Hirose Electric Co., Ltd. TSE:6806

Hirose Electric : Interim Financial Report

Published

Source: MarketScreener

English translation

【Document to be filed】Interim Financial Report

【Provisions to base upon】Article 24-5-1, paragraph 1 of the Financial Instruments and Exchange Act

【Filing to】Director-General of the Kanto Local Finance Bureau

【Date of filing】November 13, 2025

【Fiscal Period】For the first half of 79thterm (from April 1, 2025 to September 30, 2025)

【Company name】HIROSE ELECTRIC CO., LTD.

【Title and name of representative】Shin Kamagata, President

【Location of head office】2-6-3 Nakagawa Chuoh, Tsuzuki-Ku, Yokohama, Kanagawa, Japan

【Telephone number】+81-45-620-7410

【Contact person】Masakazu Yamaoka, General Manager of Finance Department

【Place of contact】2-6-3 Nakagawa Chuoh, Tsuzuki-Ku, Yokohama, Kanagawa, Japan

【Telephone number】+81-45-620-7410

【Contact person】Masakazu Yamaoka, General Manager of Finance Department

【Place where the document to be filed is available for public inspection】Tokyo Stock Exchange, Inc. (2-1, Nihonbashi-kabutocho, Chuo-ku, Tokyo, Japan)

【Company Information】

  1. Overview of the Company

    1. Changes in major management indicators

      (Yen in millions)

      78thFiscal Term Consolidated Cumulative

      79thFiscal Term Consolidated Cumulative

      78thFiscal Term

      Fiscal period

      From April 1, 2024

      to September 30, 2024

      From April 1, 2025

      to September 30, 2025

      From April 1, 2024

      to March 31, 2025

      Revenue

      (Second quarter from April 1 to Sep 30)

      94,519

      102,025

      189,420

      Profit before income taxes

      23,846

      22,101

      46,218

      Profit attributable to owners of parent

      17,531

      15,523

      33,033

      Comprehensive income attributable to owners of parent

      13,214

      21,979

      21,450

      Equity attributable to owners of parent

      370,119

      377,371

      370,147

      Total Assets

      414,715

      426,947

      416,866

      Earnings per share attributable to owners of the parent-Basic (Yen)

      518.17

      459.37

      976.33

      Earnings per share attributable to owners of the parent-Diluted

      (Yen)

      518.17

      459.37

      976.33

      Ratio of total equity attributable to owners of parent (%)

      89.2

      88.4

      88.8

      Cash flows from operating activities

      26,953

      22,730

      55,682

      Cash flows from investing activities

      (23,086)

      (9,570)

      (42,947)

      Cash flows from financing activities

      (7,947)

      (15,423)

      (16,671)

      Balance of cash and cash equivalents at end of the period

      85,665

      84,024

      85,666

      (Notes)

      1. We prepare the condensed interim consolidated financial statements. The transition of the major management indicators is not included.

      2. The financial data above are based on the condensed interim consolidated financial statements and consolidated financial statements prepared in accordance with International Financial Reporting Standards (IFRS).

      3. The exercise period of the 7th series of stock acquisition rights expired on September 30, 2024. As a result, for the 79th interim consolidated fiscal period, diluted earnings per share are the same amount as basic earnings per share since there are no residual shares.

    2. Description of Business

    There were no significant changes in the business activities of our group (the Company and its affiliates) during the current interim-consolidated fiscal period.

    There were also no changes in major subsidiaries.

  2. Business Overview

    1. Risk Factors

      There were no new business and other risks or material changes in business and other risks that were reported in the annual securities report for the previous fiscal year during the current interim consolidated accounting period.

    2. Management Analysis of Financial Position, Operating Results and Cash Flows The forward-looking statements below were determined as of September 30, 2025.

      1. Overview of Operating Results

        During the six months ended September 30, 2025, Japan's economy saw resilient consumer spending underpinned by robust inbound demand. However, rising raw material costs and inflationary pressures weighed on corporate earnings. The manufacturing sector continues to face a challenging environment due to factors such as U.S. tariff policies and heightened geopolitical risks.

        In overseas market, inflation slowed in Europe and the United States, while consumption and manufacturing activity remained subdued due to persistently high interest rates. China continued to experience adjustments in its real estate market, delaying the recovery of domestic demand. The global economy slowed moderately.

        Under this situation, Hirose group has been expanding global business mainly for smartphone market, automotive market, and industrial market. And we have been promoting reinforcement of development, sales, and production system for new products with highly added value to respond advanced market needs quickly. In July, we acquired S.E.R. (Shinagawa-ku, Tokyo), a company engaged in the semiconductor test equipment business, as a subsidiary.

        Business performance showed signs of recovery in business for the industrial equipment market, with favorable results for the consumer equipment market and stable business for the automotive equipment market. As a result, the revenue in fiscal 2025 increased by 7.9 % to JPY 102,025 million compared to the same period of the previous fiscal year. Operating profit decreased by 7.9% to JPY 20,461 million and profit attributable to owners of parent decreased by 11.5% to JPY 15,523 million as compared with the six months of fiscal 2024.

        The business results by reportable segments are as stated below.

