Cosel Swings to FY26 Operating Loss as Revenue Falls 7%; ¥3.4 Billion Net Loss on Tax Charge

Cosel Co., Ltd. (TSE: 6905), the Toyama-based maker of switching power supplies and noise-filter components, reported consolidated full-year results for the fiscal year ended May 20, 2026 (FY5/2026) under Japanese GAAP. Revenue fell 7.4% year-on-year to ¥25,046 million, extending a downturn that had already cut the top line by 34.7% the previous year. The group swung to an operating loss of ¥695 million, reversing a ¥628 million operating profit, as soft demand and lower factory utilization pressured margins. Ordinary profit held positive but slid 63.9% to ¥267 million, helped by non-operating income that offset the operating shortfall.

Tax charge drives a deep net loss

The headline result was a net loss attributable to owners of the parent of ¥3,406 million, sharply wider than the prior year's ¥113 million loss and far below the modest ordinary-profit line. The gap between the small ordinary profit and the large bottom-line loss reflects income-tax expense — including deferred-tax adjustments — that weighed heavily on a year of marginal pre-tax earnings. Basic EPS came in at -¥82.81, against -¥2.84 a year earlier. Comprehensive income was a loss of ¥1,410 million, versus a ¥817 million loss in FY5/2025.

Revenue still soft after a steep prior-year fall

FY5/2026 marks a second consecutive year of declining sales for Cosel, whose products serve factory automation, semiconductor-production equipment, medical devices and other industrial end-markets sensitive to the capital-investment cycle. After revenue plunged 34.7% in FY5/2025, the further 7.4% decline this year left the top line at ¥25.05 billion. The operating margin turned negative at -2.8%, down from a thin 2.3% a year earlier, underscoring how operating deleverage on lower volumes erased the company's slim profitability.

Balance sheet stays robust and cash-rich

Despite the loss, Cosel's balance sheet remained exceptionally strong. Total assets edged up to ¥60,576 million from ¥59,998 million, while net assets stood at ¥55,836 million. Equity capital of ¥52,163 million left the equity ratio at a very high 86.1%, with net assets per share of ¥1,268.13. The company carries no meaningful leverage, giving it ample financial cushion to absorb a down year and continue funding dividends and research while end-demand recovers.

Operating cash flow stays positive

Cash generation held up better than the income statement. Operating activities produced ¥3,035 million of cash, investing activities used ¥1,409 million, and financing activities used ¥2,396 million — largely dividend payments. Period-end cash and cash equivalents stood at ¥26,865 million, slightly above the prior year's ¥26,552 million, leaving Cosel with a cash pile worth nearly half its total assets.

Dividend trimmed; FY27 guidance points to recovery

Cosel set its FY5/2026 annual dividend at ¥55.00 per share (¥27.00 interim + ¥28.00 year-end), down from ¥60.00 the prior year. For FY5/2027 the company guides to a ¥60.00 annual dividend, implying a payout ratio of 153.9% on forecast earnings — a signal of its commitment to shareholder returns through the trough. Management expects a return to growth and profit: FY5/2027 revenue is guided to ¥28,875 million (+15.3%), with operating profit of ¥1,335 million, ordinary profit of ¥1,539 million (+475.9%), net profit attributable to owners of ¥1,604 million and EPS of ¥38.99.

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.