SMK Corporation (6798): FY2025 Results Summary — Return to Operating Profit on Structural Reform

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

SMK Corporation reported FY2025 net sales of 48,204 million yen, a slight increase of 0.3% year on year, and operating profit of 430 million yen (operating profit margin 0.9%), changing from an operating loss of 220 million yen in FY2024, benefiting from the reduction of fixed costs through the company’s structural reform program. Ordinary profit rose 126.3% year on year to 1,243 million yen, driven by real estate income and foreign exchange gains, and net profit remained in the black at 56 million yen. For FY2026 the company forecasts net sales of 49,000 million yen (+1.7%) and operating profit of 800 million yen (+86.0%). The materials are the company’s FY2025 Investor Briefing dated May 22, 2026; the presentation labels the fiscal year ended March 2026 as FY2025.

Consolidated Results (Full-Year Actual)

Although impairment losses and the reversal of deferred tax assets were recorded as extraordinary losses, net profit remained positive at 56 million yen, compared with a net loss of 1,884 million yen in FY2024. Earnings per share were 8.87 yen against negative 297.39 yen a year earlier. The main breakdown of extraordinary losses was structural reform cost of 869 million yen and impairment loss of 497 million yen in FY2024, and impairment loss of 314 million yen in FY2025. The average exchange rate was 150.66 yen to the U.S. dollar, versus 152.65 yen in FY2024.

Item (Million yen)	FY2024 Result	FY2025 Result	YoY
Net Sales	48,051	48,204	+0.3%
Operating Profit (Operating profit margin)	△220 (△0.5%)	430 (0.9%)	—
Ordinary Profit	549	1,243	+126.3%
Extraordinary Loss	1,520	391	△74.3%
Income Taxes	921	810	△12.0%
Net Profit	△1,884	56	—
Earnings Per Share (yen)	△297.39	8.87	—
Exchange Rate (1USD=)	152.65 yen	150.66 yen

Segment Results

In the CS Division (Connection System; various connectors), the automotive, home appliance, and industry markets performed well, and sales increased but profit decreased due to a sluggish ICT market; automotive battery and motorcycle-related businesses performed strongly, amusement and renewable energy-related segments expanded, while the smartphone-related business declined. In the SCI Division (Sensing, Communication & Interface; switches, in-vehicle cameras, wireless modules, remote controls, touch sensors), automotive and home appliance markets remained steady, with strong sales of automotive and e-bike units and sanitary remote controls, and the deficit narrowed due to reductions in fixed costs at domestic and European/American bases and the recovery of development expenses. The Innovation Center’s performance was sluggish due to the transfer of the communication module business (transferred to SCI starting in June) and delays in commercializing voice analysis and electromyography (EMG) sensors.

Segment (Million yen)	Metric	FY2024 Result	FY2025 Result	YoY Change	YoY %
CS Division	Net Sales	22,156	22,520	+363	+1.6%
CS Division	Operating profit	1,534	1,187	△346	△22.6%
SCI Division	Net Sales	25,643	25,621	△21	△0.1%
SCI Division	Operating profit	△1,308	△378	+930	—
Innovation Center	Net Sales	251	62	△189	△75.2%
Innovation Center	Operating Income	△446	△379	+67	—
Total	Net Sales	48,051	48,204	+153	+0.3%
Total	Operating Income	△220	430	+650	—

Sales by Market and Region

By application market, ICT sales fell below the previous year due to sluggish demand for smartphone-related connectors, while automotive sales exceeded the previous year on strong performance in connectors and units for vehicles and e-bikes. Home appliance sales grew on connectors for the amusement industry and expanding sanitary remote controls, although sales of remote controls and units for housing equipment were sluggish; Industry/Others grew on renewable energy-related connectors.

