Shima Seiki Cuts Sales Forecast to ¥34,300 Million, Expects Full-Year Loss of ¥5,100 Million
Key Facts
Shima Seiki on October 30 reported results for the six months ended September 30, 2026, posting a net loss attributable to owners of the parent of ¥1,790 million, compared with a profit of ¥672 million in the year-earlier period. Net sales fell 17.5% to ¥14,918 million from ¥18,092 million. The company also swung to an operating loss of ¥2,185 million, compared with an operating loss of ¥79 million a year earlier. Ordinary loss totaled ¥1,942 million, versus ordinary profit of ¥780 million. The results cover the first half of the fiscal year ending in March 2027, not a single quarter as stated in the previous draft.
The swing to a loss was reflected in basic earnings per share, which showed a loss of ¥52.80 in the first half, compared with earnings of ¥19.70 in the same period a year earlier. The company also cut its forecast for the fiscal year ending March 31, 2027, lowering its sales estimate to ¥34,300 million from ¥41,000 million. It also changed its outlook from a previous net profit of ¥900 million to a net loss attributable to owners of the parent of ¥5,100 million. It forecast an operating loss of ¥4,800 million for the fiscal year. This puts projected annual sales and profitability below the company’s previous estimates.
Shima Seiki attributed the forecast cut to intensifying price competition, particularly in Asia, and continued pressure on selling prices. The company said delays in launching new knitting machines could prevent it from achieving its sales plan. The new models, designed to offer competitive performance and cost, were scheduled for a full launch starting in the third quarter of the fiscal year. With the launch delayed, the company expects sales below plan, along with lower factory utilization and gross profit. The company therefore linked its annual revision to pricing factors and product launch timing, rather than solely to first-half results.
The company expects annual sales of ¥34,300 million, up 2.4% year on year, despite forecasting an operating loss of ¥4,800 million and a net loss attributable to shareholders of ¥5,100 million. It also maintained its expected annual dividend at ¥20 per share, including ¥10 at the fiscal year-end. These figures outline an annual trajectory combining expected sales growth with continued losses, alongside announced cash distributions to shareholders. At the end of September, assets totaled ¥109,960 million, while the equity-to-asset ratio fell to 73.4% from 75.2% on March 31, 2026. The company operates in an industry affected by customer investment; in the fiscal year ended March 2025, it said an economic slowdown in China, Europe and other markets had weakened customers’ capital spending and the group’s sales.
Data for the fiscal year ended March 2025 show that flat knitting machine sales, the company’s core business, totaled ¥23,230 million, down 10.3% year on year, while sales of design systems fell 18.7% to ¥2,818 million. The company says sales outside Japan account for about 80% of its total, with exposure to markets including China, Bangladesh, ASEAN countries and Italy. Its design systems also cover apparel production stages from product planning to production management and sales promotion, and the company says virtual design simulation has reduced sample preparation time. Among upcoming dates, the company set November 13, 2026, for filing its semiannual securities report. Dividend payments are scheduled to begin on December 1, 2026.