Johnson Electric (179) Q2 25/26 earnings summary

Executive summary

• Sales for the first half of FY25/26 declined 1% year-over-year to US$1,833.5 million, with net profit attributable to shareholders rising 3% to US$133.3 million, or 14.21 US cents per diluted share, despite challenging macroeconomic and trade conditions.

• Underlying/adjusted net profit, excluding unrealized FX and restructuring, decreased by 8% to US$123 million, mainly due to price adjustments and wage inflation, partially offset by cost reductions and FX gains.

• Free cash flow from operations increased to US$174.5 million, supported by working capital improvements.

• Interim dividend maintained at 17 HK cents per share (2.18 US cents), declared payable January 2026.

• Capital expenditure rose to US$131 million (7.1% of sales), focused on automation and new product launches.

Financial highlights

• Gross profit was US$441 million (24.0% margin), up from US$438 million (23.6%) year-over-year.

• Adjusted EBITA was US$159 million (8.7% margin), down from US$177 million (9.5%).

• Diluted EPS increased to 14.21 US cents from 13.92 US cents.

• Free cash flow from operations rose by US$30.1 million year-over-year.

• Net cash position increased to US$573 million, with cash reserves of US$932 million as of 30 September 2025.

Outlook and guidance

• Management is cautiously optimistic for modest sales improvement in the second half of the year, with medium- and long-term prospects seen as positive, assuming pragmatic US-China trade relations.

• Continued investment in automation and manufacturing footprint expansion is planned.