Okaya & Co. Lifts First-Half Net Profit 17.2% to ¥19,060 Million as Electronics and Machinery Offset a Weak Steel Market, and Raises Its Forecast

Sales up almost 10%, with the gross margin slightly thinner

Okaya & Co., Ltd. (NSE: 7485), the Nagoya-based trading company dealing in steel, electronics, non-ferrous metals, machinery, chemicals, construction materials and food, published consolidated results for the first half of FY2/2027, the period from March 1 to August 31, 2026, on September 30, 2026 under Japanese GAAP. Revenue rose 9.7% to ¥626,217 million, operating profit 10.2% to ¥23,490 million, ordinary profit 11.7% to ¥27,297 million and profit attributable to owners of the parent 17.2% to ¥19,060 million, or ¥495.31 per share against ¥422.63, both adjusted for the 2-for-1 stock split that took effect on June 1, 2026. Its shares are listed on the Premier market of the Nagoya Stock Exchange.

Cost of sales rose 10.2%, slightly faster than revenue, so gross profit grew only 5.2% to ¥55,038 million and the gross margin narrowed from 9.2% to 8.8%. What lifted operating profit was overhead discipline: selling, general and administrative expenses rose just 1.8% to ¥31,547 million. The segment note adds a further point: the four segments together earned ¥21,406 million, up 3.8%, and the rest of the operating-profit gain came from the reconciling item, mainly retirement-benefit-related income not allocated to segments, which rose to ¥2,084 million from ¥698 million. The company describes a world economy unsettled by geopolitical risk and swings in interest and exchange rates, and a Japanese economy in which consumer spending lacked strength but manufacturing output held firm.

Dividends and share sales lift the lower lines

Below the operating line, dividend income rose to ¥4,488 million from ¥4,007 million, lifting ordinary profit faster than operating profit. Extraordinary gains rose to ¥1,259 million from ¥228 million, chiefly a ¥1,088 million gain on the sale of investment securities, and pre-tax profit rose 15.8% to ¥28,528 million. Income taxes increased only modestly, to ¥7,979 million, while profit attributable to non-controlling interests doubled to ¥1,488 million. Comprehensive income, by contrast, fell 74.3% to ¥7,799 million, because the unrealised gain on securities held fell by ¥10,923 million as share prices declined, against a ¥13,814 million increase a year earlier.

Steel shrinks; the other three segments grow

Steel revenue fell 2.5% to ¥187,363 million and segment profit 18.8% to ¥5,331 million. Construction-related steel was weak, which the company attributes to demand falling as labour shortages and rising costs weigh on building and civil engineering; specialty steel for semiconductors and industrial machinery grew, and overseas sales to Asia rose while sales to Europe and the United States fell. Information & Electrical was the biggest grower, with revenue up 19.6% to ¥220,057 million on more automotive components and semiconductor-related electronics and, in non-ferrous metals, higher material prices plus automotive and environmentally friendly materials; its profit rose a more modest 2.4% to ¥7,449 million.

Industrial Materials revenue rose 11.2% to ¥172,669 million and profit 25.0% to ¥6,543 million, helped by mechatronics parts for automobiles and aircraft and by automotive chemicals. Living & Industry, which covers piping materials and food, grew revenue 17.9% to ¥46,126 million and profit 35.1% to ¥2,081 million on more piping materials and higher imports of livestock products.

Inventories up, securities down

Total assets rose ¥7,059 million to ¥1,008,223 million from February 28, 2026. Merchandise and finished goods grew to ¥126,809 million from ¥112,036 million and trade receivables also rose, while investment securities fell to ¥305,573 million from ¥321,926 million on lower share prices. Short-term borrowings rose to ¥142,914 million from ¥124,998 million. Net assets rose to ¥523,487 million and the equity ratio edged up from 49.6% to 49.7%.

Forecast and dividend raised

Because results are running above the plan it published on March 31, 2026, Okaya raised its full-year FY2/2027 forecast to revenue of ¥1,200,000 million (+3.8%), operating profit of ¥39,000 million (−3.6%), ordinary profit of ¥45,500 million (flat) and profit attributable to owners of the parent of ¥32,000 million (+4.9%), or ¥831.55 per share. The filing does not restate the previous forecast. The revised operating-profit figure still implies a second half well below the first, at ¥15,510 million. The company paid an interim dividend of ¥45.00 and now forecasts a year-end dividend of ¥45.00, for ¥90.00 for the year against a split-adjusted ¥80.50 for FY2/2026.

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.