Ai Holdings FY6/2026 Revenue Up 28% on Nakayo Consolidation as Net Profit Halves Against a Prior-Year Bargain-Purchase Gain

Three profit lines up, the fourth down 44%

Ai Holdings Corporation (TSE: 3076), a Tokyo-based holding company spanning security equipment, card and office machinery, cutting machines, measuring instruments, telecom equipment and structural design services, reported consolidated results for the year ended June 30, 2026 under Japanese GAAP on August 19, 2026. Revenue rose 28.4% to ¥85,024 million from ¥66,197 million. Operating profit rose 21.1% to ¥10,762 million and ordinary profit 39.2% to ¥12,535 million — but net profit attributable to owners of the parent fell 43.7% to ¥11,937 million from ¥21,202 million. Earnings per share were ¥224.08 against ¥405.63.

The divergence is entirely below the ordinary line and entirely about the prior year, not this one. FY6/2025 carried ¥19,212 million of extraordinary income, of which ¥17,878 million was a bargain-purchase gain on negative goodwill — the accounting result of buying a business for less than the fair value of its net assets — plus ¥449 million from a step acquisition. Against that it carried ¥7,081 million of extraordinary losses, including a ¥5,164 million loss on a step acquisition and ¥848 million of business-restructuring costs. And its tax line was a net credit of ¥66 million, because a ¥4,095 million deferred-tax benefit exceeded the ¥4,028 million current charge. Pre-tax profit of ¥21,139 million therefore became ¥21,206 million of net profit.

FY6/2026 has none of that. Extraordinary income was ¥3,919 million, almost all of it a ¥3,836 million gain on the sale of fixed assets, against ¥303 million of extraordinary losses. Pre-tax profit was ¥16,150 million and the tax charge ¥4,190 million, an effective rate of 25.9%. In other words the underlying business earned more this year on every line down to ordinary profit; what fell away was a one-off accounting gain and a one-off tax credit.

Telecom consolidation drives the top line

Seven segments, and one of them accounts for most of the revenue growth. Information and communications more than doubled, to ¥27,102 million, up 129.2%, with segment profit of ¥1,249 million, up 84.3%, because Nakayo's telecom-equipment business became a consolidated subsidiary this year. That single addition is roughly ¥15 billion of the group's ¥18.8 billion revenue increase.

Security equipment, the profit engine, produced revenue of ¥15,890 million, up 4.5%, and segment profit of ¥6,187 million, up 0.6% — 58% of the group's total segment profit on 19% of its revenue. New condominium sales were strong and the unit won an order for a complete next-generation security system using AI image analysis for a government client. Design services was the standout on growth: revenue of ¥7,436 million, up 33.6%, and profit of ¥1,482 million, up 213.5%, on steady structural-design orders plus a large seismic-diagnosis contract.

The rest is mixed. Measuring equipment produced revenue of ¥5,442 million, up 8.8%, and profit of ¥786 million, down 4.8%. Information equipment — cutting machines — saw revenue fall 6.1% to ¥12,671 million while profit rose 21.6% to ¥562 million, as a low-priced new consumer model replaced a higher-priced one and commercial machines held steady. Card and other office equipment was the weak spot, with revenue down 21.0% to ¥2,454 million and profit down 62.7% to ¥310 million, caught mid-changeover on its main steel-frame CAD product even as hospital-facing card equipment recovered and a bank ordered instant cash-card issuance machines. Other produced revenue of ¥14,026 million, up 16.9%, and profit of ¥393 million, up 141.1%.

An asset sale funds the cash flow

Total assets ended the year at ¥145,674 million, up ¥4,846 million, with cash and deposits up ¥9,770 million and land down ¥2,221 million — the balance-sheet trace of the property sale. Liabilities fell ¥1,070 million to ¥27,769 million. Net assets rose ¥5,916 million to ¥117,904 million: ¥11,937 million of net profit in, ¥5,860 million of dividends out. The equity ratio rose to 80.8% from 77.7%, back toward the 81–85% range of 2022 to 2024.

Operating cash flow was ¥10,807 million against ¥7,647 million: ¥16,150 million of pre-tax profit and ¥2,676 million of depreciation, less the ¥3,836 million asset-sale gain (reversed here because it belongs in investing) and ¥2,718 million of income tax paid. Investing generated ¥5,915 million, on ¥6,348 million of proceeds from selling property, plant and equipment and ¥888 million of distributions from investment partnerships, against ¥1,516 million of capital expenditure. Financing used ¥7,976 million, mostly ¥5,831 million of dividends paid. Cash and equivalents closed at ¥54,577 million, up ¥9,786 million. Interest coverage was 624.1 times, against 189.4.

Guidance: flat revenue, lower profit — and a higher dividend

For FY6/2027 the company guides revenue of ¥86,000 million, up 1.1%; operating profit of ¥11,000 million, up 2.2%; ordinary profit of ¥11,700 million, down 6.7%; and net profit of ¥9,000 million, down 24.6%. The shape follows directly from this year's accounts: the operating business is guided marginally higher, while the ¥1,848 million of non-operating income booked this year — including ¥823 million of equity-method profit and a ¥574 million foreign-exchange gain — and the ¥3,836 million asset-sale gain are not assumed to repeat.

Management's stated priorities for the year are accelerating the growth of Aigreens, its decarbonisation subsidiary, at home and abroad, and speeding up the integration of Iwatsu Electric and Nakayo — the two acquisitions that built the telecom segment — to realise group synergies early.

The dividend rises regardless. FY6/2026 pays ¥125.00, an interim ¥55.00 already paid plus a ¥70.00 year-end to be put to the September 25 annual general meeting, against ¥110.00 a year earlier. For FY6/2027 the company plans ¥140.00, ¥70.00 at each half — a 12.0% increase declared alongside guidance for a 24.6% profit decline. The stated policy explains it: dividends are set at the greater of a 6% dividend on equity or a 50% payout ratio, so a rising equity base pushes the floor up even when earnings fall.

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.