Key Positives From The Results
Revenue of JPY 209.7B (+6.6% YoY) and operating income of JPY 18.8B (+83.5% YoY) marked all-time highs on both the top and bottom lines. The Metals segment (mining) benefited from higher copper prices (425→491¢/lb) and lower production costs, while the Real Estate business was boosted by sales of properties held for sale. ROE improved to 9.4% (+3.0pt) and ROIC to 6.7% (+2.4pt), reflecting better capital efficiency, with PBR reaching 1.24x—exceeding 1.0x for the first time.
- Metals Segment Operating Income: JPY 6.7B (+JPY 5.7B YoY, +613.3%). Copper price appreciation combined with a JPY 1.2B reduction in depreciation due to extended useful life from increased mineable reserves at the Atacama mine
- Gross Profit Margin: 20.9% (+3.5pt YoY). Revenue growth (+JPY 13.0B) outpaced the increase in COGS (+JPY 3.3B), driving meaningful profitability improvement
- Real Estate Segment Operating Income: JPY 3.3B (+JPY 1.6B YoY, +97.7%). Sales of properties held for sale delivered a segment margin of 69.8%
- Upside Versus February Guidance: Operating income beat by +JPY 2.3B and net income by +JPY 3.5B. Deferral of exploration expenses (+JPY 1.1B) and stronger by-product revenues in the Metals segment were the key contributors
- Dividends: JPY 71.4 per share (+JPY 26.6 YoY), payout ratio of 40.0%. Total shareholder return ratio at 40.0%
Key Concerns From The Results
For FY26, the company guides for operating income of JPY 14.0B (−25.6%), recurring profit of JPY 11.5B (−43.1%), and net income of JPY 12.0B (−14.5%). Front-loaded costs at the Arqueros mine, the absence of real estate disposal gains, and higher exploration expenses are expected to weigh on earnings.
- Operating Cash Flow: JPY 7.5B (−JPY 10.1B YoY, −57.2%). A JPY 16.1B increase in inventories and a JPY 6.7B rise in trade receivables—primarily in the smelting business—pressured working capital
- Equity Ratio: 50.7% (−8.2pt). Interest-bearing debt surged on JPY 44.7B in long-term borrowings (+JPY 34.9B YoY) to fund Arqueros mine development
- Non-Operating Risk In FY26 Recurring Profit Guidance Of JPY 11.5B: Litigation-related expenses (JPY 390M in the current period) and other non-operating cost volatility remain
- Arqueros Mine Capex Overrun: Development costs revised up to USD 486M from the original USD 396M (+23%), with the production start date pushed back from April 2026 to Q3 2026 (Jul–Sep)
- Mineral Resources Segment Volume Decline: Limestone sales volume of 22,118kt (−290kt YoY). Continued declines in steel and aggregate end-markets raise questions about whether price revisions can offset the trend
- Aging-Related Cost Inflation At The Atacama Mine
- Strategic Shareholding Disposals: Sale proceeds are compressing the magnitude of the earnings decline
Focus Areas / Items To Monitor Going Forward
- Ramp-up speed at the Arqueros mine (production start targeted for Jul–Sep 2026) and feasibility of achieving a C3 cost of 318¢/lb. Whether copper output can more than double on a full-contribution basis in FY27 (Atacama 11kt + Arqueros 15kt) will determine the medium-term earnings trajectory
- Progress on strategic shareholding reduction (JPY 10B+ over FY25–27) and share buybacks (up to JPY 10B in FY26). The remaining portfolio stood at JPY 42.9B (market value) at FY25-end—still elevated relative to net assets—making the target of below 20% by FY27 a key lever for capital efficiency improvement
- Disclosure of optimal capital structure and ROE targets in the 4th Medium-Term Plan. The ROIC-WACC spread is narrow at 6.7% vs. 5.8%, making it critical to verify whether ROIC can sustainably exceed WACC once the Arqueros mine reaches full contribution
- Expected timeline from production start to full capacity at the Arqueros mine, and yield assumptions
- Whether there is risk of further cost overruns beyond the USD 486M development budget
- Remaining mineable reserve life at the Atacama mine and the trajectory of depreciation charges going forward
- Breakdown of the FY26 adjustment items of −JPY 3.9B (−JPY 2.0B YoY) by exploration project, including allocations to Puquios and Oracle Ridge
- Countermeasures to the deteriorating TC/RC trend in the smelting business
- Expected start of operations at the Taiwan plant for the water treatment agent "Polytetsu" and overseas revenue mix targets
