Nabtesco (6268) Q2 2025 earnings summary

Executive summary

• First half FY2025 sales rose 8.6% year-over-year to JPY 165.6 billion, with operating profit up 65% to JPY 10.6 billion, driven by strong demand in key segments and successful profitability initiatives under Project 10.

• Upward revision of full-year guidance: sales now expected at JPY 344 billion (+2.4%), operating profit at JPY 22.3 billion (+19.3%), and net profit at JPY 14.6 billion, reflecting strong H1 results and limited U.S. tariff impact.

• Announced split and sale of 70% of the hydraulic equipment business to Comer Industries, to be treated as a discontinued operation from Q3 FY2025.

• Share buyback of up to JPY 10 billion (up to 4 million shares) to be completed and cancelled within FY2025, enhancing shareholder value.

• Project 10 cost reduction and profitability improvement initiatives are exceeding expectations.

Financial highlights

• H1 FY2025 sales: JPY 165.6 billion (+8.6% YoY); operating profit: JPY 10.6 billion (+65% YoY); net profit attributable to owners: JPY 6.5 billion (+54.9% YoY); basic EPS: JPY 54.20.

• Gross profit improved to JPY 45.78 billion; free cash flow turned positive at JPY 10.07 billion.

• Dividend per share maintained at JPY 80; payout ratio to decrease to 65.3%.

• Cash and cash equivalents increased to JPY 87.17 billion as of June 30, 2025.

• Equity ratio stable at about 60%.

Outlook and guidance

• Full-year sales forecast revised up to JPY 344 billion (+2.4%), operating profit to JPY 22.3 billion (+19.3%), and net profit to JPY 14.6 billion (+11.5%).

• Basic EPS guidance increased to JPY 122.43 for FY2025.

• Operating profit margin expected to improve from 5.6% to 6.5%; excluding hydraulic business, OP margin would be 6.9%.

• Project 10 targets an operating profit margin of 10% by FY2026.

• Forecast excludes impact of the planned hydraulic equipment business split; adjusted figures provided for continuing operations.