Tokai Rika (6995) Q4 2025 earnings summary

Executive summary

• FY2025 saw a 0.9% decrease in sales to ¥617.6bn, but operating profit reached a record high, rising 23% to ¥35.4bn, driven by a weak yen, cost improvements, and reduced quality costs.

• Profit attributable to owners increased 11.9% to ¥27.8bn, while ordinary profit declined 12.9% to ¥34.4bn.

• Comprehensive income dropped sharply to ¥5.9bn from ¥65.3bn the previous year.

• The company advanced initiatives in safety, carbon neutrality, and new business, including a new alcohol interlock system and expansion in India.

• Dividend policy was revised, targeting a DOE of 3% and a consolidated payout ratio of 30%.

Financial highlights

• FY2025 sales were ¥617.6bn, down 0.9% year-over-year; operating profit rose 23% to ¥35.4bn (5.7% margin).

• Ordinary profit fell 12.9% to ¥34.4bn; profit attributable to owners increased 11.9% to ¥27.8bn.

• Extraordinary gains included ¥5.4bn from investment securities sales and ¥0.7bn from fixed asset sales; impairment losses of ¥2.6bn were recorded.

• Gross profit decreased by ¥1.9bn to ¥89.7bn, while SG&A expenses fell by ¥8.5bn.

• Basic earnings per share rose to ¥328.34; annual dividend increased to ¥95 per share, up ¥20 from FY2024.

Outlook and guidance

• FY2026 sales are projected at ¥580.0bn (down 6.1% year-over-year); operating profit forecast at ¥20.0bn (3.4% margin), a 43.6% decrease.

• Ordinary profit forecast at ¥20.0bn (down 42.0%); profit attributable to owners expected to drop 49.7% to ¥14.0bn.

• Annual dividend for FY2026 is forecast at ¥95 per share.

• USD/JPY and EUR/JPY rates assumed at 135 and 155, respectively, for FY2026.