        [Multi-pin connectors]

        Our flagship multi-pin connectors include a variety of connector types such as circular connectors, rectangular connectors, connectors for ribbon cables, connectors for printed circuit boards, connectors used for FPCs (flexible printed circuits boards) and nylon connectors. These types of connectors are used widely, such as for smartphones, communication equipment, automotive electronics, measuring and control equipment, FA equipment, and medical electronics equipment, as well as other industrial equipment. We expect that demand for these connectors will grow associated with the progress of advanced information and telecommunications network society, and energy saving society considering environment in the future. Segment sales for the six months of fiscal 2025 increased by 5.5% to JPY 90,283 million, operating profit decreased by 14.3% to JPY 17,726 million compared with the six months of fiscal 2024.

        [Coaxial connectors]

        Coaxial connectors are a special type of high-performance connectors used primarily for microwave and other high-frequency signals. This is used mainly for antenna connection of Wi-Fi and Bluetooth for smartphone and PC, GPS antenna connection for automobiles and high-frequency signal connection for wireless communication device and electronic measuring instruments. Optical fiber connectors and coaxial switches are also included in this segment. Segment sales for the six months of fiscal 2025 increased by 38.4% to JPY 8,754 million, operating profit increased by 91.1% to JPY 2,696 million compared with the six months of fiscal 2024.

        [Other products]

        This segment includes micro switches and instruments for connectors. Segment sales for the six months of fiscal 2025 increased by 14.5% to JPY 2,988 million. Operating profit decreased by 67.6% to JPY 39 million, compared with the six months of fiscal 2024.

      2. Overview of Cash Flows

        Cash and cash equivalents at the first half of the fiscal year ending March 31, 2026, decreased by JPY 1,642 million to JPY 84,024 million compared to the end of the fiscal year ended March 31, 2025

        1. Cash flows from operating activities

          Cash flows from operating activities increased by JPY 22,730 million. (In the 2Q cumulative total for fiscal 2024, it increased by JPY 26,953 million.) This increase was mainly due to a rise in capital by appropriating interim profit before tax, JPY 22,101 million, and depreciation and amortization, JPY 9,469 million.

        2. Cash flows from investing activities

          Cash flows from investing activities decreased by JPY 9,570 million. (In the 2Q cumulative total for fiscal 2024, it decreased by JPY 23,086 million.) This was due mainly to purchase of property, plant and equipment of JPY10,705 million and purchase of investments of JPY 9,537 million.

        3. Cash flows from financing activities

          Cash flows from financing activities decreased by JPY 15,423 million. (In the 2Q cumulative total for fiscal 2024, it decreased by JPY 7,947 million.) This is due to the dividend payments of 8,290 million yen and the expenditure of 6,587 million yen for the acquisition of treasury stock, among other factors.

      3. Analysis of financial condition

        Total assets for the six months of fiscal 2025 increased by JPY10,081 million to JPY 426,947 million compared to the end of the previous consolidated fiscal year mainly because trade and other receivables, etc. increased. Total liabilities increased by JPY 2,857 million to JPY 49,576 million because of the increases in other current liabilities and deferred tax liabilities. Total equity increased by JPY 7,224 million to JPY377,371 million, primarily due to the recognition of interim profit. As a result, the equity ratio attributable to owners of the parent decreased by 0.4 percentage points compared to the end of the previous fiscal year, reaching 88.4%.

      4. Assumptions used for accounting estimates

        There are no significant changes in the accounting estimated from "Management Analysis of Financial Position, Operating Results and Cash Flows" stated in the annual securities report of FY2025and assumptions used for the estimates.

      5. Research and development

      Our research and development expenses for the six months ended September 30, 2025, were JPY 4,828 million. As the achievement of research and development activities, fixed assets including tools appropriated to JPY 1,839 million. When these amounts are added up, the total of R&D investment was JPY 6,666 million. There were no significant changes in research and development activities for the period.

    3. Material Agreements, etc.

    There were no decisions or conclusions about significant business agreements during the six months ended September 30, 2025.

  3. Information on the Company

    1. Information on the Company's Shares

      1. Total number of shares, etc.

        ①Total Number of Shares

        Class

        Total number of shares authorized to be issued (Shares)

        Common stock

        80,000,000

        Total

        80,000,000

        ②Issued Shares

        Class

        Number of shares issued as of the end of second quarter (Shares)

        (September 30, 2025)

        Number of shares issued as of the filing date (Shares) (November 13, 2025)

        Stock exchange on which the Company is listed or authorized financial instruments firms' association where the

        Company is registered

        Description

        Common stock

        35,693,969

        35,693,969

        Tokyo Stock Exchange, Inc. (prime market)

        The number of shares per unit of shares is 100 shares

        Total

        35,693,969

        35,693,969

        -

        -

      2. Information on the share acquisition rights, etc.

        ① Details of share option plans Not applicable.

        ② Other information about share acquisition rights Not applicable.

      3. Information on Moving Strike Convertible Bonds Not applicable.

      4. Changes in the total number of shares issued, common stock, etc.

        Date

        Change in the total number of shares issued

        (Shares)

        Balance of the total number of shares issued (Shares)

        Change in common stock (Yen in millions)

        Balance of common stock (Yen in millions)

        Change in capital reserve

        (Yen in millions)

        Balance of capital reserve (Yen in millions)

        From April 1 to September 30, 2025

        -

        35,693,969

        -

        9,404

        -

        12,007

      5. Status of Major Shareholders

        Name or title

        Address

        Number of shares held (hundred shares)

        Ratio of shares (excluding treasury stock) held to total number of

        shares issued (%)

        The Master Trust Bank of Japan, Ltd.

