Japan Aviation Electronics Industry (6807) investor relations material

Executive summary

• Net sales for FY2025 reached ¥227.9 billion, up 3% year-over-year, driven by growth in automotive and industrial/infrastructure segments, despite a decline in mobile device revenue and sluggish UIS business.

• Operating profit dropped 43% year-over-year to ¥8.94 billion due to higher material costs, price declines, unfavorable product mix, and increased new product launch costs.

• Profit attributable to owners of parent dropped to ¥7.07 billion, a 39% decrease, despite gains from partial sales of investment securities.

• Aerospace business saw sales growth in aviation & space amid expanding defense spending, offsetting declines in industrial/infrastructure markets.

Financial highlights

• Net sales: ¥227.9 billion (+3% YoY); operating profit: ¥8.94 billion (-43% YoY); net profit: ¥7.07 billion (-39% YoY); ordinary profit: ¥8.25 billion (-44% YoY).

• Extraordinary profit of ¥2.3 billion from sale of investment securities and impairment loss of ¥0.4 billion in 2H FY2025.

• Comprehensive income rose 24.5% to ¥13.44 billion.

• Dividend maintained at ¥60 per share; payout ratio 57.2%.

• Free cash flow turned negative at -¥24.5 billion; interest-bearing debt increased by ¥4.8 billion.

Outlook and guidance

• FY2026 net sales projected at ¥240 billion (+5% YoY); operating profit forecast at ¥9.5 billion (+6% YoY).

• Automotive and industrial/infrastructure segments expected to drive growth; mobile device sales projected to decline.

• Persistent high material costs and increased depreciation expected to weigh on profits, but higher selling prices, improved product mix, and cost reductions anticipated to support profit expansion.

• Dividend forecast for FY2026 is ¥50 per share.

• Forecasts based on ¥153/USD exchange rate; uncertainty remains due to geopolitical risks and high raw material prices.