- Pipeline of properties held for sale in the Real Estate business and outlook for disposal gains beyond FY26
- Development schedule and investment scale for the Shiramizugoe geothermal power project
- Plans for additional strategic shareholding disposals during the fiscal year following the JPY 3.1B sale in April
- Timing of ROE target and optimal capital structure disclosure in the 4th Medium-Term Plan
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Revenue | JPY 209,717M | +6.6% |
| Gross Profit | JPY 43,820M | +28.0% |
| Operating Income | JPY 18,826M | +83.5% |
| Recurring Profit | JPY 20,221M | +76.8% |
| Net Income Attributable to Owners of Parent Company | JPY 14,033M | +55.6% |
| EPS | JPY 178.37 | +63.1% |
| Comprehensive Income | JPY 22,068M | +135.7% |
| OPM | 9.0% | +3.8pt |
| ROE | 9.4% | +3.0pt |
| Recurring Profit / Total Assets | 7.3% | +2.4pt |
| ROIC | 6.7% | +2.4pt |
| Operating CF | JPY 7,580M | −57.2% |
| Investing CF | −JPY 32,834M | - |
| Financing CF | JPY 31,726M | - |
| Cash and Cash Equivalents (End of Period) | JPY 43,236M | +14.4% |
Operating income bridge (+JPY 8.5B YoY): Copper price/terms +JPY 2.2B, FX +JPY 0.4B, volume −JPY 0.6B, price/mix +JPY 2.6B, depreciation +JPY 0.9B, other costs +JPY 3.0B (Metals +2.5, Real Estate +1.7, Mineral Resources −0.6, Environment −0.6), adjustments +JPY 0.1B.
Performance By Business Segment
| Segment | Revenue | YoY | Operating Income | YoY | Margin |
|---|---|---|---|---|---|
| Mineral Resources | JPY 66,907M | +5.6% | JPY 8,007M | +10.4% | 12.0% |
| Metals | JPY 120,289M | +5.5% | JPY 6,744M | +613.3% | 5.6% |
| Machinery & Environment | JPY 15,905M | +7.7% | JPY 2,081M | +0.7% | 13.1% |
| Real Estate | JPY 4,746M | +65.1% | JPY 3,318M | +97.7% | 69.9% |
| Renewable Energy | JPY 1,868M | +6.0% | JPY 645M | +35.3% | 34.5% |
- Metals Segment (Mining): Copper concentrate revenue of JPY 25.5B (+JPY 5.4B YoY). LME copper at 490.59¢/lb (+15.4% YoY), combined with lower production costs at the Atacama mine and a JPY 1.2B depreciation reduction from increased mineable reserves
- Real Estate: Revenue of JPY 4.7B (+65.1% YoY). One-time gains from the sale of properties held for sale drove a 69.9% segment margin
- Environmental Products: Revenue of JPY 11.2B (+JPY 1.1B YoY). Higher selling prices and volume growth in water treatment agents
- Metals Segment (Smelting): Higher domestic electrolytic copper prices lifted electrolytic copper revenue to JPY 78.9B (+JPY 7.4B YoY). Improved by-product income and favorable FX also contributed
- Mineral Resources Segment (Volume): Limestone sales volume of 22,118kt (−291kt YoY). Aggregate applications declined 368kt and steel applications fell 309kt. Price increases (+JPY 1.2B) offset the decline to deliver top-line growth, but the volume trend warrants monitoring
- Machinery Segment: Industrial machinery revenue of JPY 4.6B (−JPY 40M YoY). Essentially flat, offering limited growth contribution
Progress Versus Full-Year Guidance
Against the revised guidance issued on February 6, 2026 (revenue JPY 205.0B, operating income JPY 16.5B, net income JPY 10.5B), actual results beat by +JPY 4.7B on revenue, +JPY 2.3B on operating income, and +JPY 3.5B on net income. Stronger by-product revenues in the Metals segment and deferred exploration expenses (adjustments +JPY 1.1B) were the primary drivers.
| Item | Full-Year Actual | February Guidance | Variance |
|---|---|---|---|
| Revenue | JPY 209,717M | JPY 205,000M | +2.3% |
| Operating Income | JPY 18,826M | JPY 16,500M | +14.1% |
| Recurring Profit | JPY 20,221M | JPY 16,700M | +21.1% |
| Net Income | JPY 14,033M | JPY 10,500M | +33.6% |
- In the core resources segment, the Mineral Resources division tends to generate more profit in H1 due to weather patterns and maintenance timing. The Metals division is driven primarily by copper prices and FX, with limited seasonality
- Other segments are generally less affected by seasonality, although the timing of one-off items such as real estate disposals can materially swing quarterly results
FY26 Guidance
Revenue is expected to increase by JPY 22.7B, driven primarily by the Metals segment (+JPY 24.4B), partially offset by the Real Estate business (−JPY 2.0B). Operating income is expected to decline by JPY 4.8B, mainly due to the Real Estate business (−JPY 1.6B) and higher exploration expenses in adjustments (−JPY 2.0B).