        (Trust Account)

        8-1, Akasaka 1-chome, Minato-ku, Tokyo

        46,054

        13.72

        The Hirose Foundation

        1-7-27 Roppongi, Minato-ku, Tokyo

        31,476

        9.38

        The Custody Bank of Japan, Ltd.

        (Trust Account)

        8-12, Harumi 1-chome, Chuo-ku, Tokyo

        29,157

        8.68

        JP Morgan Chase & Co.

        Bank 380055

        (Standing Proxy: Mizuho Bank, Ltd.)

        270 PARK AVENUE, NEW YORK, NY 10017, U.S.A.

        (15-1, Konan 2-chome,

        Minato-ku, Tokyo)

        20,043

        5.97

        State Street Bank and Trust Company

        505223

        (Standing proxy: Mizuho Bank, Ltd.)

        P.O. BOX 351 BOSTON MASSACHUSETTS

        02101 U.S.A.

        (15-1, Konan 2-chome, Minato-ku, Tokyo, Japan)

        12,551

        3.74

        H.S. Planning Ltd.

        5-10, Higashi Shinagawa 1-chome,

        Shinagawa-ku, Tokyo

        12,465

        3.71

        National Mutual Insurance Federation of Agricultural Cooperatives

        7-9, Hirakawa cho 2-chome, Chiyoda-ku, Tokyo

        9,791

        2.92

        Mizuho Trust & Banking Co.

        (Trust Account) 0700210

        3-3, Marunouchi 1-chome, Chiyoda-ku, Tokyo

        8,707

        2.59

        Mizuho Trust & Banking Co.

        (Trust Account) 0700211

        3-3, Marunouchi 1-chome, Chiyoda-ku, Tokyo

        8,652

        2.58

        State Street Bank and Trust Company

        505001

        (Standing proxy: Mizuho Bank, Ltd.)

        ONE CONGRESS STREET, SUITE 1, BOSTON MASSACHUSETTS

        (15-1, Konan 2-chome,

        Minato-ku, Tokyo, Japan)

        7,425

        2.21

        Total

        -

        186,321

        55.50

        (Note) 1. The number of shares held is rounded down to the nearest hundred shares.

    2. All shares held by The Master Trust Bank of Japan, Ltd., The Custody Bank of Japan, Ltd., Mizuho Trust & Banking Co. (Trust Account) 0700210 and Mizuho Trust & Banking Co. (Trust Account) 0700211 are related to the trust business.

    3. The number of shares held in trust for JPMorgan Chase Bank 380055, State Street Bank and Trust Company 505223 and State Street Bank and Trust Company 505001 as of September 30, 2025, are not stated because the Company is unable to ascertain the number of shares related to the trust business.

    4. In addition to the above, there are 21,210 hundred shares of treasury stock. The treasury stock does not include the Company's shares (832 hundred shares) held by the trust established by the Company for directors, executive officers, and employees.

    5. In a substantial shareholding report made available to the public on September 3, 2025, Nomura Holdings, Inc. and its joint holder Nomura Asset Management Co. are listed as holding the following shares as of August 29, 2025, but as the Company is unable to confirm the number of shares beneficially owned as of September 30, 2025, they are not included in the above list of major shareholders.

      The details of the large shareholding report are as follows.

      Name or title

      Address

      Number of shares held (hundred shares)

      Percentage of shares held (%)

      Nomura Holdings, Inc.

      1-13-1 Nihonbashi, Chuo-ku, Tokyo

      552

      0.15

      Nomura Asset Management Co.

      2-2-1 Toyosu, Koto-ku, Tokyo

      26,629

      7.46

      Name or title

      Address

      Number of shares held (hundred shares)

      Percentage of shares held (%)

      First Eagle Investment Investment Management LLC

      1345 Avenue of the Americas, New York, NY 10105-0048 U.S.A.

      26,104

      7.01

    6. In a substantial shareholding report made available to the public on September 21, 2022, First Eagle Investment Management LLC stated that it held the following shares as of September 15, 2022. However, the Company is unable to confirm the number of shares beneficially owned as of September 30, 2025, and is therefore not included in the above list of major shareholders. The details of the large shareholding report are as follows.

    1. Information on voting rights.

    ① Issued shares (As of September 30, 2025)

    Classification

    Number of shares (Shares)

    Number of voting rights

    Description

    Shares without voting rights

    -

    -

    -

    Shares with restricted voting rights (treasury shares, etc)

    -

    -

    -

    Shares with restricted voting rights (others)

    -

    -

    -

    Shares with full voting rights (treasury shares, etc.)

    (treasury shares)

    Common stock 2,121,000

    -

    Standard stocks which there is no restriction on contents of the right of the stock

    Shares with full voting rights (others)

    Common stock 33,512,600

    335,126

    Same as above

    Shares less than one unit

    Common stock 60,369

    -

    Same as above

    Number of issued shares

    35,693,969

    -

    -

    Total number of voting rights

    -

    335,126

    -

    (Notes) 1. The common stock in the column "Shares with full voting rights (other)" includes 83,200 shares (832 voting rights) of the Company's stock held by the trusts established by the Company for the delivery of shares to directors and executive officers and for the delivery of shares to employees.

    2. The number of shares of common stock in the "shares less than one unit" column includes 59 shares held in the name of Japan Securities Depository Center, Inc.

