Nojima Q1 Net Profit Doubles to ¥20.5 Billion on ¥14.6 Billion Securities Sale Gain as Operating Profit Falls 6%

Nojima Corporation (TSE: 7419), the Kanagawa-based operator of the Nojima consumer-electronics chain, the largest independent mobile-carrier shop network in Japan, the Nifty internet business and the VAIO PC brand, reported consolidated results for the first quarter of the fiscal year ending March 2027 — the three months from April 1 to June 30, 2026 — under Japanese GAAP. Net sales rose 6.1% to ¥242,078 million, a record for the period, while operating profit fell 6.2% to ¥13,782 million. Ordinary profit jumped 84.0% to ¥29,912 million and profit attributable to owners of the parent exactly doubled, up 100.0% to ¥20,515 million. EBITDA, which management treats as its primary performance indicator, rose 61.6% to ¥36,230 million. Basic earnings per share were ¥70.78 against ¥35.72 a year earlier; fully diluted EPS was ¥66.15 versus ¥33.43.

The ¥14.6 billion that sits between operating and ordinary profit

The defining feature of the quarter is the unusually wide gap between the two profit lines: ordinary profit came in at more than double operating profit and grew 84.0%, while operating profit itself declined. The entire gap is non-operating. Total non-operating income leapt to ¥16,747 million from ¥1,990 million a year earlier, and within it sits a single item — a gain on sale of investment securities of ¥14,627 million, against nil in the year-ago quarter. The remaining non-operating income was routine: interest received ¥32 million, dividends received ¥661 million, purchase discounts ¥898 million and other items ¥527 million. Non-operating expenses were ¥616 million, of which interest paid accounted for ¥464 million; the equity-method line was a loss of just ¥1 million, versus a ¥4 million loss a year earlier. In other words, equity-method affiliates contributed essentially nothing to the swing — the securities disposal did all of the work.

The company's own segment note confirms the point. Nojima discloses that the adjustment between reportable-segment profit and consolidated ordinary profit of +¥14,508 million "includes a gain on sale of investment securities of ¥14,627 million and unallocated corporate expenses of −¥119 million." A year earlier that adjustment line was a negative ¥39 million. The balance sheet tells the same story from the other side: investment securities fell ¥30,355 million during the quarter, from ¥38,304 million to ¥7,949 million — Nojima liquidated the great majority of its listed-securities holdings.

The transaction also flatters the reported EBITDA figure. Nojima defines its EBITDA on page 2 of the attachment as "ordinary profit + interest paid + bond interest + depreciation + goodwill amortisation − equity-method investment gain/loss," so because the metric is built off ordinary profit rather than operating profit, the securities gain flows straight into it. Depreciation for the quarter was ¥5,047 million (from ¥4,728 million) and goodwill amortisation ¥1,542 million (from ¥1,609 million); neither moved enough to explain a 61.6% rise. Management separately notes that ordinary profit and net profit would both be record highs for the period if the equity-method income from Suruga Bank and others recognised in FY3/2021 were excluded from the comparison.

Comprehensive income tells the other half of the story

Consolidated comprehensive income rose only 9.5% to ¥13,207 million — far short of the 100.0% jump in net profit, and in fact below net profit for the quarter of ¥20,744 million. The reconciliation is direct: other comprehensive income was a negative ¥7,536 million, driven by a ¥7,688 million decline in net unrealised gains on available-for-sale securities, partly offset by ¥146 million of foreign-currency translation adjustments and ¥6 million on deferred hedges. Selling the securities recycled their accumulated unrealised gains out of equity and into the income statement, so what appeared as a realised gain in profit was largely a transfer from reserves that had already been recognised in the balance sheet. A year earlier the same line was a positive ¥1,618 million, which is why comprehensive income of ¥12,065 million then was above net profit of ¥10,447 million.

