Shinsho Corporation (8075): FY2025 Results Summary — Profit Falls on Weaker Steel Demand, Record Dividend Planned for 80th Anniversary

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

Shinsho Corporation, a KOBELCO (Kobe Steel Group) trading company, reported consolidated net sales of ¥608.1 billion for the fiscal year ended March 31, 2026 (FY2025), down ¥9.0 billion year on year, as sales of steel sheets for the construction industry declined and steel prices fell. Ordinary profit was ¥11.0 billion, down ¥0.7 billion, while profit attributable to owners of parent decreased by only ¥0.3 billion to ¥8.3 billion, cushioned by gains on sales of strategically held shares. For FY2026, the company forecasts net sales of ¥686.0 billion, ordinary profit of ¥11.5 billion and net income of ¥9.0 billion, and plans an annual dividend of ¥130 per share, including a ¥26 commemorative dividend to mark its 80th anniversary.

Consolidated Results (Full-Year Actual)

Revenue declined due to a decrease in sales of steel sheets for the construction industry and a drop in steel prices. Ordinary profit amounted to ¥11.0 billion, while profit attributable to owners of parent decreased only ¥0.3 billion owing to gains on sales of strategically held shares. ROE and ROIC deteriorated due to lower profitability, while the equity ratio, an indicator of financial soundness, improved. The company decided on business investments in domestic aluminum resource recycling and production of biomass fuel as an alternative to coal. FY2025 dividends totaled ¥106 per share, comprising a ¥53 interim dividend and a ¥53 year-end dividend. Actual results for FY2025 came in below the company’s original forecast, which had been published at net sales of ¥637.0 billion and ordinary profit of ¥12.0 billion. Figures below are in billions of yen unless otherwise noted.

Item	FY2024 (Actual)	FY2025 (Actual)	Change	% Change
Net sales	617.2	608.1	(9.0)	(1.5%)
Gross profit	40.4	39.5	(0.9)	(2.3%)
SG&A expenses	27.2	27.9	+0.7	2.6%
Operating income	13.2	11.6	(1.6)	(12.5%)
Ordinary profit	11.8	11.0	(0.7)	(6.3%)
(Ordinary profit ratio)	1.9%	1.8%	(0.1%)	–
Net income attributable to owners of parent	8.6	8.3	(0.3)	(3.2%)
Net income per share (yen)	324.24 yen	313.65 yen	(10.6 yen)	(3.3%)

Capital investment remained robust in the domestic chemical, industrial machinery and carbon-neutral sectors, leading to increased machinery sales and maintenance services, but automobile production remained at the previous year’s level and sales of steel sheets for the construction sector declined; delays in the start of operations at domestic biomass power plants and Australian coal mines also weighed on results, while non-operating income improved due to a decrease in the allowance for doubtful accounts. Interest-bearing debt was reduced to ¥53.4 billion through the generation of free cash flow, and the D/E ratio improved to 0.5x (net D/E ratio: 0.36x). By building up equity and curbing the growth of total assets, the equity ratio improved to 25.8%.

Item	End of March 2025 (FY2024)	End of March 2026 (FY2025)	Change
Current assets	337.5	330.2	(7.3)
Fixed assets	49.3	53.4	+4.1
Tangible and intangible fixed assets	10.7	11.2	+0.5
Investments and other assets	38.7	42.2	+3.6
Total assets	386.9	383.6	(3.2)
Current liabilities	272.2	257.4	(14.8)
Fixed liabilities	21.7	25.3	+3.6
Total liabilities	293.9	282.6	(11.3)
Equity	91.4	99.0	7.5
Non-controlling interest	0.15	0.2	0.5
Net assets	93.0	101.0	8.0
External interest-bearing debt	61.3	53.4	(7.9)
Equity ratio	23.6%	25.8%	2.2%
D/E ratio	0.7 times	0.5 times	(0.1 times)
Net assets per share	3,461.4 yen	3,746.0 yen	–
Closing stock price	1,914 yen	2,292 yen	–
PBR	0.55 times	0.61 times	–

Segment Results

By business unit, in the Iron & Steel unit, profit declined on a non-consolidated basis due to a decrease in steel sales volume caused by sluggish demand in the building materials sector, compounded by falling steel prices; this was partly offset by an increase in dividends received from investee companies, while subsidiaries’ profit declined due to the reversal of negative goodwill at an equity-method affiliate in the prior year. In the Non-Ferrous unit, higher metal prices contributed to increased profit on a non-consolidated basis, but earnings declined due to a decrease in the volume of aluminum sheet sold to the automotive sector, and subsidiaries’ profit declined due to a decrease in semiconductor-related business. In the Ferrous & Recycling Materials unit, there was an impact from a decline in biomass fuel handling due to reduced operations at business partners, though profit was supported by a decrease in the allowance for doubtful accounts; subsidiaries’ profit declined due to delays in the start of operations at Australian coal mines and the absence of one-time gains recorded in the previous fiscal year. In the Machinery unit, sales of machinery such as heat pumps and non-standard compressors increased, and maintenance and service operations also performed well; the domestic subsidiary Matsubo Corp saw strong order intake, and profit in the construction machinery parts business in China increased. In the Welding unit, prices for welding materials rose, but sales volumes declined.

