UT Group Co (2146) Q3 2026 earnings summary

Executive summary

• Operating income rose significantly year-over-year in 3Q FY3/2026, driven by improved profitability measures, while net sales remained flat compared to 3Q FY3/2025, excluding the impact of the Vietnam Business sale.

• Gross income margin improved due to the sale of the low-margin Vietnam Business and operational enhancements.

• The company renewed its medium-term business plan, focusing on efficiency, stable growth, human capital investment, and diversification into the personnel referral market.

• Net income attributable to owners of the parent fell 35.5% to ¥5,366 million, reflecting the absence of prior-year extraordinary gains from subsidiary sales.

Financial highlights

• Net sales (excluding divested businesses): ¥125.3 billion, up 0.5% year-over-year; total net sales for the first nine months: ¥125,329 million, down 8.4% year-over-year due to the Vietnam Business sale.

• Gross income: ¥24.4 billion, up 5.8% year-over-year; gross margin improved to 19.5%.

• Operating income: ¥8.08 billion, up 22.8% year-over-year; operating margin at 6.5%.

• EPS: ¥9.30 (basic), down from ¥13.94 in the prior year due to absence of extraordinary gains; diluted EPS ¥8.81.

• Number of technical employees: 33,126, down 2.7% year-over-year.

Outlook and guidance

• FY3/2026 sales are expected to remain flat year-over-year due to hiring challenges and U.S. tariffs impacting the Motor & Energy Business.

• Full-year FY3/2026 guidance: net sales ¥168,000 million (+13.7% YoY), operating income ¥9,500 million (+17.7%), net income ¥6,100 million (-32.0%), EPS ¥10.60 (post-split).

• Dividend payout ratio set at 100% with a minimum DPS of ¥10 (post-split) through FY3/2029.

• Management continues to invest in human capital and aims to improve hiring efficiency and retention.