Segments: home appliances strong, internet weak, overseas into loss

Nojima now presents its reportable segments in descending order of segment profit. Digital Home Electronics Retailing was the standout, with sales up 17.5% to ¥90,336 million on record demand for air conditioners, televisions and washing machines ahead of tighter energy-efficiency rules, though segment profit eased 2.3% to ¥6,117 million. Carrier Shop sales were broadly flat at ¥91,589 million (+0.6%) and profit fell 6.3% to ¥5,664 million as the surge tied to the end of 3G service unwound. The Product business, which houses VAIO, lifted sales 2.9% to ¥16,343 million and profit 25.3% to ¥1,523 million on the launch of its first Copilot+ PC models. Internet — Nifty and Cecile — grew sales 3.6% to ¥19,064 million but profit halved, down 45.5% to ¥993 million on higher related costs. Media sales fell 7.6% to ¥5,583 million while profit rose 87.8% to ¥493 million. Overseas raised sales 6.6% to a record ¥21,286 million but swung to an ordinary loss of ¥15 million from an ¥8 million profit, as Singapore lapped a government energy-efficiency replacement campaign and Malaysia absorbed a wider sales-and-service tax base. The store network ended the quarter at 1,300 outlets — 244 electronics stores, 944 carrier shops (661 directly operated, 283 franchised) and 112 overseas.

Guidance raised for both the first half and the full year

Nojima revised the forecasts it published with its FY3/2026 results on May 7, 2026. For the first half it now guides net sales of ¥490,000 million (+5.9%), operating profit of ¥28,000 million (+1.2%), ordinary profit of ¥44,000 million (+43.7%), EBITDA of ¥51,000 million (+19.8%) and net profit of ¥27,000 million (+39.0%), for EPS of ¥92.84. For the full year to March 2027 it guides net sales of ¥1,030,000 million (+4.8%) — crossing the ¥1 trillion mark — operating profit of ¥59,000 million (+1.6%), ordinary profit of ¥76,000 million (+22.0%), EBITDA of ¥97,000 million (+12.0%) and net profit of ¥48,000 million (+23.3%), for EPS of ¥165.05. The shape of the upgrade mirrors the quarter: the operating line is guided to grow only marginally, while ordinary and net profit carry the securities gain.

Dividend: read the split before comparing the numbers

Nojima executed a three-for-one split of its common stock effective October 11, 2025, and its dividend table has to be read with that in mind. For FY3/2026 the interim dividend is shown as ¥23.00, which is the actual amount paid before the split, while the year-end dividend of ¥10.00 is stated on a post-split basis. Because the two figures rest on different share bases, the company deliberately shows the FY3/2026 annual total as "—" rather than adding them together. A reader who simply compares ¥23.00 with ¥10.00 would conclude the payout was slashed; on a like-for-like post-split basis the interim was equivalent to roughly ¥7.67. For FY3/2027 the forecast is ¥10.00 at the interim and ¥10.00 at year-end for an annual ¥20.00, all post-split and unchanged from the previous forecast.

Balance sheet and cash flow

Total assets fell ¥5,342 million over the quarter to ¥589,135 million. Current assets dropped ¥16,161 million to ¥352,359 million as accounts receivable fell ¥26,716 million and cash and deposits fell ¥8,943 million to ¥87,357 million, partly offset by a ¥14,276 million build in merchandise and finished goods and ¥3,522 million more in raw materials and supplies. Non-current assets rose ¥10,818 million to ¥236,776 million: the ¥30,355 million reduction in investment securities was more than offset by a ¥24,298 million increase in buildings and structures and a ¥15,135 million increase in land. Total liabilities fell ¥16,406 million to ¥329,028 million, with notes and accounts payable down ¥11,940 million, income taxes payable down ¥6,560 million and long-term borrowings down ¥6,866 million, against an ¥8,980 million rise in short-term borrowings. Net assets rose ¥11,063 million to ¥260,107 million as a ¥17,596 million increase in retained earnings outweighed the ¥7,688 million fall in the securities valuation reserve, lifting the equity ratio 2.2 points to 43.0% and book value per share to ¥871.38 from ¥837.92. No quarterly cash flow statement was prepared. After the quarter closed, on July 21, 2026, the board approved a stock-option grant of 114,065 warrants (100 shares each) to be issued on August 4 and exercisable from July 22, 2029; the company intends to settle exercises entirely with treasury stock and expects no dilution.

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.