Tokyo Keiki (7721): FY2025 Results Summary — Record Operating Profit for a Second Straight Year on Defense Demand

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

TOKYO KEIKI INC. reported higher net sales and record operating profit for the fiscal year ended March 31, 2026 (FY2025), driven by strong growth in the Defense & Communications Equipment Business and higher revenue across the Marine Systems and other segments. Operating profit reached an all-time high for the second consecutive year, and order backlog at fiscal year-end also hit a record high. Based on this performance, the company raised its FY2026 operating profit forecast within its Medium-term Business Plan and now targets a third consecutive record-high operating profit.

Consolidated Results (FY2025 Actual)

Net sales and profit at every level increased year on year and exceeded the company’s previous forecast (issued February 6, 2026) on all metrics. Figures below are in millions of yen unless noted.

Item	FY2025	FY2024	Change
Net sales	¥61,186 million	¥57,650 million	+¥3,536 million (+6.1%)
Operating profit	¥5,362 million	¥4,856 million	+¥506 million (+10.4%)
Ordinary profit	¥5,492 million	¥5,001 million	+¥492 million (+9.8%)
Profit attributable to owners of parent	¥4,005 million	¥3,797 million	+¥208 million (+5.5%)
Operating profit margin	8.8%	8.4%	+0.3pt
Exchange rate (JPY/USD)	150.57	152.64	–

Net sales rose on strong growth in the Defense & Communications Equipment Business and higher revenue across all other segments, including Marine Systems. Higher profit in the Defense & Communications Equipment Business contributed to increases in all profit items. Orders received for FY2025 totaled ¥64,653 million, down ¥4,699 million (-6.8%) year on year, mainly reflecting the absence of large-scale Defense Business development orders. Order backlog at fiscal year-end nonetheless reached a record high of ¥59,875 million, up ¥3,467 million (+6.1%) year on year.

Segment Results

All segments except Others posted higher net sales, and the Defense & Communications Equipment Business drove the increase in consolidated operating profit.

Segment	Metric	FY2025	FY2024
Marine Systems	Net sales	¥13,675 million	¥12,529 million
Marine Systems	Operating profit	¥1,317 million	¥1,551 million
Hydraulics and Pneumatics	Net sales	¥11,836 million	¥11,460 million
Hydraulics and Pneumatics	Operating profit	¥222 million	¥197 million
Fluid Measurement Equipment	Net sales	¥5,410 million	¥5,019 million
Fluid Measurement Equipment	Operating profit	¥873 million	¥789 million
Defense & Communications Equipment	Net sales	¥26,015 million	¥24,394 million
Defense & Communications Equipment	Operating profit	¥2,344 million	¥1,635 million
Others	Net sales	¥4,249 million	¥4,247 million
Others	Operating profit	¥684 million	¥756 million
Total	Net sales	¥61,186 million	¥57,650 million
Total	Operating profit	¥5,362 million	¥4,856 million

Marine Systems net sales increased ¥1,146 million (+9.1%) on steady demand for new shipbuilding equipment overseas, particularly in China, and continued strong maintenance service demand, but operating profit fell ¥234 million (-15.1%) due to higher R&D and other costs. Defense & Communications Equipment operating profit rose ¥708 million (+43.3%) on higher net sales, improved selling prices, and a better cost of sales ratio from product mix changes, including strong sales of avionics equipment, shipboard equipment, space-related equipment, and satellite communications antenna stabilizers.

FY2026 Forecast

TOKYO KEIKI forecasts record-high net sales and a third consecutive record-high operating profit for FY2026, anticipating a significant increase in sales and profit in the Defense & Communications Equipment Business, including the Defense Business.

Item	FY2026 Forecast	FY2025 (Actual)	Change
Net sales	¥68,300 million	¥61,186 million	+¥7,114 million (+11.6%)
Operating profit	¥6,400 million	¥5,362 million	+¥1,038 million (+19.4%)
Ordinary profit	¥6,510 million	¥5,492 million	+¥1,018 million (+18.5%)
Profit attributable to owners of parent	¥5,000 million	¥4,005 million	+¥995 million (+24.8%)
Operating profit margin	9.4%	8.8%	+0.6pt

The forecast assumes an exchange rate of ¥151.00 per US dollar, versus ¥150.57 per US dollar in FY2025. On a Q1–Q4 basis, a ¥1 depreciation of the yen is estimated to raise operating profit by ¥20 million. The company also flagged the situation in the Middle East and U.S. tariff policy as external risks, noting delivery delays and procurement disruptions from the former and reduced industrial machinery capital expenditure, particularly in the automotive industry, linked to the latter; both risks are excluded from the forecast assumptions where noted as such in the materials.

Segment	Metric	FY2026 Forecast	FY2025 (Actual)
Marine Systems	Net sales	¥14,800 million	¥13,675 million
Marine Systems	Operating profit	¥1,370 million	¥1,317 million
Hydraulics and Pneumatics	Net sales	¥12,200 million	¥11,836 million
Hydraulics and Pneumatics	Operating profit	¥280 million	¥222 million
Fluid Measurement Equipment	Net sales	¥5,500 million	¥5,410 million
Fluid Measurement Equipment	Operating profit	¥880 million	¥873 million
Defense & Communications Equipment	Net sales	¥31,100 million	¥26,015 million
Defense & Communications Equipment	Operating profit	¥3,500 million	¥2,344 million
Others	Net sales	¥4,700 million	¥4,249 million
Others	Operating profit	¥510 million	¥684 million
Total	Net sales	¥68,300 million	¥61,186 million
Total	Operating profit	¥6,400 million	¥5,362 million

Shareholder Returns

TOKYO KEIKI plans an annual dividend of ¥40.00 per share for FY2025 and forecasts ¥48.00 per share for FY2026, continuing what the company describes as a policy of maintaining progressive dividends. The company states it aims for stable and consistent shareholder returns while balancing investment for growth (including R&D, hydrogen business investment, and strategic investment such as M&A), investment in its core business (including equipment replacement, DX infrastructure, and its head office relocation), and working capital needs of about ¥31.1 billion.

Fiscal Year	Annual Dividend (Yen per share)
FY2021	25.00
FY2022	30.00
FY2023	32.50
FY2024	35.00
FY2025 (Plan)	40.00
FY2026 (Forecast)	48.00

Fiscal Year	Payout Ratio (%)	DOE (%)
FY2021	32.9	1.6
FY2022	56.4	1.6
FY2023	23.4	1.6
FY2024	15.1	1.6
FY2025	16.4	1.7

Topics

A demonstration vessel equipped with TOKYO KEIKI’s vessel control functions, the newly built coastal container ship “GENBU,” obtained autonomous vessel certification from Japan’s Ministry of Land, Infrastructure, Transport and Tourism and achieved Level 4 autonomous operation under commercial service, as part of the Nippon Foundation’s “MEGURI2040” Fully Autonomous Ship Project, in which the company has participated since 2020. The company also increased its capital investment in Logic and Design Inc. through third-party allocation, aiming to develop AI camera-based detection and identification technologies to counter threats from unmanned aerial vehicles in its Defense Business, combining Logic and Design’s image distillation and advanced resolution restoration technology with TOKYO KEIKI’s camera technology. In the Railway Business, TOKYO KEIKI RAIL TECHNO INC. products have won new orders and sales overseas, including from the Manila North-South Commuter Railway, National High Speed Rail Corporation Limited (India), and Korea Railroad Corporation, part of the company’s long-term vision “TOKYO KEIKI Vision 2030,” which identifies the Railway Business as a growth driver.

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.