Valqua (7995) Q2 2026 earnings summary

Executive summary

• Net sales for 1-2Q FY3/2026 declined 10.0% year-over-year to ¥27.08 billion, with gross profit down 3.9% to ¥11.59 billion.

• Operating profit rose 8.8% year-over-year to ¥3.18 billion, and profit attributable to owners increased 27.7% to ¥2.55 billion, exceeding forecasts due to deferred tax assets from a planned transfer of a Chinese subsidiary.

• Segment changes were implemented due to the sale of the silicon wafer reclaim business, impacting historical comparisons.

• Orders received totaled ¥26.86 billion, with an order backlog of ¥11.06 billion at period end.

Financial highlights

• Gross profit margin for 1-2Q FY3/2026 was 42.8%, and operating profit margin was 11.8%.

• EPS for the period was ¥144.93.

• Cash and deposits at the end of 2Q FY3/2026 were ¥7.97 billion, with total assets at ¥79.79 billion.

• Net interest-bearing debt increased to ¥8.05 billion, with a DER of 0.30 times.

• Shareholders' equity ratio was 64.3%, down from 64.9% at the previous fiscal year end.

Outlook and guidance

• Full-year FY3/2026 net sales forecast is ¥62.0 billion (+3.1% YoY), with operating profit expected at ¥7.0 billion (+23.5% YoY) and profit attributable to owners of parent at ¥4.8 billion (+2.6% YoY).

• Second half sales are projected to rise, driven by high-performance seals and recovery in fluororesin tanks.

• Seal Products Business net sales forecasted at ¥45.2 billion (+10.3% YoY), High Performance Plastics Products at ¥16.8 billion (+2.9% YoY).

• Dividend forecast maintained at ¥150 per share for the full year.

• Forecast incorporates demand fluctuations, higher energy/raw material costs, and logistics expenses.