    ② Treasury Shares and Others (As of September 30,2025)

    Name of shareholder

    Address

    Number of shares held under own name (Shares)

    Number of shares held under the name of others (Shares)

    Total number of shares held (Shares)

    Ownership percentage to the total number of issued shares (%)

    (Treasury shares) HIROSE ELECTRIC

    2-6-3 Nakagawa Chuoh, Tsuzuki-Ku, Yokohama, Kanagawa

    2,121,000

    -

    2,121,000

    5.94

    Total

    -

    2,121,000

    -

    2,121,000

    5.94

    (Notes) 1. The above list does not include the Company's shares, owned by the trust in the delivery of shares to executive officers and the trust in the delivery of shares to employees.

    2. Information of the board members Not applicable.

  4. Financial Information

    1. Method of Preparation of the Condensed Interim Consolidated Financial Statements

      The Company's condensed interim consolidated financial statements are Type 1 interim consolidated financial statements and have been prepared in accordance with International Accounting Standard No. 34 "Interim Financial Reporting" in accordance with Article 312 of the "Regulations Concerning Terms, Forms and Preparation Methods of Consolidated Financial Statements" (Ministry of Finance Ordinance No. 28 of 1976).

    2. About Audit Certification

      Pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Law, the Company's condensed interim consolidated financial statements for the interim period (from April 1, 2025 to September 30, 2025) were reviewed by KPMG AZSA LLC during the period.

      【1】Condensed Consolidated Financial Statements

      1. Condensed Consolidated Statements of Financial Position

        (Yen in millions)

        Note

        As of March 31, 2025

        As of September 30, 2025

        Assets

        Current assets

        Cash and cash equivalents

        10

        85,666

        84,024

        Trade and other receivables

        10

        40,394

        48,110

        Inventories

        25,091

        25,889

        Other financial assets

        10

        87,589

        80,373

        Other current assets

        10,036

        7,561

        Total current assets

        248,776

        245,957

        Non-current assets

        Property, plant and equipment

        86,384

        89,512

        Right-of-use assets

        4,937

        5,077

        Intangible assets

        6,615

        7,211

        Other financial assets

        10

        63,785

        72,447

        Deferred tax assets

        2,291

        2,472

        Retirement benefit assets

        3,586

        3,401

        Other non-current assets

        492

        870

        Total non-current assets

        168,090

        180,990

        Total assets

        416,866

        426,947

        (Yen in millions)

        Note

        As of March 31, 2025

        As of September 30, 2025

        Liabilities

        Current liabilities

        Trade and other payables

        10

        12,896

        14,020

        Lease liabilities

        1,048

        1,135

        Other financial liabilities

        10

        44

        1,116

        Income taxes payable

        8,139

        5,512

        Other current liabilities

        6,937

        8,540

        Total current liabilities

        29,064

        30,323

        Non-current liabilities Lease liabilities

        Other financial liabilities Retirement benefit liability Deferred tax liabilities

        Other non-current liabilities

        10

        4,153

        -304

        12,087

        1,111

        4,199

        166

        377

        13,377

        1,134

        Total non-current liabilities

        17,655

        19,253

        Total liabilities

        46,719

        49,576

        Equity

        Share capital Capital surplus Retained earnings Treasury shares

        Other components of equity

        6

        9,404

        11,224

        348,972

        (27,462)

        28,009

        9,404

        11,326

        356,206

        (34,030)

        34,465

        Total equity attributable to owners of parent

        370,147

        377,371

        Total equity

        370,147

        377,371

        Total liabilities and equity

        416,866

        426,947

      2. Condensed Consolidated Statement of Profit or Loss (For the six months ended September 30, 2024 and 2025)

        (Yen in millions)

        Note

        For the first half of the year ending March 31, 2025 (From

        Apr 1, 2024 to Sep 30, 2024)

        For the first half of the year ending March 31, 2026 (From

        Apr 1, 2025 to Sep 30, 2025)

        Revenue

        8

        94,519

        102,025

        Cost of sales

        51,731

        59,109

        Gross profit

        42,788

        42,916

        Selling, general and administrative

        20,555

        22,199

        expenses

        Other income

        303

        289

        Other expenses

        320

        545

        Operating profit

        22,216

        20,461

        Financial income

        2,262

        1,871

        Financial costs

        632

        231

        Profit before tax

        23,846

        22,101

        Income tax expense

        6,315

        6,578

        Profit

        17,531

        15,523

        Profit attributable to: Owners of parent

        17,531

        15,523

        Earnings per share: Basic (yen)

        Diluted (yen)

        9

        9

        518.17

        518.17

        459.37

        459.37

      3. Condensed Consolidated Statement of Comprehensive Income (For the six months ended September 30, 2024 and 2025)

        (Yen in millions)

        Note

        For the first half of the year ending March 31, 2025 (From Apr 1, 2024

        For the first half of the year ending March 31, 2026 (From Apr 1, 2025

        to Sep 30, 2024)

        to Sep 30, 2025)

        Profit

        17,531

        15,523

        Other comprehensive income

        Items that will not be reclassified to profit or loss

        Equity instruments measured at fair value through other comprehensive income

        174

        529

        Total items that will not be reclassified to profit or loss

        174

        529

        Items that may be reclassified to profit or loss

        Exchange differences on translation of foreign operations

        (4,472)

