KITZ Corporation (6498): FY2025 Results Summary — Operating Profit Up 8.7%, Dividend Payout Ratio Policy Raised to at Least 40%

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

KITZ Corporation (6498) released its FY2025 Results Presentation in February 2026. Consolidated sales came to ¥176,682 million, up 2.7% year on year, and operating profit rose 8.7% to ¥15,454 million. Ordinary profit increased 5.2% to ¥16,071 million, while profit attributable to owners of the parent decreased 3.0% to ¥11,465 million, which the company attributes to the lack of gain on large-scale sales of investment securities from sales of shares held under a cross-shareholding arrangement as in FY2024. ROE was 10.1%.

Consolidated Results (Full-Year Actual)

Sales of ¥176,682 million were up 2.7% year on year but 1.8% below the company’s plan of ¥180,000 million. The Valve Manufacturing Business increased by 1.3% year on year on the back of higher sales in overseas markets and the effect of price revisions, despite a slower recovery than expected in demand for the Semiconductor Equipment market. The Brass Bar Manufacturing Business increased by 9.0% year on year, boosted by higher sales volume and other factors. Operating profit of ¥15,454 million exceeded the plan by 3.0%, with the operating profit margin improving from 8.3% to 8.7%.

Item (Millions of Yen)	FY2024 Results	FY2025 Plan	FY2025 Results	YoY Change
Sales	172,042	180,000	176,682	2.7%
Valve Manufacturing	139,556	147,300	141,415	1.3%
Brass Bar Manufacturing	29,838	30,000	32,514	9.0%
Operating Profit	14,220	15,000	15,454	8.7%
Ordinary Profit	15,276	15,600	16,071	5.2%
Profit Attributable to Owners of the Parent	11,824	11,200	11,465	(3.0)%

By profit factor, operating profit rose from ¥14,220 million to ¥15,454 million, with sales volume and product mix contributing +¥3,390 million and cost reduction +¥350 million in the Valve Manufacturing Business, partly offset by material cost (-310), parts and energy cost (-790), SG&A (-580) and forex (-590). Among major management indicators, the overseas sales ratio was 34.1% (41.8% in the Valve Manufacturing Business), the equity ratio rose to 64.1%, EPS was ¥131.85, and BPS increased to ¥1,358.57. Exchange rates for the year were ¥149.78 to the US dollar and ¥169.51 to the euro, with electrolytic copper at ¥1,536/kg.

Segment Results

In the Valve Manufacturing Business, sales rose 1.3% to ¥141,415 million and segment operating profit increased 8.4% to ¥18,886 million on increased revenue from higher sales volume in overseas markets. In the Brass Bar Manufacturing Business, sales rose 9.0% to ¥32,514 million while operating profit decreased 2.4% to ¥865 million, as the impact of increased repair costs for planned furnace maintenance in Q1 remained.

Segment	Metric (Millions of Yen)	FY2025 Results	FY2024 Results	YoY Change
Valve Manufacturing	Sales	141,415	139,556	1.3%
Valve Manufacturing	Operating Profit	18,886	17,419	8.4%
Brass Bar Manufacturing	Sales	32,514	29,838	9.0%
Brass Bar Manufacturing	Operating Profit	865	886	(2.4)%

By market within the Valve Manufacturing Business (in billions of yen), core markets totaled ¥84.1 billion, down 0.4% year on year: Building & Facilities rose 1.2% to ¥32.6 billion, performing steadily driven in part by price revisions and data center demand in North America, while Petrochemicals fell 3.1% to ¥30.6 billion due to the absence of large-scale projects in China and other regions. Growth markets totaled ¥34.0 billion, up 0.4%: Semiconductor Equipment slightly decreased 1.9% to ¥23.1 billion on a weaker recovery than expected, while Semiconductor Materials (Filters) rose 9.4% to ¥5.2 billion and Fine Chemicals rose 12.9% to ¥3.8 billion. By area, sales in Japan rose 2.4% to ¥82.4 billion while overseas sales were ¥59.0 billion, down 0.1%: the Americas increased 8.1% to ¥20.3 billion on strong sales of commodity valves centered around data centers, China decreased 16.6% to ¥11.9 billion amid the real estate recession, and India increased 47.4% to ¥2.4 billion, backed by strengthened sales activities by the local subsidiary established in 2024.

