Komatsu (6301): FY2025 Results Summary — Sales Edge Higher but Profit Declines on Tariff and Cost Pressures

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Komatsu Ltd. (6301) reported FY2025 (April 2025–March 2026) consolidated net sales of JPY4,132.8 billion, up 0.7% year on year, as higher selling prices offset lower sales volume. Operating income fell 13.7% to JPY567.3 billion (operating income ratio 13.7%, down 2.3 points), and net income attributable to Komatsu Ltd. declined 14.4% to JPY376.4 billion, mainly due to decreased sales volume, product mix, and higher production costs from tariffs in the core Construction, Mining & Utility Equipment segment. For FY2026, the company projects net sales of JPY4,118.0 billion (down 0.4%) and operating income of JPY508.0 billion (down 10.5%), reflecting the anticipated impact of the situation in the Middle East and expanded U.S. tariffs.

Consolidated Results (Full-Year Actual)

Segment profits for FY2025 totaled JPY571.2 billion, down 13.9% from JPY663.5 billion in FY2024. Income before income taxes decreased 11.2% to JPY537.3 billion. ROE was 11.3%, down 2.9 points from 14.2% in FY2024, while the Net D/E ratio was 0.26, up 0.02 points from 0.24. The cash dividend per share was maintained at 190 yen, and the consolidated payout ratio was 45.9%, versus 40.1% in FY2024.

Item	FY2025	FY2024	Change
Net sales (Billions of yen)	4,132.8	4,104.4	+0.7% (+28.4)
Segment profits (Billions of yen)	571.2	663.5	(13.9)% (92.4)
Operating income (Billions of yen)	567.3	657.1	(13.7)% (89.8)
Operating income ratio	13.7%	16.0%	(2.3) pts.
Income before income taxes (Billions of yen)	537.3	604.8	(11.2)% (67.6)
Net income attributable to Komatsu Ltd. (Billions of yen)	376.4	439.6	(14.4)% (63.2)
ROE	11.3%	14.2%	(2.9) pts.
Net D/E ratio	0.26	0.24	+0.02 pts.
Cash dividends per share	190 Yen	190 Yen	+/-0 Yen
Consolidated payout ratio	45.9%	40.1%	–

Segment Results

Construction, Mining & Utility Equipment sales increased 0.2% to JPY3,806.0 billion as improved selling prices outweighed lower sales volume, but segment profit fell 18.0% to JPY491.1 billion as decreased sales volume, product mix, and higher tariff-related production costs outweighed the benefit of higher prices; segment profit ratio was 12.9%, down 2.9 points. Retail Finance sales rose 2.4% to JPY126.1 billion and segment profit rose 24.4% to JPY36.6 billion, mainly due to an increase in outstanding receivables and lower funding costs. Industrial Machinery & Others sales rose 6.8% to JPY238.8 billion and segment profit rose 38.5% to JPY37.9 billion, driven by increased sales of large press equipment for the automotive industry and higher-margin excimer laser maintenance for the semiconductor industry.

Segment	Metric	FY2025	FY2024
Construction, Mining & Utility Equipment	Net sales (Billions of yen)	3,806.0	3,798.2
Construction, Mining & Utility Equipment	Segment profit (Billions of yen)	491.1	598.9
Construction, Mining & Utility Equipment	Segment profit ratio	12.9%	15.8%
Retail Finance	Net sales (Billions of yen)	126.1	123.2
Retail Finance	Segment profit (Billions of yen)	36.6	29.4
Retail Finance	Segment profit ratio	29.0%	23.9%
Industrial Machinery & Others	Net sales (Billions of yen)	238.8	223.6
Industrial Machinery & Others	Segment profit (Billions of yen)	37.9	27.4
Industrial Machinery & Others	Segment profit ratio	15.9%	12.3%

