YAMATO KOGYO (5444) Q2 2025 earnings summary

Executive summary

• Group-wide sales volume for the six months ended September 2024 fell 9.2% year-over-year to 2.60 million tons, impacted by weak demand and competition from inexpensive Chinese steel, especially in ASEAN markets.

• Net sales for the six months ended September 30, 2024, decreased 2.5% year-over-year to ¥78,359 million, with operating profit down 36.3% to ¥5,006 million and profit attributable to owners of parent down 21.4% to ¥28,549 million.

• Earnings declined due to slumping steel demand, intensified competition from Chinese products, and production suspension in Japan, but high earnings were maintained in the US and a new Indonesian subsidiary contributed positively.

• The acquisition of PT Garuda Yamato Steel in Indonesia was completed, adding a new consolidated subsidiary and increasing assets and goodwill.

• Despite profit declines, consolidated performance remained relatively high due to strong US business and a successful start in Indonesia.

Financial highlights

• Operating profit margin was 6.4%, down 3.4 percentage points year-over-year.

• ROE annualized at 10.2%, down 5.3 percentage points year-over-year.

• Capital adequacy ratio stood at 84.2% as of September 30, 2024, down 1.7 percentage points year-over-year.

• Ordinary profit fell 17.3% year-over-year to ¥41,877 million.

• Profit attributable to owners of parent decreased 21.4% year-over-year to ¥28,549 million.

Outlook and guidance

• FY2025/3 full-year forecast revised downward: net sales expected at ¥170,000 million, operating profit at ¥11,000 million, ordinary profit at ¥75,000 million, and profit attributable to owners of parent at ¥52,500 million.

• Weak global steel demand and softening prices expected to persist, with continued high exports from China.

• Segment forecasts anticipate decreased profit year-over-year across Japan, Thailand, Indonesia, US, Vietnam, Middle East, and South Korea, with some recovery expected in Thailand and Indonesia.