- Revenue: JPY 232,500M (+10.9%)
- Operating Income: JPY 14,000M (−25.6%)
- Recurring Profit: JPY 11,500M (−43.1%)
- Net Income Attributable to Owners of Parent Company: JPY 12,000M (−14.5%)
- EPS: JPY 152.51
Commentary On Shareholder Returns
FY25 full-year DPS was JPY 71.4 (interim JPY 117 + year-end JPY 48, adjusted for the stock split), with a payout ratio of 40.0%. Total dividends amounted to JPY 5.6B. Total shareholder return ratio was 40.0%. FY26 guidance calls for DPS of JPY 62 (interim JPY 31 + year-end JPY 31), payout ratio of 40.7%. A share buyback authorization of up to JPY 10B / 5 million shares was approved on February 27, 2026. The dividend floor is set at a fixed JPY 34 per share.
Financial Position
Interest-bearing debt surged due to borrowings for the Arqueros mine development, pushing the equity ratio down to 50.7% (−8.2pt). On the other hand, accumulated retained earnings (+JPY 6.5B) and higher unrealized gains on investment securities (+JPY 5.2B) expanded shareholders' equity to JPY 157.3B (+11.2%).
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Total Assets | JPY 310,412M | +29.2% YoY |
| └ Total Current Assets | JPY 130,871M | +28.3% YoY |
| └ Total Non-Current Assets | JPY 179,540M | +29.9% YoY |
| Cash and Deposits | JPY 43,459M | +14.2% YoY |
| Shareholders' Equity | JPY 157,307M | +11.2% YoY |
| Interest-Bearing Debt | JPY 64,062M | Short-term 17,587 + Long-term 44,719 + Leases 1,756 |
| └ Short-Term Borrowings | JPY 17,587M | +39.4% YoY |
| └ Long-Term Borrowings | JPY 44,719M | +357.6% YoY |
| Investment Securities | JPY 49,870M | +27.3% YoY |
| Construction in Progress | JPY 47,812M | Related to Arqueros mine development |
| EBITDA | JPY 26,279M | Operating income 18,826 + Depreciation 7,453 |
News Released Alongside The Earnings Announcement
Major Announcements During The Quarter
- 2026/02/27Arqueros mine development costs revised up from USD 396M to USD 486M, with production start delayed from April 2026 to Jul–Sep 2026. Revised copper and silver price assumptions are expected to improve profitability over the full mine life Progress Update: Partial Revision of Arqueros Mine Development Project in the Republic of Chile
- 2026/02/27Resolved to acquire up to 5,000,000 shares / JPY 10B of treasury stock, with subsequent cancellation of all acquired shares. The action is aimed at enhancing capital efficiency, supported by medium- to long-term cash generation capacity from mine development and planned asset disposals Notice of Resolution on Treasury Stock Acquisition and Cancellation
- 2026/04/20Signed an earn-in agreement with Eagle Mountain Mining for the Oracle Ridge copper exploration project in Arizona, USA. Total expenditure of USD 20M over four years covering environmental permits, drilling, and feasibility studies Notice of Earn-In Agreement for the Oracle Ridge Copper Exploration Project in Arizona, USA
- 2026/04/20In connection with the Oracle Ridge project, resolved a capital increase in Nittetsu Mining USA LLC and the conversion of Wedgetail Operations LLC (80% interest) into a subsidiary. This marks the company's first entry into North American mineral resources Notice of Change in Specified Subsidiaries in the United States
Large-Shareholding Filings / Material Proposals Over The Past Year
- Continental General Insurance Company: 5.02% → 8.58% (acquired incrementally from 2025/05/13 to 2025/06/05) — for investment return purposes. Filing notes the possibility of actions constituting material proposals
- Mizuho Bank, et al.: 5.84% → 6.30% (2026/02/27) — for the purpose of strengthening business relationships
- Nittetsu Mining Scholarship Foundation: 7.68% (2025/07/01, no change) — long-term holding as a core financial resource for the foundation's operations
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