Business Unit	Metric	FY2025 (Actual)	FY2026 (Forecast)	Increase/Decrease	% Change
Iron & Steel	Ordinary profit (¥bn)	4.7	3.9	(0.8)	(17.7%)
Non-Ferrous	Ordinary profit (¥bn)	2.8	2.7	(0.1)	(4.8%)
Ferrous & Recycling Materials	Ordinary profit (¥bn)	(0.1)	0.9	+1.0	–
Metals Subtotal	Ordinary profit (¥bn)	7.5	7.5	(0.0)	(0.2%)
Machinery	Ordinary profit (¥bn)	3.1	3.1	+0.1	+1.8%
Welding	Ordinary profit (¥bn)	0.6	0.9	+0.3	+41.1%
Machinery & Welding Subtotal	Ordinary profit (¥bn)	3.7	4.0	+0.3	+8.6%
Other	Ordinary profit (¥bn)	(0.2)	0.0	+0.2	–
Total Amount	Ordinary profit (¥bn)	11.0	11.5	+0.5	+4.3%

FY2026 Forecast

Global production by Japanese automakers is expected to remain at the previous year’s level. Steel prices are expected to rise in the second half of the fiscal year, while aluminum and copper prices are expected to remain at high levels through FY2026. Demand related to semiconductor manufacturing equipment is also expected to recover, resulting in net sales of ¥686.0 billion, up ¥77.9 billion year on year. Ordinary profit is projected to increase by ¥0.5 billion to ¥11.5 billion, driven by strong demand for machinery and equipment related to carbon neutrality among other factors, while net income is expected to increase by ¥0.7 billion to ¥9.0 billion. The forecast assumes an exchange rate of ¥145 to the US dollar, with foreign exchange sensitivity of approximately ±¥40 million per ¥1 change in the exchange rate. Regarding the situation in the Middle East, the company states that while disruptions in crude oil and naphtha supply chains and rising ocean freight rates could potentially affect production and costs, it has not identified any events at this time that would have a material impact on its business performance.

Item	FY2025 (Actual)	FY2026 (Forecast)	Change
Net sales	608.1	686.0	+77.9 billion
Operating profit	11.6	12.1	+0.5 billion
Ordinary income	11.0	11.5	+0.5 billion
Net income attributable to owners of parent	8.3	9.0	+0.7 billion
ROE	8.7%	9.0%	+0.3%
ROIC	5.1%	5.9%	+0.8%
Capital adequacy ratio	25.8%	26.0%	+0.2%
Annual dividend per share	106 yen	130 yen	(+24 yen from the previous year)

Shareholder Returns

The company’s dividend policy is to pay the higher of either a consolidated dividend payout ratio of 30% or a dividend of ¥100 per share. To commemorate its 80th anniversary, the annual dividend for fiscal year 2026 will be ¥130, consisting of a regular dividend of ¥104 and a commemorative dividend of ¥26 (interim: ¥65; year-end: ¥65). For FY2025, the company paid a total annual dividend of ¥106 per share (¥53 interim, ¥53 year-end).

Item	FY2025 (Actual)	FY2026 (Forecast)
Interim dividend	53 yen	65 yen
Year-end dividend	53 yen	65 yen
of which commemorative dividend	–	26 yen
Annual dividend per share	106 yen	130 yen
Dividend payout ratio	33.8%	38.2%

Medium-Term Management Plan

Under its medium-term management plan, consolidated ordinary profit was ¥12.8 billion in FY2023 (first year), ¥11.8 billion in FY2024 (second year) and ¥11.0 billion in FY2025 (third year), against an initial FY2026 (final year) plan of ¥14.5 billion; the FY2026 forecast is ¥11.5 billion. The company attributes the variance from the FY2026 medium-term management plan primarily to the Iron & Steel and Ferrous & Recycling Materials units. In the Iron & Steel unit, profits declined primarily due to falling steel prices and decreased sales of steel sheets to Japanese automakers and the construction sector. In the Ferrous & Recycling Materials unit, profits declined due to the suspension of operations at a client’s biomass power plant and poor performance at an Australian coal mine. In the Machinery unit, profits increased as the growing focus on carbon neutrality led to an increase in the handling of decarbonization-related equipment, such as non-standard compressors and heat pumps.

Metric	FY2023 (Actual)	FY2024 (Actual)	FY2025 (Actual)	FY2026 (Initial Plan)	FY2026 (Forecast)
Consolidated ordinary profit (¥bn)	12.8(¥bn)	11.8(¥bn)	11.0(¥bn)	14.5(¥bn)	11.5(¥bn)
ROE	11.5%	9.7%	8.7%	10.0% or more	9.0%
ROIC	7.0%	6.1%	5.1%	6.5%	5.9%
Capital adequacy ratio	21.7%	23.6%	25.8%	21% or more	26.0%
External interest-bearing debt (¥bn)	60.6(¥bn)	61.3(¥bn)	53.4(¥bn)	(Optimize funding with a target D/E ratio of 0.7x or less)	(Optimize funding with a target D/E ratio of 0.7x or less)
D/E ratio	0.7 times	0.7 times	0.5times	0.7 times or less	0.7 times or less

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.