Torishima Pump Mfg. Co., Ltd

Business Details

The Group's core businesses are the manufacture, sale, installation, and servicing of various pumps and pump plants, environmental equipment, small hydropower generation facilities, mechanical seals, and related products. Its main markets are social infrastructure fields such as water and sewage systems, energy, and seawater desalination, with strength in pump design and manufacturing technology for use under harsh conditions such as high temperature, high pressure, and large flow rates. Overseas demand accounts for approximately 61% of net sales, with the Middle East being the largest market (net sales of ¥24,833 million).

Recent Overview

Net sales up 7.4%, but operating profit declined due to higher outsourcing costs and fixed costs; net profit rose 46% on gains from securities sales

In FY2026 (ending March 2026), the company achieved higher sales with net sales of ¥92,927 million (up 7.4% year on year), but operating profit declined to ¥5,005 million (down 8.2%) due to increased outsourcing costs and higher fixed costs such as labor costs. On the other hand, foreign exchange losses shrank significantly from ¥1,711 million to ¥465 million, improving ordinary profit to ¥5,204 million (up 14.6%). Profit attributable to owners of parent rose sharply to ¥5,945 million (up 46.1%), boosted by the recording of a ¥2,844 million gain on sale of held securities. The order backlog stood at ¥106,199 million, maintaining a record-high level. The company plans to make Shin Nippon Machinery Co., Ltd. (expected acquisition price of approximately ¥14.9 billion) a subsidiary in July of FY2027 (ending March 2027).

Key Products

Growth Drivers

• Stable accumulation of net sales supported by an ample order backlog (¥106,199 million at the end of FY2026 (ending March 2026), up 1.9% year on year)
• Continued solid overseas demand (overseas net sales of ¥56,483 million in FY2026 (ending March 2026), 60.8% of total sales), particularly demand for seawater desalination plants in the Middle East (Middle East net sales of ¥24,833 million)
• Significant expansion of private-sector orders (¥14,554 million in FY2026 (ending March 2026), up 25.3% year on year), diversifying the customer base
• Solid trends in demand for power generation and general industrial pumps driven by surging generative AI electricity demand and decarbonization needs, and securing the first order for a superconducting-motor liquefied hydrogen pump
• Business expansion into the steam turbine and process pump domains and technological complementation through making Shin Nippon Machinery Co., Ltd. a subsidiary (planned for July of FY2027 (ending March 2027)), evolving into a comprehensive fluid rotating machinery manufacturer
• Expansion of the after-sales service business: accumulation of high-margin service revenue through service network expansion
• Strengthened shareholder returns through a progressive dividend policy (DOE of 3%, payout ratio target of 35%) and share buybacks (¥1,000 million during the period)

Risks

• Decline in operating margin due to increased costs such as outsourcing expenses and higher fixed costs including labor costs (operating margin of 5.4% in FY2026 (ending March 2026), down from 6.3% in the prior period)
• Foreign exchange risk on foreign-currency-denominated sales from overseas orders (foreign exchange loss of ¥465 million during the period, an improvement from ¥1,711 million in the prior period, but still a significant impact)
• Impact on international supply chains from changes in US trade policy and prolonged geopolitical risks (Ukraine, Iran, the Middle East)
• Uncertainty in domestic demand due to a decline in public-sector orders (public-sector orders of ¥20,189 million in FY2026 (ending March 2026), down 18.2% year on year)
• Financial burden and integration risk associated with the acquisition of Shin Nippon Machinery Co., Ltd. (expected acquisition price of approximately ¥14.9 billion), which is not yet reflected in the FY2027 (ending March 2027) earnings forecast
• Risk of timing mismatches in recognizing sales from ordered construction projects (quarterly results are prone to fluctuation due to the business characteristic of delivery dates concentrated at fiscal year-end)
• A significant decline in profit is forecast for FY2027 (ending March 2027), with profit attributable to owners of parent expected to fall to ¥3,800 million (down 36.1% year on year), mainly due to the absence of the prior period's gain on sale of securities