        5,906

        Debt instruments measured at fair value through other comprehensive income

        (19)

        21

        Total items that may be reclassified to profit or loss

        (4,491)

        5,927

        Total other comprehensive income after tax

        (4,317)

        6,456

        Total comprehensive income

        13,214

        21,979

        Total amount of comprehensive income attributable to:

        Owners of parent

        13,214

        21,979

      4. Condensed Consolidated Statement of Changes in Equity

        (Yen in millions)

        Note

        Share capital

        Capital surplus

        Retained earnings

        Treasury shares

        Other components of equity

        Total equity attributable to owners of

        parent

        Total equity

        Balance as of April 1, 2024

        9,404

        11,183

        340,806

        (35,807)

        38,587

        364,173

        364,173

        Profit

        17,531

        17,531

        17,531

        Other comprehensive income

        (4,317)

        (4,317)

        (4,317)

        Total of comprehensive income

        -

        -

        17,531

        -

        (4,317)

        13,214

        13,214

        Dividend of surplus

        7

        (10)

        (8,274)

        115

        8,143

        (7,443)

        (8)

        63

        8,274

        15

        (7,443)

        (8)

        53

        -130

        -

        (7,443)

        (8)

        53

        -130

        -

        Purchase of treasury shares

        Disposal of treasury shares

        Cancellation of treasury shares

        6

        Share-based payment transactions

        Transfer to retained earnings

        (8,143)

        Total transactions with owners

        -

        (26)

        (15,586)

        8,344

        -

        (7,268)

        (7,268)

        Balance as of September 30, 2024

        9,404

        11,157

        342,751

        (27,463)

        34,270

        370,119

        370,119

        Note

        Share capital

        Capital surplus

        Retained earnings

        Treasury shares

        Other components of equity

        Total equity attributable to owners of

        parent

        Total equity

        Balance as of April 1, 2025

        9,404

        11,224

        348,972

        (27,462)

        28,009

        370,147

        370,147

        Profit

        15,523

        15,523

        15,523

        Other comprehensive income

        6,456

        6,456

        6,456

        Total of comprehensive income

        -

        -

        15,523

        -

        6,456

        21,979

        21,979

        Dividend of surplus

        7

        (8,290)

        (8,290)

        (8,290)

        Purchase of treasury shares

        (0)

        (6,587)

        (6,587)

        (6,587)

        Disposal of treasury shares

        0

        0

        0

        Share-based payment transactions

        102

        20

        122

        122

        Total transactions with owners

        -

        102

        (8,290)

        (6,567)

        -

        (14,755)

        (14,755)

        Balance as of September 30, 2025

        9,404

        11,326

        356,206

        (34,030)

        34,465

        377,371

        377,371

      5. Condensed Consolidated Statement of Cash Flows

(Yen in millions)

Note

For the first half of the FY2024

(From April 1, 2024 to

September 30, 2024)

For the first half of the FY2025

(From April 1, 2025 to

September 30, 2025)

Cash flows from operating activities: Profit before tax

Depreciation and amortization

Impairment loss (reversal of impairment loss) Financial income

Financial costs

Decrease (increase) in trade and other receivables Decrease (increase) in inventories

Increase (decrease) in trade and other payables

Others

23,846

8,958

-(2,262)

632

(6,359)

434

697

1,944

22,101

9,469

445

(1,871)

231

(6,724)

84

1,361

4,932

Subtotal

27,890

30,028

Interest received

Dividends received Income taxes paid

1,152

200

(2,289)

1,358

223

(8,879)

Net cash provided by operating activities

26,953

22,730

Cash flows from investing activities

Net decrease (increase) in time deposits

Proceeds from sale and redemption of investments Purchase of investments

Purchase of property, plant and equipment

Cash inflows from acquisition of subsidiaries Others

(1,633)

4,390

(10,651)

(14,329)

-(863)

5,216

6,317

(9,537)

(10,705)

78

(939)

Net cash used in investing activities

(23,086)

(9,570)

Cash flows from financing activities Purchase of treasury shares Dividends paid

Repayments of lease liabilities

Others

(8)

(7,443)

(549)

53

(6,587)

(8,290)

(519)

(27)

Net cash used in financing activities

(7,947)

(15,423)

Effect of exchange rate changes on cash and cash equivalents

(596)

621

Increase (decrease) in cash and cash equivalents

(4,676)

(1,642)

Cash and cash equivalents at the beginning of the year

90,341

85,666

Cash and cash equivalents at the end of the period

85,665

84,024

【Notes to Condensed Consolidated Financial Statements】

  1. Reporting Entity

    HIROSE ELECTORIC (the "Company)" is a corporation located in Japan. Our subsidiaries (hereinafter referred to as the "Group") and we manufacture and sell mainly multi-pin connectors, coaxial connectors and other electronic components.

  2. The Basis for preparation of the statements

    1. Compliance with IFRS

      Our condensed interim consolidated financial statements are prepared in accordance with IAS 34 "Interim Financial Reporting" pursuant to the provision of Article 93 of the Regulations for Quarterly Consolidated Financial Statements, as the company meets the criteria of a "Designated IFRS Specified Company" defined in Article 1-2 of the Regulations.

      The condensed interim consolidated financial statements do not include all the information that must be disclosed in the

      annual consolidated financial statements and therefore should be used in conjunction with the consolidated financial statements for the year ended March 31, 2025.

