| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue | ¥384.2B | ¥308.0B | +24.7% |
| Operating Income | ¥44.2B | ¥22.7B | +94.7% |
| Ordinary Income | ¥46.4B | ¥25.6B | +81.4% |
| Net Income (Reported) | ¥5.1B | ¥3.8B | +33.2% |
| ROE | 1.2% | 1.0% | - |
For the fiscal year ended March 2026, Revenue was ¥384.2B (YoY +¥76.2B, +24.7%), Operating Income was ¥44.2B (YoY +¥21.5B, +94.7%), Ordinary Income was ¥46.4B (YoY +¥20.8B, +81.4%), and Net income attributable to owners of parent was ¥16.4B (YoY -¥3.8B, -18.9%). Revenue increased for the second consecutive year, achieving approximately 25% growth, and the operating margin improved to 11.5% from 7.4% a year earlier (+4.1pt). However, net income attributable to owners of parent declined, and as indicated by the divergence with Reported Net Income of ¥5.1B (prior year ¥3.8B), distortions emerged in the lower part of the income statement due to non-controlling interests and special gains/losses. While operating earnings power improved materially, impairments of ¥24.7B and other items caused ROE to fall substantially to 1.2% (prior year 5.3%). The equity ratio remained high at 77.1% (prior year 82.2%), cash and cash equivalents increased to ¥151.2B (YoY +¥43.1B), Operating Cash Flow (OCF) was ¥36.5B, and Free Cash Flow was ¥17.2B, indicating continued healthy cash generation. Dividends were ¥47 per year (interim ¥23, year-end ¥24), maintaining a payout ratio of 34.4%.
[Revenue] Revenue of ¥384.2B represented a substantial increase of ¥76.2B YoY (+24.7%). By segment, the core Wire & Processed Products segment recorded ¥335.2B (prior year ¥262.1B, +27.9%), contributing roughly ¥73B of the increase and accounting for about 96% of the revenue uplift. The Electronic & Medical Components segment delivered ¥48.8B (prior year ¥45.6B, +7.0%), an increase of about ¥3.2B. In Wire & Processed Products, the inclusion of Yoshinogawa Electric Wire Co., Ltd. within the consolidated scope from Q1 contributed to revenue expansion, and demand for key product groups such as automotive cables and wire harnesses appeared to remain firm. Electronic & Medical Components maintained steady growth of 7%.
[Profitability] Operating Income of ¥44.2B was up ¥21.5B YoY (+94.7%), with the operating margin improving to 11.5% from 7.4% (+4.1pt). Segment operating income was ¥44.4B for Wire & Processed Products (prior year ¥22.1B, margin 13.2%) and ¥9.1B for Electronic & Medical Components (prior year ¥9.0B, margin 18.6%), with roughly ¥22B of increased profit from Wire & Processed Products driving the consolidated improvement. Scale benefits from higher sales and efficient control of cost of goods sold and SG&A produced operating leverage. Ordinary Income rose to ¥46.4B (prior year ¥25.6B, +81.4%), similarly reflecting a net increase in non-operating income of approximately ¥2.2B. Conversely, Net income attributable to owners of parent declined to ¥16.4B (prior year ¥20.3B, -18.9%). The main cause was an impairment loss of ¥24.7B (impairment of fixed assets) recorded in the Wire & Processed Products segment, along with one-off items such as a gain on bargain purchase of ¥4.4B recognized in Q1, which substantially affected lower-line profitability. The difference between Reported Net Income of ¥5.1B and Net income attributable to owners of parent of ¥16.4B (¥11.3B gap) was driven by non-controlling interests (¥11.1B). Consequently, while top-line growth and operating profit trends were positive, special losses and non-controlling interests led to an effective decline at the net income level.
The Wire & Processed Products segment achieved Revenue of ¥335.2B (YoY +27.9%) and segment profit of ¥44.4B (YoY +101.0%, margin 13.2%), delivering both revenue growth and a large profit increase. The consolidation of Yoshinogawa Electric Wire contributed to both revenue and profit and generated a gain on bargain purchase of ¥4.4B, but concurrently an impairment loss of ¥24.7B was recorded, reducing profit at the special items stage. The Electronic & Medical Components segment posted Revenue of ¥48.8B (YoY +7.0%) and segment profit of ¥9.1B (YoY +0.7%, margin 18.6%) and remained solid with a high profit margin. Both segments were healthy on a segment-profit basis before corporate allocations, with Wire & Processed Products’ substantial profit contribution leading the consolidated results.