Market (Million yen)	FY2024 Result	FY2025 Result	YoY Change	YoY %
ICT	6,949	5,824	△1,124	△16.2%
Home Appliances	19,820	19,920	+99	+0.5%
Automotive	16,100	17,187	+1,087	+6.8%
Industry/Others	5,180	5,271	+91	+1.8%
Total	48,051	48,204	+153	+0.3%

By region (regional breakdown figures are based on internal management data), Japan sales rose 4.0% to 17,944 million yen on strong sales of sanitary remote controls and automotive and e-bike units. North America fell 11.7% to 9,688 million yen on weak performance in smart home appliance and housing equipment units. China grew 9.7% to 10,401 million yen on renewable energy-related and automotive battery connectors. Rest of Asia (incl. Taiwan) declined 1.5% to 8,130 million yen on lower smartphone connectors, and Europe declined 2.0% to 2,039 million yen on lower automotive and home appliance remote controls.

FY2026 Forecast

For FY2026, sales are projected to reach 49 billion yen, a 1.7% increase from the previous term. Operating profit is expected to rise from 430 million yen in the previous term to 800 million yen, driven by the effects of fixed-cost reductions from the structural reform program and increased sales. The company notes that, as it is difficult to predict the impact of the escalating tensions in the Middle East at this time, it has not been factored into the FY2026 earnings forecast. The assumed exchange rate is 155.00 yen to the U.S. dollar.

Item (Million yen)	FY2025 Results	FY2026 Forecast	YoY
Net Sales	48,204	49,000	+1.7%
Operating Profit (Operating Profit Margin)	430 (0.9%)	800 (1.6%)	+86.0%
Ordinary Profit	1,243	1,200	△3.5%
Net Profit	56	800	—
Net income per share (yen)	8.87	126.41	—
Dividend (yen)	100.00, 50/50 (Interim/Final)	100.00, 50/50 (Interim/Final)	—
Exchange Rate (1 USD =)	150.66 yen	155.00 yen

Shareholder Returns

The FY2025 dividend was 100.00 yen per share, split 50/50 between interim and final, and the FY2026 forecast is also 100.00 yen (50/50 interim/final). In FY2024 the company paid a 140 yen dividend, including a commemorative dividend. In FY2026, the company will continue to pay dividends targeting a dividend on equity (DOE) ratio of approximately 2%. Under the FY2024–FY2026 cash allocation, shareholder returns (dividend payments) are forecast to exceed the mid-term target at 2.2 billion yen versus the 2 billion yen target, driven by the dividend policy based on a 2% DOE ratio and including a 100th-anniversary commemorative dividend.

Medium-Term Plan / Topics

Under the medium-term business plan “SMK Next100,” FY2025 net sales were 48.2 billion yen against the mid-term target of 52 billion yen (△7.3%) and operating profit was 430 million yen against the 700 million yen target (△38.5%). For FY2026, due to changes in major customer trends resulting from market conditions such as reduced demand and project delays, both sales and profit are expected to fall short of the medium-term targets: net sales of 49 billion yen versus the 60 billion yen target (△18.3%) and operating profit of 800 million yen versus the 2.10 billion yen target (△61.9%). ROE is forecast at 2.6% for FY2026 against the 5.0% mid-term target, after 0.2% in FY2025.

On structural reform, 118 employees took voluntary retirement (CS: 23, SCI: 38, Innovation Center: 17, Administrative Division: 40), with cost savings from workforce reduction of 490 million yen in FY2025 and 700 million yen per year from FY2026 onward. The company closed the Ibaraki Sales Office, the Detroit Office and the UK South Office and reorganized administrative departments; cost savings from staff reductions and expense cuts at European and U.S. locations were 180 million yen in FY2025 and are expected at 200 million yen per year from FY2026 onward. Through these measures, fixed costs were reduced by 220 million yen in the first half and 450 million yen in the second half of FY2025. As a topic, the company opened an India Representative Office in Gurugram on February 13, 2026, promoting marketing activities with a focus on connectors for the mobility sector.

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.