Mitsubishi Electric reported record first-half sales of ¥3.13tn for the year ending March 2027, up ¥392.6bn from a year earlier, and adjusted operating profit of ¥344.7bn, against ¥204.5bn. The adjusted margin rose to 11.0% from 7.5%, and profit attributable to owners of the parent reached ¥297.0bn, from ¥189.3bn. The company says both sales and adjusted operating profit are first-half records. Adjusted operating profit strips out gains and losses on business and asset sales, impairment losses and similar "other" items from operating profit.
The July-September quarter was stronger still: sales of ¥1.63tn, adjusted operating profit of ¥202.6bn and a 12.4% margin, against 7.8% a year before.
A higher guide, with one line going the other way
Full-year sales are now forecast at ¥6.55tn, ¥280bn above the forecast of July 31. Adjusted operating profit is forecast at ¥710bn, up ¥90bn from that forecast, for a margin of 10.8%. The company ties the upgrade to higher sales in factory automation, air conditioning and home appliances, and infrastructure, and to better profitability in semiconductors and devices.
| Item | Prior year | July 31 forecast | New forecast |
|---|---|---|---|
| Sales | ¥5.89tn | ¥6.27tn | ¥6.55tn |
| Adjusted operating profit | ¥501.2bn | ¥620.0bn | ¥710.0bn |
| Pretax profit | ¥526.0bn | ¥670.0bn | ¥695.0bn |
| Net profit | ¥407.7bn | ¥495.0bn | ¥465.0bn |
Net profit is the exception. Pretax profit was raised by ¥25bn, but profit attributable to owners of the parent was cut by ¥30bn to ¥465bn. The presentation gives no reason for that cut.
Where the demand came from
Factory automation led the gains. Sales rose to ¥482.3bn and adjusted operating profit to ¥82.2bn, a 17.1% margin. The company cites AI and semiconductor-related capital spending in Japan, China and South Korea, with machine-tool demand also up. Orders in the segment rose 42% year on year in the first quarter of the current fiscal year and 54% in the second.
In semiconductors and devices, the company points to AI data-centre build-outs lifting demand for optical communication devices and industrial power chips. Segment profit was ¥32.9bn at a 20.6% margin, and orders rose 53% and 79% in the first and second quarters.
Air conditioning and home appliances reported sales of ¥939.8bn and profit of ¥108.9bn. Mitsubishi Electric cites demand ahead of Japan's revised energy-saving standards and a hot European summer, plus price improvement, partly offset by higher material costs. Defence and space reported profit of ¥20.2bn, with the company citing higher government budgets.
Currency helped. The dollar averaged ¥160 in the half, against ¥146 a year earlier. Of the ¥140.2bn rise in adjusted operating profit, ¥41.0bn came from exchange rates and ¥99.2bn from scale and other factors. The guide assumes ¥155 to the dollar from the third quarter, up from ¥150 in the July forecast.
Not every unit shared in the gains. Digital innovation swung to a ¥0.3bn adjusted operating loss, which the company attributes to amortization after buying a US operational-technology security company. Social systems profit fell to ¥14.2bn from ¥18.1bn, which the company ties to one-off income a year earlier.
Capital return
Mitsubishi Electric has decided on a share buyback of up to ¥200bn. Together with annual dividends, it implies a total payout ratio of 69%. The interim dividend is ¥30 a share, up ¥5 from last year's interim, and the year-end dividend is forecast at ¥30. The buyback is a ceiling, not completed purchases, and the presentation gives no repurchase period. Cash and equivalents stood at ¥956.4bn at the half-year end, and free cash flow for the half was ¥363.3bn.