TOKYO KEIKI (7721) Q2 2027 earnings summary

Executive summary

• H1 FY2027 net sales rose 3.5% YoY to ¥25,284 million; operating profit fell 10.4% to ¥647 million as Defense & Communications Equipment sales were more concentrated in Q4.

• Profit attributable to owners of parent increased 12.6% to ¥945 million, supported by subsidies and gains on strategic shareholdings.

• Record order backlog reached ¥64,883 million, up 4.8% YoY; FY2027 guidance was raised on Marine Systems strength.

Financial highlights

• H1 net sales were ¥25,284 million, up ¥859 million or 3.5% YoY; operating profit was ¥647 million, down ¥75 million or 10.4%.

• Ordinary profit was ¥821 million, down 0.5% YoY; comprehensive income rose to ¥1,592 million from ¥965 million.

• Gross profit increased to ¥6,628 million from ¥6,330 million; SG&A rose to ¥5,982 million from ¥5,608 million.

• Operating cash flow was ¥1,890 million versus ¥1,600 million; cash and cash equivalents ended the period at ¥3,943 million.

Outlook and guidance

• FY2027 forecast: net sales ¥70,600 million, operating profit ¥7,300 million, ordinary profit ¥7,340 million, parent profit ¥5,610 million and EPS ¥341.33; all forecasts were raised from Q1.

• Revised guidance implies YoY growth of 15.4% in sales, 36.1% in operating profit and 40.1% in net profit; forecast operating margin is 10.3%, up 1.6 percentage points.

• USD/JPY assumption remains ¥159 from Q3 onward; H2 operating-profit sensitivity is +¥11 million for each ¥1 of yen depreciation.