FY2026 Forecast

Komatsu projects FY2026 net sales of JPY4,118.0 billion, down 0.4% from FY2025, and operating income of JPY508.0 billion, down 10.5% (operating income ratio 12.3%, down 1.4 points). Net income attributable to Komatsu Ltd. is projected to decline 15.5% to JPY318.0 billion. The projection factors in an estimated JPY90.1 billion reduction in sales and a JPY18.8 billion increase in costs related to the situation in the Middle East, as well as a JPY37.8 billion increase in costs from U.S. tariffs (including the additional tariff under Section 122 and revised steel and aluminum tariffs), partly offset by a JPY30 billion refund related to IEEPA tariffs. By segment, Construction, Mining & Utility Equipment sales are projected to decrease 0.4% to JPY3,790.0 billion and segment profit to decrease 10.4% to JPY440.0 billion (profit ratio 11.6%, down 1.3 points), mainly due to lower sales volume from the situation in the Middle East and expanded tariff and production-cost impacts. Retail Finance sales are projected to increase 1.1% to JPY127.5 billion while segment profit is projected to decrease 1.6% to JPY36.0 billion due to higher costs. Industrial Machinery & Others sales are projected to increase 0.1% to JPY239.0 billion while segment profit is projected to decrease 2.5% to JPY37.0 billion, as increased semiconductor-related sales are offset by lower sales of large presses and automotive battery manufacturing equipment and rising procurement costs linked to the situation in the Middle East.

Item	Forecast	FY2025 (Actual)
Net sales (Billions of yen)	4,118.0	4,132.8
Segment profits (Billions of yen)	514.0	571.2
Operating income (Billions of yen)	508.0	567.3
Operating income ratio	12.3%	13.7%
Income before income taxes (Billions of yen)	466.0	537.3
Net income attributable to Komatsu Ltd. (Billions of yen)	318.0	376.4
ROE (excl. share buyback effects)	9.1%	11.3%
Cash dividends per share	190 Yen	190 Yen
Consolidated payout ratio (excl. share buyback effects)	53.8%	45.9%

Shareholder Returns

Komatsu maintained its cash dividend per share at 190 yen for FY2025 and forecasts an unchanged 190 yen per share for FY2026. The consolidated payout ratio was 45.9% for FY2025, above the company’s target of 40% or more (consolidated), and is projected at 53.8% for FY2026 (excluding share buyback effects). Under the Strategic Growth Plan, Komatsu conducted 100 billion yen of share buybacks in FY2025, with its policy being to conduct timely share buybacks based on an overall balance of financial soundness, the shareholders’ equity ratio, and other factors.

Item	FY2025	FY2026 Forecast
Cash dividend per share	190 Yen	190 Yen
Consolidated payout ratio	45.9%	53.8% (excl. share buyback effects)
Share buyback (FY2025 result)	100 billion yen	–

Medium-Term Plan / Topics

Progress toward the Strategic Growth Plan’s management targets was generally on track in FY2025: sales growth of +0.7% (target: growth rate above the industry average), operating profit ratio of 13.7% (target: top profit ratio in the industry), FCF of JPY263.2 billion (target: JPY1 trillion cumulative over 3 years, excluding M&A-related expenditures), ROE of 11.3% (target: 10% or higher), Retail Finance ROA of 2.4% (target: 1.5% to 2.0%), and Retail Finance Net D/E ratio of 4.45 times (target: 6 times or less). On non-financial KPIs, Komatsu reported a 48% reduction in CO2 from production and a 23% reduction in CO2 from product use (target: 50% reduction by FY2030 compared with FY2010), and a renewable energy use rate of 36% (target: 50% of total energy use by FY2030). Progress on the KPI for solving social issues was assessed as on track toward the goal. Key FY2025 initiatives included field testing of a diesel trolley power-agnostic truck at a copper mine in Sweden, a proof-of-concept test of a hydrogen fuel cell-powered hydraulic excavator, and collaboration with Applied Intuition on software-defined vehicle development and with TIER IV Inc. on autonomous construction equipment technology. Komatsu also acquired the remanufacturing business of SRC of Lexington, Inc. in the United States, acquired Malwa Forest AB (a Swedish forestry machinery manufacturer) through its subsidiary Komatsu Forest AB, and became the first OEM to commission 1,000 ultra-class autonomous haul trucks equipped with its Autonomous Haulage System.

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.