Makino FY26 Operating Profit Jumps 35% to ¥25bn on Record ¥270bn Order Intake; Dividend Lifted 50% to ¥270

Makino Milling Machine Co., Ltd. (TSE: 6135), one of Japan's flagship producers of CNC milling machines and high-precision machining centers for aerospace, die-and-mold, automotive and medical applications, released its FY3/2026 consolidated short report (Kessan Tanshin) under Japanese GAAP on April 30, 2026. For the year ended March 2026, revenue rose 11.5% year-on-year to a record ¥261,184 million, operating profit climbed 35.2% to ¥25,035 million, ordinary profit increased 35.9% to ¥27,299 million, and profit attributable to owners of the parent surged 45.6% to ¥20,992 million. Basic earnings per share advanced to ¥897.49 from ¥613.17. Comprehensive income more than tripled to ¥37,087 million (+241.7%) on the back of stronger net income and favorable foreign-currency translation movements.

Record ¥270 billion in orders led by China, Asia and the U.S.

The headline order-book figure is the most encouraging part of the disclosure. Orders received for the year rose 13.5% to a record ¥269,982 million, with momentum building through the second half. Demand was led by Greater China, where capex spending on EV components and precision tooling reaccelerated, supported by broader Asian markets (notably Southeast Asia and India) and a resilient United States order base across aerospace and die-and-mold customers. Management flagged that the gains were achieved against a backdrop of additional U.S. tariff measures and Middle East geopolitical disruption — both of which weighed on near-term confidence in some end-markets — but did not derail the underlying capex cycle in machine tools. Aerospace and EV-related tooling demand, in particular, continued to expand on multi-year programs that are insulated from short-term policy shocks.

Profit drivers: mix, gross margin recovery and cost discipline

Operating profit grew almost twice as fast as the top line — a 35.2% rise on 11.5% revenue growth — pointing to meaningful operating leverage. The improvement reflects (a) a richer product mix as higher-margin five-axis and high-speed milling centers grew faster than entry-level machines, (b) a gross-margin recovery as input-cost pressures from FY2025 eased and yen-denominated component costs were better absorbed, and (c) continued cost discipline at the SG&A line. Operating margin expanded to 9.6% from 7.9%, and the ordinary-profit margin reached 10.5%. Net margin moved up to 8.0% from 6.2%, the highest level in several years, lifting return on equity meaningfully and underpinning the dividend increase announced alongside the results.

Balance sheet and cash flow: cash up sharply, equity ratio at 61.7%

The balance sheet strengthened materially. Total assets rose to ¥423,026 million from ¥367,037 million, net assets climbed to ¥261,429 million, and the equity ratio improved to a robust 61.7%. Operating cash flow more than doubled to ¥33,227 million from ¥13,571 million, reflecting both higher earnings and tighter working-capital management as receivable and inventory cycles normalized. Investing cash flow was a net outflow of ¥16,152 million on continued capacity and digital-manufacturing investment, while financing activities used ¥9,178 million for dividend payments and debt servicing. Cash and equivalents at year-end stood at ¥75,151 million, leaving Makino with ample firepower to fund capex, R&D and shareholder returns.

Dividend lifted 50% to ¥270; FY27 guided to ¥340

Reflecting the step-change in profitability and the record order book, the board approved a sharp dividend hike. The FY3/2026 annual dividend was raised to ¥270 per share (¥90 interim + ¥180 year-end), up 50% from ¥180 in FY3/2025. For FY3/2027, management has guided to a further increase to ¥340 per share (¥160 interim + ¥180 year-end), a signal of confidence in the durability of the current earnings trajectory. The combined two-year increase nearly doubles the cash dividend versus FY3/2025, an unusually direct way for a mid-cap industrial to demonstrate balance-sheet and earnings confidence to international shareholders.

FY27 guidance: revenue ¥276bn, OP ¥27.6bn, net profit ¥22.1bn

For FY3/2027, Makino forecasts revenue of ¥276,000 million (+5.7%), operating profit of ¥27,600 million (+10.2%), ordinary profit of ¥28,400 million (+4.0%), and profit attributable to owners of ¥22,100 million (+5.3%), implying basic EPS of ¥944.78. The guidance assumes that the current order momentum carries into FY27 but does not embed an additional surge, reflecting management's awareness that U.S. tariff policy and Middle East geopolitics remain swing factors. With ¥75 billion of cash on hand, an equity ratio above 60%, a record order book and a clearly stepped-up dividend trajectory, the FY3/2027 plan looks like a baseline rather than a stretch — leaving room for upside if the China and U.S. order pace seen in late FY26 persists.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.