NGK Insulators: FY2027 net profit forecast raised to ¥100bn

NGK Insulators raised its consolidated forecast for the year ending March 2027, with all major items from revenue to net profit now expected to exceed its previous estimates.

The revised forecasts are 8.5% higher for revenue, 21.5% for operating profit, 20.0% for ordinary profit and 22.0% for net profit compared with the previous estimates. The company also expects each measure to increase from the prior year: revenue from ¥670.1 billion, operating profit from ¥95 billion, ordinary profit from ¥95.2 billion and net profit from ¥59.9 billion. Forecast earnings per share rose to ¥354.02 from ¥290.67.

First-half results came in at ¥371.306 billion in revenue, ¥69.889 billion in operating profit, ¥70.395 billion in ordinary profit and ¥60.8 billion in net profit, all above the previous forecasts of ¥350 billion, ¥53 billion, ¥53 billion and ¥45 billion, respectively. Each measure also increased from the first half of the previous year.

• Digital Society business: Demand for AI-related semiconductors rose sharply, boosting demand for products used in semiconductor manufacturing equipment and for HICERAM carriers.
• Energy & Industry business: Investment in data centers drove expansion of US transmission and substation infrastructure, lifting demand for insulator products.
• Environment business: Automotive sales varied by region, but demand for automotive-related products remained firm.
• Foreign exchange: Yen depreciation helped lift first-half results.

Semiconductor and power grid demand drove growth, with broader demand across several businesses contributing to the results beating forecasts. First-half earnings per share were ¥214.66, above the previous forecast of ¥159.03 and the year-earlier result of ¥81.58.

NGK Insulators set its interim dividend at ¥63 per share and raised its year-end dividend forecast to ¥63. The annual dividend forecast is now ¥126, up from the previous forecast of ¥106 and above the previous year's ¥80.

The board approved the interim dividend, which is payable from Dec. 2, 2026. The year-end dividend remains a forecast and is ¥10 per share higher than the amount announced in April.

NGK Insulators said its medium-term targets are a consolidated dividend payout ratio of at least 35% and a dividend on equity of about 3.5%. It determines dividends based on factors including earnings and cash flow. The forecast upgrade is also reflected in shareholder returns.

NGK Insulators expects strong demand for products used in semiconductor manufacturing equipment to continue in the second half, while saying automotive-related products are facing weakness, particularly in China. Its second-half forecast assumes an exchange rate of ¥150 to the US dollar and ¥175 to the euro.

The full-year forecast upgrade also reflects the weaker yen in the first half. Future results may depend on whether semiconductor-related demand continues and on foreign exchange movements. The company cautioned that actual results may differ significantly from its forecasts due to various factors.