SHIMA SEIKI: FY2027 forecast cut to ¥4.8bn operating loss

For FY2027, SHIMA SEIKI now expects lower sales and has shifted its operating and net income forecasts from profits to losses. The previous forecast, revised forecast and prior-year results are shown below. Figures are ¥bn, except earnings per share, which is in yen.

Sales are ¥6.7 billion below the previous forecast, a 16.3% decline. While revenue is expected to exceed the prior-year result, the operating loss is set to widen, and ordinary and net income are both forecast to move from profit to loss. The outlook points to weaker earnings power despite higher sales.

SHIMA SEIKI cited intensifying competition in key markets and delays in introducing cost-performance shaping machines as the main reasons for the forecast cut. The company gave the following reasons:

• Selling prices: Price competition has intensified further, particularly in Asia, the company’s main market, keeping downward pressure on prices.
• Product launches: Launch delays persist for cost-performance shaping machines that had been scheduled for a full-scale rollout from the third quarter onward.
• Sales plan: The delayed introduction of new models is expected to leave sales short of plan.
• Factory utilization: Production adjustments in response to the sales shortfall are expected to lower factory utilization and reduce gross profit.

The pressure comes not only from lower-than-planned sales volumes, but also from falling selling prices and lower factory utilization as production is adjusted. SHIMA SEIKI cut its sales and operating income forecasts, with corresponding reductions to its forecasts for ordinary and net income attributable to owners of the parent.

The revised outlook calls for sales above the prior-year result, but an operating loss of ¥4.8 billion, wider than the ¥1.72 billion loss a year earlier. Ordinary income is forecast to swing from a ¥288 million profit to a ¥4.3 billion loss, while net income is expected to move from a ¥856 million profit to a ¥5.1 billion loss. Securing revenue and improving profitability have emerged as separate challenges.

Investors will be watching whether progress on machine launches can help restore the sales plan and improve factory utilization. SHIMA SEIKI said its forecast is based on information available at this time and assumptions it considers reasonable, and that actual results may differ due to future factors.