Nakanishi (7716) Q2 2025 earnings summary

Executive summary

• Net sales rose 1.6% year-over-year to ¥39,189 million, with strong 26% growth in the Surgical segment offsetting flat or declining sales in other segments and currency headwinds.

• EBITDA declined 6.0% year-over-year to ¥10,390 million, and operating profit fell 8.4% to ¥7,587 million, reflecting higher costs and weaker performance in key segments.

• Net income attributable to owners dropped 50.0% year-over-year to ¥3,510 million, mainly due to lower ordinary income and adverse foreign exchange effects.

• Comprehensive income plunged 98.0% year-over-year to ¥304 million, mainly due to significant negative foreign currency translation adjustments.

• U.S. tariffs are expected to impact results from Q3, but strong first-half performance is anticipated to offset these effects.

Financial highlights

• FY2025 Q2 net sales: ¥39,189M (+1.6% YoY); gross profit: ¥23,104M (+1.1% YoY); EBITDA: ¥10,390M (-6.0% YoY); operating profit: ¥7,587M (-8.4% YoY).

• Profit attributable to owners: ¥3,510M (-50.0% YoY); EPS: ¥41.84 (down from ¥82.88 a year earlier).

• Ordinary income decreased 34.1% YoY to ¥6,930M, with a notable drop in non-operating income, especially foreign exchange gains.

• Cash flows from operating activities: +¥7,578M; investing: -¥6,440M; financing: -¥2,559M.

• Return on equity: 5.9% (down 1.4pt YoY); return on assets: 8.9% (down 2.7pt YoY).

Outlook and guidance

• Full-year forecasts remain unchanged despite tariff and currency uncertainties.

• FY2025 forecast: net sales ¥80,655M (+4.7% YoY), EBITDA ¥18,932M (-7.5% YoY), profit attributable to owners ¥8,372M (-2.4% YoY), EPS ¥99.14.

• Tariff impact for FY2025 estimated at ¥1–1.5B, mitigated by price adjustments and cost reductions.

• Dividend forecast for FY2025 raised to ¥54 per share (from ¥52 in FY2024); total payout ratio forecast: 54.7%.