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Presentation materials on financial results6390KATO WORKS CO.,LTD.Machinery

Financial Results Presentation for the Fiscal Year Ending March 2026

In the fiscal year ending March 2026, revenue increased due in part to the recovery in domestic sales, while operating income and ordinary income turned negative as inventory adjustments reduced factory utilization and materials and logistics costs increased. Net income was positive, boosted by an extraordinary gain on the transfer of equity in a Chinese subsidiary, but fell short of the previous forecast.

Worth reading
72In focus
Scored from 5 of 6 sections
Direction
Mixed performance
Direction inferred from the company’s description.
Scale
-3224
¥ millions (year-on-year change in operating income)
Wording
Avoiding a definitive answer
How definitive the wording is.

Contents of this document

Presentation materials on financial resultsFiscal year ending March 2026 (April-March)9 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥56,335 million+6.4%
Operating profit¥-2,320 million
Ordinary income¥-1,841 million
Net income¥4,526 million net income attributable to owners of the parent
Selling, general and administrative expenses¥8,145 million
Gross Profit Margin
Rate10.3%
Year-on-year change (points)-5.9
Operating profit margin
Rate-4.1%
Year-on-year change (points)-5.8
Results for the three months of the current quarterQuarterly trends in revenue and operating income are shown graphically (unit: ¥ million).
Full-year earnings forecast
Fiscal year ending March 2027
Net Sales
¥61,000 million
Operating profit
¥600 million
Ordinary income
¥120 million
Net income for the current fiscal year
¥0 million
Annual Dividend
¥70 per share
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
Revenue was broadly in line with the previously announced forecast, while operating income, ordinary income and net income attributable to owners of the parent fell short of the previously announced forecast.
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
  • Volume¥-629 million
  • Selling prices, costs, product mix and other¥-801 million
  • Aftermarket parts¥-121 million
  • Foreign exchange¥82 million
  • Selling, general and administrative expenses¥-449 million
  • Flexible sales initiatives¥-737 million
  • Valuation loss on replacement-parts inventories¥-567 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
Geopolitical risks remain unresolved, and the business environment is expected to remain uncertain. A sharp increase in demand for construction machinery is not assumed. The outlook is based on demand recovery for new hydraulic excavators in Japan, the India business and the U.S. market, while the numerical assumptions are not disclosed.
New initiatives
  • A joint venture, ACE KATO Pvt. Ltd., was established with ACE, a local Indian company, and production of mobile cranes is scheduled to begin in the first half of the fiscal year ending March 2027.
  • Sales of 4 new hydraulic excavator models are scheduled to begin in July 2026.
  • Reorganization of the European operations is being advanced.
  • The company has begun strengthening its sales network in North, Central and South America.
Segment results
  • Japan
    Net Sales¥51,899 million (YoY +11.2%)
    Operating profit¥-2,231 million
  • Europe
    Net Sales¥4,378 million (YoY -8.5%)
    Operating profit¥-239 million
  • Other
    Net Sales¥1,130 million (YoY -58.7%)
    Operating profit¥57 million
Medium-term management plan targets
The materials state that profit and loss for the fiscal year ending March 2027 is expected to fall short of the level envisioned in the medium-term management plan. The target figures and target year figures are not disclosed.
Financial targets
Actual results of ROE of 10.4%, ROIC of -3.3%, WACC of 2.9% and cost of shareholders' equity of 7.9% are provided. Target figures are not disclosed.
Capital expenditures
¥931 million acquisition of property, plant and equipment
Annual Dividend
¥70 per share
Interim35
End of period35
Contents of this document
ItemDetails
Document typePresentation materials on financial results
Fiscal Period CoveredFiscal year ending March 2026 (April-March)
Net Sales¥56,335 million (YoY +6.4%)
Operating profit¥-2,320 million
Ordinary income¥-1,841 million
Net income¥4,526 million (net income attributable to owners of the parent)
Gross Profit MarginRate 10.3% / Year-on-year change (points) -5.9
Operating profit marginRate -4.1% / Year-on-year change (points) -5.8
Selling, general and administrative expenses¥8,145 million
Results for the three months of the current quarterQuarterly trends in revenue and operating income are shown graphically (unit: ¥ million).
Full-year earnings forecastFiscal year ending March 2027 Net Sales ¥61,000 million / Operating profit ¥600 million / Ordinary income ¥120 million / Net income for the current fiscal year ¥0 million / Annual Dividend ¥70 per share
Self-assessment against the planRevenue was broadly in line with the previously announced forecast, while operating income, ordinary income and net income attributable to owners of the parent fell short of the previously announced forecast.
Segment resultsSegment Japan / Net Sales ¥51,899 million (YoY +11.2%) / Operating profit ¥-2,231 million, Segment Europe / Net Sales ¥4,378 million (YoY -8.5%) / Operating profit ¥-239 million, Segment Other / Net Sales ¥1,130 million (YoY -58.7%) / Operating profit ¥57 million
Breakdown of Factors Affecting the ChangeFactors Volume / Amount ¥-629 million, Factors Selling prices, costs, product mix and other / Amount ¥-801 million, Factors Aftermarket parts / Amount ¥-121 million, Factors Foreign exchange / Amount ¥82 million, Factors Selling, general and administrative expenses / Amount ¥-449 million, Factors Flexible sales initiatives / Amount ¥-737 million, Factors Valuation loss on replacement-parts inventories / Amount ¥-567 million
Assumptions Underlying the Business OutlookGeopolitical risks remain unresolved, and the business environment is expected to remain uncertain. A sharp increase in demand for construction machinery is not assumed. The outlook is based on demand recovery for new hydraulic excavators in Japan, the India business and the U.S. market, while the numerical assumptions are not disclosed.
Medium-term management plan targetsThe materials state that profit and loss for the fiscal year ending March 2027 is expected to fall short of the level envisioned in the medium-term management plan. The target figures and target year figures are not disclosed.
Financial targetsActual results of ROE of 10.4%, ROIC of -3.3%, WACC of 2.9% and cost of shareholders' equity of 7.9% are provided. Target figures are not disclosed.
Annual Dividend¥70 per share
Capital expenditures¥931 million (acquisition of property, plant and equipment)
New initiativesA joint venture, ACE KATO Pvt. Ltd., was established with ACE, a local Indian company, and production of mobile cranes is scheduled to begin in the first half of the fiscal year ending March 2027., Sales of 4 new hydraulic excavator models are scheduled to begin in July 2026., Reorganization of the European operations is being advanced., The company has begun strengthening its sales network in North, Central and South America.
Items this document does not state (11)
Progress against full-year forecastKey KPIsUnit price and quantity metricsNumber of stores and locationsNumber of employeesRisk amount incorporated into the outlookPayout ratioAcquisition of treasury sharesOrders received and order backlogMarket Size / ShareKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

Operating income was weighed down by lower factory utilization resulting from inventory adjustments, deterioration in the manufacturing cost ratio due to higher materials prices and logistics costs, a one-off valuation loss on long-term inventories of replacement parts and other items, and various expenses related to the development of new models. Revenue increased due to the resumption of sales of large rough-terrain cranes in Japan and flexible sales initiatives for hydraulic excavators, while net income was boosted by an extraordinary gain on the transfer of equity in a Chinese subsidiary.

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Financial Results Presentation for the Fiscal Year Ending March 2026 | KATO WORKS CO.,LTD. (6390) timely disclosure | Komori