UMC Electronics plunges to year-to-date low, expecting net loss this term due to restructuring of China production

UMC Electronics Co., Ltd. <6615> shares plunged sharply to a new year-to-date low after the company forecast a net loss for the fiscal year ending March 2027 following the market close on May 15. For the fiscal year ending March 2027, the company projects sales to rise 2.0% year-on-year to 115 billion yen, while operating profit is expected to drop 33.9% to 800 million yen, leading to a projected net loss of 400 million yen compared with a net profit of 283 million yen in the previous fiscal year. The downbeat outlook factors in restructuring costs for its Chinese subsidiary's production system, driven by a deteriorating market environment for Japanese clients in China.

For the fiscal year ended March 2026, sales fell 14.6% year-on-year to 112.73 billion yen, missing its previous guidance of 115 billion yen. Operating profit dropped 43.7% to 1.21 billion yen, down from its earlier forecast of 1.8 billion yen, while net profit came in at 283 million yen, reversing a 2.51 billion yen net loss from the prior year but missing its 1 billion yen guidance. Earnings were dragged down by sluggish automotive demand from Japanese clients in China, alongside prior-year tax corrections at the Chinese subsidiary that weighed on net profit.

Source: MINKABU PRESS

*Translated by generative AI. Click here for the original article.