SAGAMI RUBBER INDUSTRIES CO., LTD.

Business Details

The core segment of the Group manufactures and sells condoms (latex and polyurethane), medical rubber products, daily living aids, and other items. Operations include production at the Malaysian base, and the segment captures cross-border e-commerce and inbound demand in addition to domestic and overseas sales channels. In FY2026 (ending March 2026), the segment achieved increased revenue and profit through a recovery in demand following price revisions and the addition of new cross-border e-commerce channels.

Recent Overview

Revenue and profit increased on demand recovery after price revisions and expansion of cross-border e-commerce, though rising Malaysian manufacturing costs weighed on profit

In FY2026 (ending March 2026), the Healthcare Business achieved a significant increase in revenue and profit, with revenue of ¥4,675 million (up 9.5% year on year) and operating income of ¥762 million (up 24.7% year on year). Latex condoms recovered from the demand decline following price revisions and performed steadily both domestically and overseas. Polyurethane condoms saw increased revenue due to the addition of new cross-border e-commerce channels. On the other hand, manufacturing costs at the Malaysian base rose due to persistently high energy prices and the weak yen, which was a factor weighing on profit.

Key Products

Growth Drivers

• Expansion of sales of Polyurethane Condoms (Sagami Original) through cross-border e-commerce channels
• Increase in the proportion of high-value-added products through capturing inbound demand
• Promotion of price optimization (price increases, etc.) for latex and polyurethane condoms
• Sales expansion through deepening penetration of existing overseas markets (policy for FY2027, ending March 2027)
• High-value-added product strategy targeting the top 10% of the world's population by income

Risks

• Rising manufacturing costs at the Malaysian production base due to persistently high raw material and energy prices
• Increased manufacturing costs due to the continuing weak yen trend
• Risk of demand decline associated with price revisions
• Rising fuel and raw material prices and increased logistics costs associated with US tariff policy and geopolitical risks
• Intensifying global competition and geopolitical risks such as China's economic slowdown
• Risk of revenue dependence on major customers

Business Details

A domestic demand-oriented segment that manufactures and sells food packaging film (packaging tubes and film) and plastic products such as office files. The business structure has a high proportion of raw material costs within manufacturing costs, making it particularly susceptible to persistently high raw material prices and rising transportation costs. With improving profitability as the top priority, the company is promoting appropriate price pass-through to sales prices and reorganizing/adjusting unprofitable items.

Recent Overview

Despite a decline in sales volume, the operating loss improved significantly due to the reorganization of unprofitable items and price pass-through

Full-year revenue for FY2026 (ending March 2026) was ¥1,190 million (down 5.4% year on year), decreasing due to a decline in sales volume. On the other hand, with improving profitability as the top priority, the company promoted appropriate price pass-through to sales prices, along with reorganizing and adjusting unprofitable items and thoroughly reviewing manufacturing costs, resulting in a significant improvement in operating loss to ¥35 million (compared with an operating loss of ¥84 million in the prior year). The impact of persistently high raw material prices is being absorbed through cost management.

Key Products

Growth Drivers

• Promotion of ongoing sales price revisions (passing through cost increases to prices)
• Improvement in product portfolio profitability through reorganization and adjustment of unprofitable items
• Productivity improvement and cost reduction through thorough review of manufacturing costs
• Capturing new demand through the development of new products

Risks

• Rising manufacturing costs due to persistently high raw material prices and energy costs
• Difficulty in price pass-through negotiations with delivery customers who are themselves struggling with rising prices
• Risk of earnings volatility due to a business structure with a high proportion of raw material costs
• Sluggish revenue growth due to stagnant domestic demand and declining sales volume
• Rising raw material and logistics costs associated with US tariff policy and geopolitical risks

Business Details

The "Others" segment consists of a group of businesses that aggregates services such as mobile bathing and other operations. It aggregates businesses not included in the reportable segments (Healthcare Business and Plastic Products Business), and its share of consolidated revenue is extremely small. In FY2026 (ending March 2026), the withdrawal from the nursing care business was completed, and Sun Cloud Co., Ltd., a consolidated subsidiary, was also liquidated as of October 31, 2025, substantially shrinking the segment's business base.

Recent Overview

Withdrawal from the nursing care business completed, resulting in a 71.8% decline in revenue but an improvement in losses

In FY2026 (ending March 2026), the withdrawal from the nursing care business was completed, and revenue declined sharply to ¥44 million (down 71.8% year on year). On the other hand, the operating loss improved to ¥43 million (compared with a loss of ¥74 million in the same period of the prior year) due to the withdrawal from unprofitable businesses. In addition, Sun Cloud Co., Ltd., a former consolidated subsidiary, was liquidated as of October 31, 2025, and was excluded from the scope of consolidation as of the end of the third quarter. Segment assets also shrank to ¥9 million, with the business restructuring now nearly complete.

Key Products

Growth Drivers

• Loss reduction effect from withdrawal from unprofitable businesses (operating loss improved from ¥74 million to ¥43 million)
• Potential for improved earnings through the profitability of remaining businesses

Risks

• Extremely uncertain profitability prospects for the remaining standalone business following the completed withdrawal from the nursing care business
• Segment assets having shrunk to ¥9 million, indicating that the business base has effectively disappeared
• Unclear business continuity for the segment following the reduction in the scope of consolidation due to the liquidation of Sun Cloud Co., Ltd.
• A structural profitability issue in which losses continue despite minimal revenue, with revenue of ¥44 million and an operating loss of ¥43 million