ASHIMORI INDUSTRY CO.,LTD. Q2 FY2026 earnings call

• Company Overview

  • Founded in 1878, originally a rope manufacturer, diversified by combining core textile-derived technologies: weaving/assembling, resin coating processing, winding/fixing, and expansion. Currently focuses on the "safety and renewal" sector, providing products that "protect life and livelihood", with headquarters in Settsu City, Osaka, approximately 2,400 employees, and listed on the Tokyo Stock Exchange Standard Market. It celebrated its 147th founding anniversary on November 7, 2025, with stated capital of 8.388 billion yen.
  • Core business is structured around two main segments: Automotive Safety Components Business and Functional Products Business, with the latter split into Partem pipeline rehabilitation, disaster prevention, and industrial materials sub-segments.

• Consolidated Interim Performance

  • Consolidated net sales for the 2026 March fiscal year interim period totaled 33.741 billion yen, a 0.781 billion yen decrease YoY. Operating profit totaled 1.201 billion yen, a 0.925 billion yen decrease YoY. Ordinary profit totaled 1.4 billion yen, a 0.347 billion yen decrease YoY. Net income attributable to parent company shareholders totaled 0.804 billion yen, a 0.529 billion yen increase YoY, as the prior year period recorded an extraordinary loss of 1.12 billion yen for product warranty losses.

• Drivers of Operating Profit Change

  • YoY profit decrease stemmed from lower sales volume, rising raw material prices, new TOB-related expenses, increased R&D costs, and the reversal of prior yen depreciation (yen appreciation), partially offset by management efforts to raise selling prices and improve production efficiency.

• Balance Sheet and Cash Flow

  • Interest-bearing debt increased by 2.791 billion yen compared to the end of the prior fiscal year, driven by active capital investment. Other liabilities decreased by 2.84 billion yen due to lower trade payables and unpaid corporate taxes. Cash flow from operating activities deteriorated YoY due to increases in inventory. Cash flow from investing activities also deteriorated YoY due to higher capital expenditure. Cash flow from financing activities improved YoY due to increased interest-bearing debt.

• TOB Update

  • The tender offer for Ashimori Industry shares launched by Toyota Gosei on August 12, 2025 closed and was completed on October 30, 2025. Ashimori became a subsidiary of Toyota Gosei effective November 6, 2025. Toyota Gosei plans to acquire all outstanding Ashimori shares, and Ashimori will be delisted from the Tokyo Stock Exchange following required regulatory procedures.

1. Automotive Safety Components Business: Accounts for 73% of total consolidated revenue. Net sales in the interim period reached 25.026 billion yen, a 0.687 billion yen decrease year-over-year (YoY). Operating profit reached 0.989 billion yen, an 0.809 billion yen decrease YoY. 2. Functional Products Business: Accounts for the remaining 27% of total consolidated revenue. Net sales reached 8.699 billion yen, a 0.093 billion yen decrease YoY. Operating profit reached 0.569 billion yen, a 0.065 billion yen decrease YoY. The business is split into three sub-segments: - Partem (Pipeline Rehabilitation): Net sales of 4.756 billion yen, a 0.048 billion yen decrease YoY; operating profit of 0.633 billion yen, a 0.05 billion yen increase YoY. - Disaster Prevention: Net sales of 0.683 billion yen, a 0.022 billion yen increase YoY; operating loss of 0.117 billion yen, a 0.045 billion yen decrease in profit YoY. - Industrial Materials: Net sales of 3.26 billion yen, a 0.068 billion yen decrease YoY; operating profit of 0.053 billion yen, a 0.07 billion yen decrease YoY.

• No changes are made to the full-year 2026 March fiscal year forecasts for net sales, operating profit, and ordinary profit, which remain in line with the original guidance.
• The forecast for net income, which was downgraded in the first quarter earnings release following the booking of an extraordinary loss, remains unchanged with no further adjustments.

• Lower sales volume and rising raw material prices have pressured profitability.
• Yen appreciation has negatively impacted the Automotive Safety Components Business's revenue and profit.
• Soft order intake at the start of the period hurt Partem pipeline revenue, while weak carryover and new project volume for drainage hoses hurt disaster prevention segment profitability.
• The absence of large-scale civil engineering project deliveries (that occurred in the prior year period) weighed on industrial materials segment performance.
• TOB-related incremental costs have pulled down overall consolidated operating profit.

No question and answer section was included in the provided earnings call transcript.