OHARA INC.

Business Details

A segment engaged in the manufacture and sale of Optical Press Products (optical glass materials) and Optical Block Products (lens materials for optical equipment). Major customers include camera and optical equipment manufacturers such as Canon Inc. Domestic and overseas consolidated subsidiaries (Taiwan, Malaysia, China, the United States, Germany, and Hong Kong) handle the processing and sale of products. Demand from the interchangeable-lens digital camera market for mirrorless cameras and the XR market serves as the main source of revenue. Although operating losses have been recorded for three consecutive fiscal periods, the losses have been trending toward reduction due to price revisions.

Recent Overview

Interim period saw higher sales and a narrower operating loss, but the full-year forecast was revised toward a wider loss

Sales in the Optics Business for the interim period of FY2026 (ending October 2026) (November 2025 to April 2026) were ¥8,424 million (up 17.9% year on year), an increase in sales. The operating loss narrowed to ¥168 million from ¥388 million in the same period of the previous year. This was driven by solid demand for products for the digital camera market, along with improved profitability from increased sales of higher-priced downstream products (Optical Block Products) and price revisions. On the other hand, while the full-year sales forecast was revised upward to ¥16,900 million (up ¥600 million from the previous forecast), the operating loss forecast was revised to a wider loss of △¥400 million (from the previous forecast of △¥300 million), reflecting cost increases such as soaring raw material costs and the abolition of VAT rebates.

Key Products

Growth Drivers

• Solid trend in demand for interchangeable-lens digital cameras and interchangeable lenses, centered on mirrorless cameras
• Improved product mix due to increased sales of higher-priced downstream products (Optical Block Products)
• Improved gross profit margin due to price revisions aimed at securing appropriate profit levels
• Advancement of development of glass materials for AR glasses for the XR (cross reality) market
• Strengthened supply and sales structure for value-added products through supply chain development in Southeast Asia
• Increase in order backlog (order backlog of ¥5,294 million at the end of FY2025 (ending October 2025), 125.1% of the previous fiscal year)

Risks

• Risk of rising cost ratio due to soaring raw material costs (rare earths, etc.)
• Procurement risk for rare earth raw materials (high dependence on China)
• Risk of increased costs due to the abolition of VAT rebates in China
• Risk of declining profitability due to deteriorating product mix
• Risk related to production capacity and inventory adjustments accompanying the business conversion of the Taiwan plant (from optical glass to low-dielectric glass)
• Risk of medium- to long-term contraction of the camera market (substitution by smartphones, etc.)
• Risk of impairment of fixed assets due to continued operating losses for three consecutive fiscal periods