Mani (7730) Q2 2025 earnings summary

Executive summary

• Net sales increased 6.5% year-over-year to ¥14,810 million, driven by strong performance in Surgical and Eyeless Needle segments, despite a voluntary recall of MANI DIA-BURS in China due to incomplete product registration, with no safety or efficacy issues identified and no impact on other regions.

• Operating income remained steady at ¥4,172 million, while net income declined 7.9% year-over-year to ¥2,940 million due to reduced foreign exchange gains and higher SG&A expenses.

• Recall affected about 50% of 400 items, requiring new regulatory applications and halting shipments in China; management is enacting structural and leadership changes to address the crisis.

• The Hanaoka Smart Factory was completed, with mass production of ophthalmic knives and NiTi rotary files scheduled to start in 2026.

Financial highlights

• Net sales: ¥14,810 million (+6.5% YoY); Operating income: ¥4,172 million (−0.6% YoY); Net income: ¥2,940 million (−7.9% YoY); gross profit margin improved, but SG&A expenses rose 18.3% year-over-year.

• Ordinary income declined 6.0% year-over-year to ¥4,277 million, mainly due to lower foreign exchange gains.

• Negative impact of JPY 800 million from the recall was offset by strong sales in Surgical and Eyeless Needle Segments.

• Cash and deposits decreased due to investments, while non-current assets increased with the completion of the Hanaoka Factory.

• Operating cash flow for H1 FY2025 was JPY 3 billion, down JPY 1 billion from H2 FY2024 due to consumption tax payments.

Outlook and guidance

• Full-year FY2025 forecasts remain unchanged: net sales ¥30,200 million, operating income ¥8,900 million, net income ¥6,350 million, with full-year recall impact expected to be JPY 1–1.5 billion.

• Sales in China for FY2025 are guided at JPY 8 billion; recovery in Dental segment sales in China expected in FY2027 after product re-certification and new product launches.

• No change in annual dividend of JPY 39 per share; interim dividend set at JPY 16 per share.