Sanken Electric Co (6707) Q1 2027 earnings summary

Executive summary

• Net sales for Q1 FY March 2027 were ¥18.7bn, down 16.0% year-over-year and 11.2% quarter-over-quarter, reflecting declines in the white goods market and lower sales volumes amid challenging global economic conditions and production adjustments.

• Operating loss for Q1 was ¥2.1bn, with a net loss attributable to owners of parent at ¥1.9bn; basic EPS was negative at (¥93.34).

• Market conditions remain challenging due to elevated material and energy prices, a slowdown in China, and persistent localization trends.

• Automotive market sales were flat, while white goods and industrial machinery segments saw significant declines, especially in China.

Financial highlights

• Net sales decreased by ¥3.6bn year-over-year and ¥2.3bn quarter-over-quarter.

• Operating loss widened to ¥2.1bn, compared to a loss of ¥0.8bn in the previous quarter.

• Gross profit dropped to ¥1,126 million from ¥2,884 million year-over-year.

• Ordinary loss was ¥1.8bn, with extraordinary income of ¥0.2bn.

• FX impact: Yen depreciation provided a positive effect on sales and operating profit.

Outlook and guidance

• Full-year net sales forecast is ¥86.5bn, with H1 guidance at ¥39.3bn.

• Profit attributable to owners of parent projected at ¥1,000 million for the full year.

• A loss is expected for the first half of the fiscal year due to ongoing production adjustments, but cost reduction measures are taking effect.

• No revisions to previously announced financial forecasts.

• Assumed exchange rate for FY3/2027 is ¥155/USD, with each ¥1 fluctuation impacting net sales by ¥0.3bn and operating profit by ¥0.15bn.