in tax effect accounting for retirement benefits, resulting in minor downward adjustments to equity and profit figures.

Financial highlights

• Net sales rose 4.4% year-over-year to ¥644.7bn in FY2026.

• Operating profit increased 1.0% to ¥35.6bn, with an operating margin of 5.5%.

• Profit attributable to owners of parent grew 13.1% to ¥29.5bn; EPS reached ¥346.32 (+12.6% YoY).

• Ordinary profit surged 27.5% to ¥43.8bn, aided by forex gains.

• Extraordinary gains included ¥5.8bn from sales of investment securities, offset by a ¥3.2bn impairment loss.

Outlook and guidance

• FY2027 sales are forecast at ¥650.0bn, up 0.8% year-over-year.

• Operating profit is projected to decline 15.8% to ¥30.0bn, with margin dropping to 4.6%.

• Profit attributable to owners of parent expected to fall 32.1% to ¥20.0bn; EPS forecast at ¥234.87.

• Dividend forecast for FY2027 is ¥120 per share, up from ¥115 in FY2026.

• Guidance reflects external uncertainties, including geopolitical risks, inflation, and currency fluctuations.