Espec Corp. lowers profit outlook but announces share buyback plan

Espec Corp. has revised its consolidated full-year financial forecasts for the fiscal year ending March 31, 2026. While orders received are exceeding plans, with a revised forecast of 69,000 million yen (up from 66,000 million yen), operating profit is now projected at 7,600 million yen, down from 8,500 million yen, a 10.6% decrease. Ordinary profit is expected to be 7,750 million yen (previously 8,650 million yen), and profit attributable to owners of parent is 5,800 million yen (previously 6,190 million yen), representing a 6.3% decline. This revision is attributed to worsening profitability in the service business due to slowing EV demand and heightened competition in China. The dividend forecast remains unchanged.

Concurrently, Espec Corp. announced a resolution to acquire up to 900,000 of its own common shares, representing 4.05% of outstanding shares (excluding treasury shares), for a total cost of up to 3.5 billion yen. The acquisition period is set from November 14, 2025, to July 31, 2026, through purchases on the Tokyo Stock Exchange. This initiative is part of the company's commitment to shareholder returns, aiming for a consolidated dividend payout ratio of 40% or more and a total return ratio of 50% or more cumulatively over the medium-term management plan (FY 2025 to FY 2027). The company intends to retain a maximum of approximately 10% of issued shares, canceling any excess.

For the six months ended September 30, 2025, Espec reported net sales of 30,322 million yen, a 0.5% decrease year-on-year. Operating profit for the period was 2,607 million yen, down 20.9%, and profit attributable to owners of parent was 1,912 million yen, a 22.0% decrease. Orders received for the period increased by 5.5% to 38,636 million yen, driven by strong performance in North America and Southeast Asia, but net sales were slightly down due to long lead times on many orders.