Alps Alpine Co., Ltd.

Q1 revenue was JPY238.9 billion, up JPY5.3 billion YoY, with a roughly JPY13.3 billion negative FX impact from the stronger yen. Operating profit was JPY3.7 billion, up JPY2.5 billion YoY despite a JPY3.1 billion FX headwind. Ordinary profit fell to JPY1.2 billion, and net profit attributable to owners of the parent was a JPY2.8 billion loss, both hurt by foreign exchange losses. By segment, components sales were JPY82.9 billion with JPY6.2 billion operating profit; sensor and communication sales were JPY19.8 billion with a JPY2.1 billion operating loss; mobility sales were JPY131.4 billion with a JPY500 million operating loss. For H1, revenue guidance was raised by JPY40 billion to JPY498 billion and operating profit by JPY8 billion to JPY12.1 billion; ordinary profit is now expected at JPY9 billion and net profit at JPY2 billion. The Q2 assumed exchange rate is JPY145 per US dollar, and H2 guidance was left unchanged because of lingering uncertainty, especially around tariffs.

CEO Hideo Izumi emphasized that the quarter showed tangible progress toward the medium-term plan, especially in mobility cost reforms and the turnaround in the sensor and communication segment. He said Q1 actuator strength was partly distorted by temporary rare-earth-related supply issues, so he does not expect that to create a lasting competitive advantage or a sharp reversal later. He also noted that uncertainty remains for H2, including tariff effects and the broader market environment, so the company is keeping its initial second-half plan unchanged for now.

CFO Satoshi Kodaira highlighted that operating profit improved even with a JPY3.1 billion FX headwind, helped by JPY5.2 billion from revenue, JPY600 million from lower R&D, JPY2 billion from fixed-cost improvements, and JPY2 billion from production-efficiency effects. He said cash and interest-bearing debt were reduced by JPY31.8 billion, mainly from repaying JPY27.5 billion of short-term borrowings, and the equity ratio improved to 56.8% even after dividends and buybacks. On tariffs, he said the H1 direct operating profit impact was around JPY800 million to JPY1 billion, versus the earlier expectation of about JPY23 billion for the full year. He also said mobility development costs were JPY4.7 billion in Q1, are projected at JPY5.8 billion in Q2, and should improve materially in H2 as recovery concentrates later in the year.

Analysts focused on tariffs, actuator demand, mobility development costs, and whether Q1 strength implied front-loaded orders or market-share gains. Management said the tariff burden is now far smaller than feared in H1, that actuator strength in Q1 was helped by rare-earth supply disruptions but Q2 should revert toward plan, and that they are not assuming any extra upside from competitive share gains. On mobility, Kodaira explained that Q1 benefited from spending about JPY3 billion less than planned on development, while Q2 is expected to carry some of that cost into the quarter, keeping the H1 loss roughly in line with plan. On medium-term targets, Izumi said the company is already seeing progress in fixed-cost reduction, low-profit product exits, and growth areas such as mmWave sensors, stylus-related force sensors, and mobile photo printers.