FY2026 Plan

For FY2026, KITZ plans sales of ¥195,000 million (up 10.4% year on year), operating profit of ¥17,000 million (up 10.0%), ordinary profit of ¥17,400 million (up 8.3%) and profit attributable to owners of the parent of ¥12,700 million (up 10.8%), with ROE of 10.4%. The company plans a 10.5% year-on-year increase in the Valve Manufacturing Business, driven by increased sales in the semiconductor equipment and data center markets, the effects of price revisions, and higher sales volumes in overseas markets, and a 10.7% increase in the Metal Solutions Business by incorporating new materials and expanding sales of high value-added products. The Brass Bar Manufacturing Business has been renamed the Metal Solutions Business. Assumptions are ¥155.00 to the US dollar, ¥184.00 to the euro, and electrolytic copper at ¥2,100/kg.

Item (Millions of Yen)	FY2026 Plan	FY2025 Results	YoY Change
Sales	195,000	176,682	10.4%
Operating Profit	17,000	15,454	10.0%
Ordinary Profit	17,400	16,071	8.3%
Profit Attributable to Owners of the Parent	12,700	11,465	10.8%
ROE	10.4%	10.1%	－
EPS (Yen)	146.02	131.85	10.7%

By segment, the FY2026 plan calls for Valve sales of ¥156,200 million and operating profit of ¥20,900 million, Metal Solutions sales of ¥36,000 million and operating profit of ¥1,000 million, and Other sales of ¥2,800 million. By market, the plan targets Semiconductor Equipment sales of ¥26.5 billion (up 14.9%) and Hydrogen & Clean Energy (incl. LNG) sales of ¥4.0 billion (up 111.9%), with core markets totaling ¥89.0 billion (up 5.9%) and growth markets ¥41.6 billion (up 22.3%).

Shareholder Returns

KITZ raised its ideal dividend payout ratio from approx. 35% to at least 40%, effective from FY2025, in light of its commitment to enhancing shareholder returns, changes in the business environment, and the impact on its optimal capital structure and ROE targets. As a result, the dividend per share for FY2025 is ¥53 (¥19⇒¥21 in Q2 and ¥27⇒¥32 in Q4), representing the highest level for five consecutive years; the FY2025 dividend payout ratio was 40.2%. For FY2026, the plan is increased to ¥59 per share (¥29 in Q2 and ¥30 in Q4). The company will also consider share buybacks depending on the investment environment and other conditions to achieve an optimal capital structure and target ROE.

Item	FY2024 (24/12)	FY2025 (25/12)	FY2026 Plan (26/12)
Annual Dividend per Share (Yen)	46	53	59

Medium-Term Plan / Topics

Under the 2nd Medium-term Plan “SHIN Global 2027,” the financial KPIs for FY2027 are sales of ¥200.0 billion, operating profit of ¥20.0 billion, ROE of at least 11%, and a dividend payout ratio of at least 40%. Against FY2025 targets of ¥180.0 billion in sales and ¥15.0 billion in operating profit, results were ¥176.7 billion and ¥15.4 billion. The company targets investments of ¥60.0 billion over the three years of the plan, comprising strategic investment of ¥26.0 billion (including business investment of ¥20.0 billion, IT/DX investment of ¥4.5 billion and green investment of ¥1.5 billion), M&A of ¥20.0 billion, and general investment of ¥14.0 billion. The organization was restructured into a Strategic Business Unit (SBU) system focusing on eight target markets.

Topics include an increase in domestic sales prices from March 2026: bronze and brass valves (for automatic valves, valve bodies only) under the KITZ/TOYO brands will be priced 15% or more higher from March 2, 2026, due to higher manufacturing costs from the continued rise in copper prices and other expenses since the price increase in June 2025. In addition, a new factory for high-purity gas valves for the semiconductor equipment market was completed at KITZ Corporation of Vietnam, with a completion ceremony held on January 26, 2026; the new factory increases production capacity for high-purity gas valves by approx. 30%. In the U.S. data center market, KITZ relocated and expanded KITZ Corp. of America’s facility in November 2025, doubling warehouse size to approx. 10,000 m2, and targets 5x year-on-year sales growth in 2026. In October 2025, the company announced the acquisition of Horizon Polymer Engineering Pvt. Ltd. (HPE), an Indian pipe and valve manufacturer for fine chemicals.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.