Kaneko Seeds Q1 Net Profit Jumps 77.5% to ¥535 Million on a Securities Gain as Greenhouse Materials Sales Climb 12%

A one-off gain does most of the work

Kaneko Seeds Co., Ltd. (TSE: 1376), the Gunma-based breeder and distributor of vegetable seeds, agrochemicals and greenhouse materials, reported consolidated results for the first quarter of FY5/2027, the three months from June 1 to August 31, 2026, on October 5, 2026 under Japanese GAAP. Net sales rose 1.0% to ¥15,695 million, gross profit 2.9% to ¥2,505 million and operating profit 6.5% to ¥412 million. Ordinary profit grew faster, 12.1% to ¥493 million, helped by dividend income and a smaller foreign-exchange item.

The bottom line was driven by an extraordinary gain of ¥330 million on the sale of investment securities, which had no counterpart a year earlier. Pre-tax profit rose 81.2% to ¥796 million and profit attributable to owners of the parent 77.5% to ¥535 million, or ¥48.83 per share against ¥27.08. Comprehensive income rose 48.8% to ¥866 million as unrealised gains on the remaining securities portfolio also grew.

Greenhouse materials lead, agrochemicals slip

Facility materials, which sells greenhouse film and structures, was the standout: sales rose 12.4% to ¥3,615 million as farmers stocked up on supplies amid uncertainty in the Middle East, and segment profit more than doubled, up 113.1% to ¥108 million, as price increases were passed through. The seeds business grew sales 2.4% to ¥2,355 million and profit 4.5% to ¥271 million: exports and domestic sales of green-onion seed and exports of cabbage seed were strong, while onion-seed exports fell because of a change in delivery schedules.

Agricultural materials, the largest segment, saw sales fall 3.2% to ¥8,293 million and profit 3.6% to ¥435 million. Long spells of rain in eastern Japan reduced opportunities to spray herbicides, and some demand had been pulled into the previous year by concern over Middle East supply. The flowers business slipped 1.4% to ¥1,431 million; demand for flower and vegetable seedlings recovered but unsettled weather cut sales of garden agrochemicals, and the segment loss widened to ¥75 million from ¥68 million.

A seasonal balance sheet

Total assets fell 6.6% to ¥50,586 million from May 31, mainly because trade receivables were collected, while liabilities fell ¥4,057 million as accounts payable were paid down. The company notes that this pattern repeats every year, since its busiest season is the fourth quarter. Net assets rose 1.7% to ¥27,202 million on retained earnings and higher valuation gains on securities, and the equity ratio rose to 53.8% from 49.4%.

Guidance and dividend unchanged

Kaneko Seeds kept the FY5/2027 forecast it published on July 13, 2026: net sales of ¥70,000 million (+3.3%), operating profit of ¥2,000 million (+14.3%), ordinary profit of ¥2,100 million (+13.7%) and net profit of ¥1,650 million (+24.5%), or ¥150.46 per share. First-quarter operating profit equals about 21% of the annual target, in line with a business whose profit is concentrated in the spring planting season. The annual dividend is held at ¥48.00, but its split changes: an interim payment of ¥20.00 and a year-end payment of ¥28.00, against ¥11.00 and ¥37.00 a year earlier.

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.