[Profitability] The operating margin was 11.5%, an improvement of 4.1pt from 7.4% last year, driven by margin improvement and scale expansion in Wire & Processed Products. ROE fell sharply to 1.2% from 5.3% due to special losses and non-controlling interests affecting net income, temporarily degrading capital efficiency. ROA (based on Ordinary Income) improved to 8.9% from 5.5%, reflecting better asset efficiency. [Cash Quality] OCF of ¥36.5B is 7.2x Reported Net Income of ¥5.1B and 2.2x Net income attributable to owners of parent of ¥16.4B; excluding non-cash items such as depreciation and impairment, underlying cash generation is strong. The accrual ratio is negative at -3.5% ((OCF ¥36.5B - Reported Net Income ¥5.1B) / Total assets ¥566.6B), indicating good cash backing of earnings. [Investment Efficiency] Basic EPS was ¥105.87, down -19.1% from ¥130.82, pressured by special losses and non-controlling interests. BPS was ¥2,728.06, up +9.1% from ¥2,500.11, reflecting accumulation of equity. [Financial Soundness] The equity ratio remained high at 77.1% (prior year 82.2%), with Net assets of ¥436.6B against Total assets of ¥566.6B. Cash and cash equivalents rose to ¥151.2B from ¥108.0B (+40.0%), enhancing financial flexibility.
OCF was ¥36.5B, slightly down -6.2% from ¥38.9B the prior year, but remains 7.2x Reported Net Income of ¥5.1B and 2.2x Net income attributable to owners of parent of ¥16.4B; after factoring non-cash charges such as impairment of ¥24.7B, cash generation appears solid. Investing Cash Flow was -¥19.2B (prior year -¥22.4B), reducing outflows, and Free Cash Flow was ¥17.2B (prior year ¥16.5B), roughly steady year-on-year. Financing Cash Flow recorded a net inflow of ¥15.3B (prior year -¥9.1B), and despite dividend payments of ¥6.3B, net inflows from financing and effects of new consolidated scope led to positive financing cash flow. As a result, cash and cash equivalents increased by ¥43.1B from ¥108.0B at the prior fiscal year-end to ¥151.2B, significantly strengthening the liquidity buffer. Free Cash Flow coverage of dividends was 2.7x (Free Cash Flow ¥17.2B / Dividend payments ¥6.3B), indicating dividends and investments can be funded from internal cash.
There is a wide divergence between Ordinary Income of ¥46.4B and Net income attributable to owners of parent of ¥16.4B; the primary drivers of the ¥30.0B gap are special losses of ¥24.7B (impairment losses) and non-controlling interests of ¥11.1B. Although a gain on bargain purchase of ¥4.4B was recognized as a special gain, the impairment substantially outweighed it, making the net-income-level effects prominent and temporary. The impairment loss resulted from revaluation of fixed assets in the Wire & Processed Products segment; while a non-cash charge that does not directly affect future operating cash generation, it depressed accounting profits. Given OCF of ¥36.5B, cash realization of recurring earnings is healthy and the underlying earnings quality is sound. The composition of non-operating income is undisclosed, but Ordinary Income exceeds Operating Income by ¥2.2B, suggesting modest positive contributions from financial income or equity-method associates. Comprehensive income was ¥43.8B (prior year ¥18.0B), significantly above Net income attributable to owners of parent of ¥16.4B, implying other comprehensive income of roughly ¥27.4B, potentially reflecting favorable foreign currency translation adjustments or actuarial gains on retirement benefit adjustments.
Full-year guidance projects Revenue ¥430.0B (YoY +11.9%), Operating Income ¥45.0B (YoY +1.9%), Ordinary Income ¥47.0B (YoY +1.3%), and Net income attributable to owners of parent ¥34.0B, indicating modest growth in profits alongside revenue growth. Management plans to add ¥45.8B to current-period Revenue of ¥384.2B, assuming continued growth. Operating Income is targeted to increase modestly by ¥0.8B from ¥44.2B to ¥45.0B, with the operating margin expected to moderate to approximately 10.5% from this period’s 11.5%, reflecting conservative assumptions about rising costs associated with higher sales. Notably, Net income attributable to owners of parent is forecast at ¥34.0B, about 2.1x the current period’s ¥16.4B, with EPS forecast at ¥218.71 (approx. 2.1x current-period ¥105.87). This substantial recovery in net income assumes the one-off impairment loss of ¥24.7B and other temporary items will not recur in the following year, implying a return to normalized earnings power. Dividend guidance is ¥25 per year (down ¥22 from ¥47 this period), but this per-share figure is adjusted for gratuitous allotments of treasury shares (stock dividends), so care is needed when assessing the effective dividend level. Progress toward the full-year plan stands at 89.3% for Revenue, 98.1% for Operating Income, and 98.7% for Ordinary Income, indicating that operating-stage targets are largely achieved and only modest incremental gains are expected in the remainder of the fiscal year.
