NICHIMO CO.,LTD. Q2 FY2026 earnings call

• Overall H1 Performance: The half-year achieved 67.022 billion yen in total revenue (up 8.8% YoY), 1.586 billion yen in operating profit (up 29.0% YoY), 1.803 billion yen in ordinary profit (up 25.5% YoY), and 1.327 billion yen in interim net profit (up 22.5% YoY), meeting initial planned targets. The diversified business model offset the profit volatility from the Food segment's raw material price swings.
• Business Model and Core Strengths: Nichimo positions itself as a platformer supporting the entire fishery supply chain from fishing shore to consumer table, covering 6 businesses (4 core plus bio and logistics). Its core strength is over 100 years of accumulated industry expertise in fisheries and aquaculture, enabling it to lead next-generation sustainable seafood initiatives.
• Mid-Term Management Plan (started April 2025) Priorities: 1. Core business strengthening: Focus on profitability over market share/size, serving as a solution partner for the fisheries supply chain. 2. Portfolio restructuring for more stable earnings: Reduce reliance on the volatile Food segment by prioritizing investment in three high-growth areas, and actively evaluate M&A opportunities aligned with strategic goals. The plan allocates 12 billion yen in total investment over the 3-year period, split equally between capital expenditure and M&A, with M&A focused on food and machinery-related targets.
• Progress on Priority Growth Areas: 1. Aquaculture (onshore and offshore): Stabilization of

All four core segments achieved revenue growth year-over-year, with three segments seeing profit growth: 1. Food Segment: Increased revenue, driven by strong growth in frozen fish sales to China, but reported a year-over-year profit decrease. Profit compression was caused by sluggish domestic mass retail sales due to price inflation, and reduced surimi output from poor fishing yields in South America, as well as high raw material market prices. No segment revenue contribution percentage was provided. 2. Marine Segment: Achieved both revenue and profit growth. Sales of aquaculture cages and feed remained stable; fishing gear sales grew due to abundant catches of some fish species; marine equipment sales also held steady, resulting in solid performance. No segment revenue contribution percentage was provided. 3. Machinery Segment: Achieved both revenue and profit growth. Domestic demand grew on the back of inbound tourism boosting capital expenditure for food service and commercial use; overseas expansion focused on tofu and prepared vegetable equipment across the US, Asia, and Europe, with yen depreciation further lifting overseas demand. The segment also won multiple vending machine renovation projects for domestic mass retailers. No segment revenue contribution percentage was provided. 4. Materials Segment: Achieved both revenue and profit growth. While some chemical products were impacted by US policy trends, printing film and packaging material sales remained solid; demand for agricultural materials adapted to climate change (such as heat mitigation) increased, driving overall growth. No segment revenue contribution percentage was provided.

• Full-year 2026 March fiscal year guidance is maintained at initial plan levels: total revenue of 135 billion yen (up 0.8% YoY), operating profit of 3.3 billion yen (up 9.9% YoY), ordinary profit of 3.5 billion yen, and net profit of 2.5 billion yen, which is on track to set new all-time records for both revenue and operating profit. Segment-level full-year guidance also sees no major changes from initial plans, with profit growth expected across all four core segments.
• Mid-term (3-year plan ending FY2029) KPIs are maintained: target revenue of 155 billion yen and operating profit of 4.3 billion yen by the final year of the mid-term plan, to build a base for long-term 10-year targets of 230 billion yen revenue and 7.7 billion yen operating profit.
• Dividend guidance is maintained: interim dividend is confirmed at 50 yen per share, full-year dividend is guided at 100 yen per share (50 yen per share end-of-year), with potential upside to the end-of-year dividend depending on Q3 year-end holiday sales results. The company maintains its commitment to a progressive dividend policy and a 35%+ payout ratio.

• External macro risks: Uncertainty from US trade policy and Middle East military conflict creates ongoing macroeconomic instability. Persistent price inflation has weakened consumer spending, which disproportionately impacts the consumer-focused Food segment.
• Operational risks: Persistent labor shortages continue to lengthen delivery lead times for the Machinery segment. The Food segment faces ongoing volatility from raw material price swings and supply disruptions (such as poor fishing yields affecting surimi supplies).
• Market risks: US policy changes create uncertainty for the Materials segment's chemical product line. Global geopolitical uncertainty adds unpredictability to overseas demand for the Machinery segment.

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