YAMATO KOGYO (5444) Q1 2026 earnings summary

Executive summary

• Q1 FY2026/3 saw a challenging environment with intensified competition from low-priced Chinese steel, especially in ASEAN, and weak demand; US operations remained profitable.

• Group-wide sales volume dropped 31.5% YoY to 925K tons, mainly due to withdrawal from the Middle East business.

• Net sales rose 15.1% YoY to ¥39,199 million, but operating profit fell 28.5% to ¥1,115 million and profit attributable to owners dropped 66.4% to ¥5,911 million.

• Deteriorating market conditions, especially in ASEAN, and additional losses related to the Middle East business impacted results.

• Additional loss of 5.5B yen recognized related to Middle East business share transfer.

Financial highlights

• Net sales rose 15.1% YoY to ¥39,199 million, but operating profit margin dropped to 2.8% (-1.7pp YoY).

• Ordinary profit declined sharply to ¥10,433 million from ¥24,689 million YoY.

• Comprehensive income turned negative at ¥(16,758) million, mainly due to foreign currency translation losses.

• Operating cash flow was ¥32,324 million, investing cash flow -¥80,189 million, and financing cash flow -¥17,509 million.

• Basic earnings per share fell to ¥95.70 from ¥275.87 YoY.

Outlook and guidance

• Full-year forecast revised downward: net sales expected at ¥147,000 million, operating profit at ¥2,000 million, and profit attributable to owners at ¥34,000 million.

• FY2026/3 ordinary profit forecasted to decrease 8.1% YoY to 50.0B yen; net sales expected to fall 12.6% YoY.

• Operating profit margin projected to decline to 1.4%; continued weak demand and price competition anticipated, except in the US.

• US segment expected to outperform prior forecasts, while Japan, Thailand, and Indonesia are projected to underperform.