Kyowa Leather Cloth Sees Revenue Drop Despite Cost Control Efforts

TOKYO, May 08 (Pulse News Wire) – Kyowa Leather Cloth CO.,LTD. (3553.T) reported a decline in revenue for the fiscal year ending March 2026, primarily due to reduced sales in North America and higher raw material costs.

However, the company managed to offset some losses through cost-cutting measures and favorable exchange rates. Operating profit decreased to ¥920 million from ¥2.14 billion in the previous fiscal year, while net income was ¥655 million from -¥1.070 billion. In detail, the company's vehicle-related products saw a significant drop in sales, largely driven by lower demand in North America. Sales for residential and construction materials increased slightly compared to the prior year. Overall, the company’s consolidated revenue dropped by ¥581 million to ¥55.80 billion.

Looking ahead, Kyowa expects a temporary loss in the fiscal year ending March 2027 due to unexpected increases in raw material prices caused by Middle East tensions. Nevertheless, the company remains committed to its mid-term investment plan aimed at modernizing facilities and enhancing digital capabilities. Equipment investments will continue, with plans to reconstruct manufacturing lines at its Tengen First Factory. Despite the anticipated short-term challenges, Kyowa maintains its dividend policy, planning to distribute annual dividends of ¥100 per share for both fiscal years 2026 and 2027. The dividend payout ratio is set at 52%, reflecting the company's confidence in its long-term strategy despite near-term headwinds.