Annual dividend was ¥47 (interim ¥23, year-end ¥24), a substantial increase of ¥25 from ¥22 in the prior year. The reported payout ratio is 34.4%, which is within a sustainable range. With total dividends of ¥6.3B and Free Cash Flow of ¥17.2B, FCF coverage is 2.7x, indicating ample room and a healthy balance between retained earnings and dividends. DOE (dividend on equity) relative to BPS of ¥2,728.06 is 1.8% (same as prior year), demonstrating steady dividend yield on equity. Note that gratuitous allotments of treasury shares of 0.05 shares per common share were implemented in April 2025 and April 2026; consequently, the FY2027 dividend guidance of ¥25 is presented on a post-allotment per-share basis. No share buyback disclosure was provided; shareholder returns currently center on dividends. Given cash and cash equivalents of ¥151.2B representing 26.7% of total assets, there is substantial liquidity to support expanded returns or growth investments; however, because net income was depressed by impairments this period, any enhancement in returns is likely to be contingent on confirming earnings normalization in subsequent periods.
Impairment reoccurrence risk: The company recorded impairment losses of ¥24.7B this period, reflecting tightened assessment of fixed-asset recoverability. Particularly in the Wire & Processed Products segment, future demand volatility or deteriorating market conditions could prompt additional impairment charges. Against Total assets of ¥566.6B, the impairment represents roughly 4.4%, and its impact on asset efficiency and earnings stability cannot be ignored.
Volatility of non-controlling interests: Non-controlling interests this period were approximately ¥11.1B, or about 68% of Net income attributable to owners of parent of ¥16.4B, meaning subsidiary earnings structures can materially influence consolidated profit attributable to the parent. With the consolidation of Yoshinogawa Electric Wire, profit allocations to non-controlling interests may continue to pressure parent-company profits.
Raw material and FX volatility: Fluctuations in prices of non-ferrous metals such as copper—the principal raw material for wire products—and exchange rate movements can affect gross margins and non-operating results. The fact that comprehensive income of ¥43.8B substantially exceeded Net income of ¥16.4B suggests large positive other comprehensive income, indicating sensitivity to currency translation adjustments. Future yen appreciation or raw material price surges could compress profitability.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 11.5% | 7.8% (4.6%–12.3%) | +3.7pt |
| Net Margin | 1.3% | 5.2% (2.3%–8.2%) | -3.8pt |
Operating margin exceeds the industry median by 3.7pt, placing the company in the upper range, but net margin underperforms the median by 3.8pt due to impairment losses and other items, illustrating that operating-stage profitability was largely offset at the bottom line.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 24.7% | 3.7% (-0.4%–9.3%) | +21.0pt |
Revenue growth rate outperformed the industry median by 21.0pt, highlighting marked top-line expansion.
※ Source: Company compilation
Operating-stage earning power improved materially with an operating margin of 11.5% (YoY +4.1pt), exceeding the industry median of 7.8%. Margin expansion in Wire & Processed Products (13.2%) was a key driver, supported by consolidation of Yoshinogawa Electric Wire and robust demand for core products, which delivered scale benefits. Full-year guidance is for Operating Income of ¥45.0B (+1.9%), roughly flat, but the projected decline in operating margin to ~10.5% incorporates anticipated cost increases with higher sales and is therefore conservative; effective cost control could allow upside. It will be important to monitor whether the improvement in operating earnings is structural or a temporary scale effect in subsequent quarterly trends.
At the net-income stage, impairment losses of ¥24.7B and non-controlling interests of ¥11.1B led to Net income attributable to owners of parent of ¥16.4B (-18.9%) and ROE of 1.2%, significantly reducing capital efficiency. The full-year plan assumes a sharp rebound to ¥34.0B (EPS ¥218.71), predicated on the absence of one-off items. With a payout ratio of 34.4% and FCF coverage of 2.7x, shareholder return capacity is sufficient, and normalization of earnings could support dividend increases or efficient deployment of equity (growth investment, M&A, additional returns). Investors will focus on concrete measures to improve capital efficiency, backed by cash of ¥151.2B and an equity ratio of 77.1%.
This report was auto-generated by AI analyzing XBRL financial statement data and is provided as financial analysis material. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company from public financial statements. Investment decisions are your responsibility; consult professional advisors as needed.