      Condensed interim consolidated financial statements of the company were authorized by our president, Shin Kamagata, on November 13, 2025.

    2. Functional currency and presentation currency

      The condensed consolidated financial statements of the company are presented in Japanese yen, which is the functional currency of us, and the amounts are described in unites of JPY 1 million. The amounts are also rounded to the nearest million yen.

  3. Material Accounting Policies

    Material accounting policies applied in the condensed quarterly consolidated financial statements are the same as the policies applied in the consolidated financial statements for the year ended March 31, 2025. The income tax expense for the six months ended September 30, 2025, was calculated based on an estimated annual effective tax rate.

  4. Significant accounting estimates and judgements

    In preparing the condensed consolidated financial statements, HIROSE ELECTRIC applies accounting policies and makes judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, also uses accounting estimates and assumptions. The company collects past experiences and available information, and considers various factors thought to be rational at the closing date. These estimates and assumptions are based on the best judgement of the executive. However, the figures based on these estimations and assumptions might be different from the actual result.

    We continually review our estimates and underlying assumptions. We recognize the impact of revised estimates in the period in which the estimates are revised and in future periods.

    Critical accounting estimates and judgments in the condensed consolidated financial statements are, in principle, the same as those used in the consolidated financial statements for the previous fiscal year.

  5. Business Segment

    1. Overview of reportable segments

      In the reportable segments of Hirose group, it is possible to acquire isolated financial information among constituent units of our group. It is also an object being examined on a regular basis to evaluate our decision regarding resource allocation and business results by the board of directors.

      Our business is manufacturing and selling mainly connectors and other products, and we formulate a domestic and global comprehensive strategy for our products and service.

      Therefore, Hirose group consists of segments by products based on the shape of connectors. Our reporting segment is "Multi-pin connectors" and "Coaxial connectors".

      "Multi-pin connectors" include circular and rectangular connectors implemented to the outside of devices. They also include connectors implemented internal of the devices, such as connectors for ribbon cables, connectors for printed circuit boards, connectors used for FPCs (flexible printed circuit boards) and nylon connectors.

      "Coaxial connectors" are a special type of high-performance connectors connecting high-frequency signals such as microwave, and this segment includes optical fiber connectors.

    2. Information on reportable segments

      The revenue stated in reportable segments is operating profit on a basis.

      For the first half of the fiscal year ending March 31, 2025 (from April 1, 2024 to September 30, 2024)

      (Yen in millions)

      Reportable segments

      Others *

      Amount of condensed quarterly consolidated financial statements

      Multi-pin connectors

      Coaxial connectors

      Total

      Revenue

      Revenue from external customers

      85,585

      6,325

      91,910

      2,609

      94,519

      Total revenue

      85,585

      6,325

      91,910

      2,609

      94,519

      Operating profit

      20,686

      1,411

      22,097

      119

      22,216

      Financial income

      -

      -

      -

      -

      2,262

      Financial costs

      -

      -

      -

      -

      632

      Profit before tax

      -

      -

      -

      -

      23,846

      *"Others" category is not included into reportable segments. "Others" includes micro switches and instruments for connectors.

      For the first half of the fiscal year ending March 31, 2026 (from April 1, 2025 to September 30, 2025)

      (Yen in millions)

      Reportable segments

      Others *

      Amount of condensed quarterly consolidated financial statements

      Multi-pin connectors

      Coaxial connectors

      Total

      Revenue

      Revenue from external customers

      90,283

      8,754

      99,037

      2,988

      102,025

      Total revenue

      90,283

      8,754

      99,037

      2,988

      102,025

      Operating profit

      17,726

      2,696

      20,422

      39

      20,461

      Financial income

      -

      -

      -

      -

      1,871

      Financial costs

      -

      -

      -

      -

      231

      Profit before tax

      -

      -

      -

      -

      22,101

      *"Others" category is not included into reportable segments. "Others" includes micro switches and instruments for connectors.

  6. Paid-in capital and other equity

    Previous Interim Consolidated Accounting Period (From April 1, 2024 to September 30, 2024)

    The Company cancelled 556,469 shares of treasury stock on June 6, 2025, based on the resolution of the Board of Directors meeting held on May 30, 2024. As a result, treasury stock decreased by 8,274 million yen during the current interim consolidated accounting period, resulting in 27,463 million yen in treasury stock at the end of the current interim consolidated accounting period.

    The amount of the above retirement was reduced from other capital surplus in "Capital surplus," while the amount exceeding other capital surplus was reduced from "Retained earnings.

    Current Interim Consolidated Accounting Period (From April 1, 2025 to September 30, 2025)

    The Company acquired 346,700 shares of treasury stock, based on the resolution of the Board of Directors meeting held on August 4, 2025. As a result, treasury stock increased by 6,587 million yen during the current interim consolidated accounting period, bringing the total amount of treasury stock to 34,030 million yen as of the end of the period.

    The amount of the above retirement was reduced from other capital surplus in "Capital surplus," while the amount exceeding other capital surplus was reduced from "Retained earnings.

  7. Dividends

    1. Dividends paid

      For the six months ended September 30, 2024 (From April 1, 2024 to September 30, 2024)

      Total amount of dividends

      (Yen in millions)

      Resource of dividends

      Dividends per share (Yen)

      Record date

      Effective date

      June 21, 2024

      Ordinary General Meeting of Shareholders

      7,445

      Retained earnings

      220.00

      March 31,

      2024

      June 24, 2024

      Notes: Total amount of dividends by the resolution of the board of directors held on June 21, 2024, includes dividends, JPY 2 million corresponding to the Company's shares owned by the Board Incentive Plan trust in which beneficiaries include directors and executive officers.

