ARE Holdings (5857) Q4 2026 earnings summary

Executive summary

• Achieved record-high operating profit for FY2026.3, with revenue of ¥570.0 billion and operating profit of ¥37.1 billion, both up significantly year-over-year.

• Precious Metals Recycling and North American Refining businesses were primary growth drivers, with strong profitability and improved margins.

• Environmental Preservation segment maintained stable profit contribution, with equity-method investments at similar levels year-over-year.

• Revised upward the medium- to long-term plan, targeting ¥750.0 billion revenue and ¥50.0 billion operating profit by FY2031.3.

Financial highlights

• Revenue increased by ¥63.8 billion year-over-year, driven by higher gold and palladium prices and improved collection volumes.

• Operating profit rose by ¥17.1 billion year-over-year, with Precious Metals Recycling up ¥5.6 billion and North American Refining up ¥9.9 billion.

• Gross profit increased to ¥44,822 million from ¥28,943 million year-over-year.

• Comprehensive income surged to ¥80,352 million from ¥6,636 million, driven by large gains in cash flow hedges and foreign currency translation.

• Cash flow from operating activities was negative due to increased inventories and receivables, offset by strong financing activities.

Outlook and guidance

• FY2027.3 plan projects revenue of ¥680.0 billion and operating profit of ¥41.0 billion, with continued growth in Precious Metals Recycling.

• Medium- to long-term targets for FY2031.3 are revenue of ¥750.0 billion, operating profit of ¥50.0 billion, and ROE of 13%.

• Dividend payout ratio targeted at 40%, with FY2027.3 dividend planned at ¥135 per share.