      For the six months ended September 30, 2025 (From April 1, 2025 to September 30, 2025)

      Total amount of dividends

      (Yen in millions)

      Resource of dividends

      Dividends per share (Yen)

      Record date

      Effective date

      June 24, 2025

      Ordinary General Meeting of Shareholders

      8,310

      Retained earnings

      245.00

      March 31,

      2025

      June 25, 2025

      Notes: Total amount of dividends by the resolution of the board of directors held on June 24, 2025, includes dividends, JPY 21 million corresponding to the Company's shares owned by the Board Incentive Plan trust in which beneficiaries include directors and executive officers.

    2. The dividend whose record date falls in six months ended September 30, 2024, and the effective date falls in the next period

      For the six months ended September 30, 2024 (From April 1, 2024 to September 30, 2024)

      Total amount of dividends

      (Yen in millions)

      Resource of dividends

      Dividends per share (Yen)

      Record date

      Effective date

      November 1, 2024 Ordinary General Meeting of Shareholders

      8,309

      Retained earnings

      245.00

      September 30,

      2024

      December 2,

      2024

      Notes: The total amount of dividends resolved by the Board of Directors on November 1, 2024, includes JPY 19 million of dividends for the Company's shares held by the Trust for Delivery of Company Shares to Directors and Executive Officers and the Trust for Delivery of Company Shares to Employees, which were established by the Company.

      For the six months ended September 30, 2025 (From April 1, 2025 to September 30, 2025)

      Total amount of dividends

      (Yen in millions)

      Resource of dividends

      Dividends per share (Yen)

      Record date

      Effective date

      November 4, 2025 Ordinary General Meeting of Shareholders

      8,225

      Retained earnings

      245.00

      September 30,

      2025

      December 1,

      2025

      Notes: The total amount of dividends resolved by the Board of Directors on November 4, 2025, includes JPY 20 million of dividends for the Company's shares held by the Trust for Delivery of Company Shares to Directors and Executive Officers and the Trust for Delivery of Company Shares to Employees, which were established by the Company.

  8. Breakdown of Revenue

    The organization of our group is composed based on the types of connectors and the location of our customers. Based on this classification, the board of directors decides the allocation of resources and evaluates business performance.

    The relationship between the sales revenue analyzed by the customer's location and the sales revenue in each reportable segment is as below.

    For the cumulative second quarter of the fiscal year ending March 31, 2025 (from April 1, 2024 to September 30, 2024)

    (Yen in millions)

    Reportable Segments

    Others

    Total

    Multi-pin connectors

    Coaxial connectors

    Customer location

    Japan

    13,277

    772

    448

    14,497

    China

    36,098

    2,168

    135

    38,401

    Korea

    13,986

    892

    1,816

    16,694

    Others

    22,224

    2,493

    210

    24,927

    Total

    85,585

    6,325

    2,609

    94,519

    For the cumulative second quarter of the fiscal year ending March 31, 2026 (from April 1, 2025 to September 30, 2025)

    (Yen in millions)

    Reportable Segments

    Others

    Total

    Multi-pin connectors

    Coaxial connectors

    Customer location

    Japan

    15,038

    870

    922

    16,830

    China

    35,083

    3,590

    65

    38,738

    Korea

    15,348

    629

    1,748

    17,725

    Others

    24,814

    3,665

    253

    28,732

    Total

    90,283

    8,754

    2,988

    102,025

    In Japan, we sell circular and rectangular connectors, connectors for printed circuit boards and connectors for automotive, and major customers are mainly in general industrial and automotive market.

    In China, our main products are connectors for printed circuit boards and coaxial connectors, and the main customers are smartphone and consumer manufacturers.

    In Korea, our main products are connectors for printed circuit boards, rectangular connectors, automotive connectors, coaxial connectors and other electronic equipment. The main customers are in smartphone, consumer and automotive markets.

    Regarding other area, we sell various connectors including connectors for printed circuit boards to the customers located in Europe, North America and other Asian countries.

  9. Earnings per Share

    For the six months ended September 30, 2024

    (From Apr 1, 2024 to Sep 30, 2024)

    For the six months ended September 30, 2025

    (From Apr 1, 2025 to Sep 30, 2025)

    The basis of calculation for earnings per share -basic

    Profit attributable to owners of parent

    (Yen in millions)

    17,531

    (Yen in millions)

    15,523

    (Yen in millions)

    (Yen in millions)

    Profit used for calculation of basic earnings per share

    17,531

    15,523

    Weighted average shares during the period

    (Thousand Shares)

    33,833

    (Thousand Shares)

    33,792

    Earnings per share - basic

    (Yen)

    518.17

    (Yen)

    459.37

    The basis of calculation for earnings per share -diluted

    Profit used for the calculation of basic earnings per share

    (Yen in millions)

    17,531

    (Yen in millions)

    15,523

    Profit used for the calculation of diluted earnings per share

    (Yen in millions)

    17,531

    (Yen in millions)

    15,523

    Weighted average shares during the period

    (Thousand Shares)

    33,833

    (Thousand Shares)

    33,792

    Number of shares increased by stock acquisition right

    (Thousand Shares)

    -

    (Thousand Shares)

    -

    Weighted average shares-Diluted

    (Thousand Shares)

    33,833

    (Thousand Shares)

    33,792

    Diluted earnings per share

    (Yen)

    518.17

    (Yen)

    459.37

    Note: In the calculation of basic earnings per share and diluted earnings per share, the Company's shares held by the Trust for Directors and Executive Officers and the Trust for Employee Stock Issuance are treated as treasury stock, and the number of such shares is deducted from the average number of common shares outstanding during the period.

  10. Fair Values of Financial Instruments

    1. Method of measuring fair values

      (Cash and cash equivalents, trade and other receivables, trade and other payables)

      Since these subjects are settled in a short term, book value is rational approximate value of fair values.

      (Other financial assets, other financial liabilities)

      In other financial assets, time deposits which term exceed three months are usually settled within a year, and the book value is rational approximate value of fair values. However, long-term deposits include deposits encompassing derivatives, and the fair values of these deposits encompassing derivatives are obtained from financial institutions.

      If there is an active market, the equity instruments are measured using published market price. If there is no active market, it is mainly measured by using valuation techniques such as the market approach, income approach, or net asset approach. Regarding debt instruments, if there is an active market, it is measured using published market price. If there is no active market, it is measured using observable postulate including credit rating or discount rate.

      Derivatives are assessed based on forward exchange rate, etc.

      Among other financial liabilities, short-term borrowings and similar items are due within a relatively short period, and therefore their book values are considered to approximate fair value reasonably.

    2. Financial instruments measured by amortized cost

      The fair values of financial instruments measured by amortized cost are as below.

      Financial instruments which book value is a rational approximate value of fair value are not included below table.

      (Yen in millions)

      As of March 31, 2025

      As of September 30, 2025

      Book Value

      Fair Value

      Book Value

      Fair Value

      Other Financial Assets

      Long-term deposit Debt Instruments

      1,000

      16,434

      972

      16,613

      1,000

      20,728

      970

      21,061

    3. Financial instruments measured at fair value

      ① The fair value hierarchy

      Financial instruments measured at fair values are classified into 3 levels.

      Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets

      Level 2: Fair values calculated using observable value directory or indirectly except for Level 1. Level 3: Fair values calculated by measurement including unobservable inputs.

      The levels of the fair value of financial instruments measured at fair value are as follows.

      In the fiscal year ended March 31, 2025 (As of September 30, 2024)

      (Yen in millions)

      Level 1

      Level 2

      Level 3

      Total

      Other financial assets

      Financial assets measured at fair value through profit or loss

      Debt instruments Derivatives

      Financial assets measured at fair value through other comprehensive income

      Debt instruments Equity instruments

      -

      20,992

      -

      20,992

      -

      9

      -

      9

      22,551

      -

      -

      22,551

      16,003

      -

      602

      16,605

      Total of assets

      38,554

      21,001

      602

      60,157

      Other financial liabilities

      Financial liabilities measured at fair value through profit or loss

      Derivatives

      -

      44

      -

      44

      Total of liabilities

      -

      44

      -

      44

      In the fiscal year ending March 31, 2026 (As of September 30, 2025)

      (Yen in millions)

      Level 1

      Level 2

      Level 3

      Total

      Other financial assets

      Financial assets measured at fair value through profit or loss

      Debt instruments Derivatives

      Financial assets measured at fair value through other comprehensive income

      Debt instruments Equity instruments

      -

      20,836

      -

      20,836

      -

      1

      -

      1

      23,484

      -

      -

      23,484

      16,791

      -

      602

      17,393

      Total of assets

      40,275

      20,837

      602

      61,714

      Other financial liabilities

      Financial liabilities measured at fair value through profit or loss

      Derivatives

      -

      11

      -

      11

      Total of liabilities

      -

      11

      -

      11

      Transfer between levels of the fair value hierarchy is recognized on the day when the event or change in circumstances that the transfer occurred. There was no transfer between level 1 and level 2 for the year ended March 31, 2025, and for the six months ended September 30, 2025.

      ② Information on fair value measurement classified into level 2 and level 3

      Debt instruments classified into level 2 of the fair value hierarchy are measured using observable postulate including credit rating or discount rate in the market. Derivatives are assessed based on the forward exchange rate.

      The fair value of equity instruments classified as Level 3 are measured using valuation techniques such as the market approach, income approach, or net asset approach, and significant changes in fair value when unobservable inputs are replaced with reasonably possible alternative assumptions are not expected to occur.

      Financial instruments classified into Level 3 are measured based on accounting policies of Hirose group and the result of the measurement is approved by a responsible person of administration group.

      There are no significant changes in financial assets classified as Level 3 for the cumulative second quarter of the fiscal 2024 and 2025.

  11. Significant subsequent events Not applicable.

【2】Others

The interim dividend of the fiscal year ending March 2026 was resolved at the board of director's meeting held on November 4, 2025, as follows.

  1. Total amount of dividends JPY 8,225 million

  2. Amount per share JPY 245.00

  3. Effective date of payment request and payment start date December 1, 2025

(English translation)

This is the statement translated into English from the Japanese original of "Interim Financial Report for the First Half of the Year Ending March 31, 2026." In the event of any discrepancy between this English translation and the Japanese original, the later shall prevail.