MARUWA’s ¥55 Interim Dividend: Stronger Profit, Weaker Cash Conversion

MARUWA Co., Ltd. (SGX: M12) reported an interim dividend of ¥55 per share for the six months ended 30 September 2026, up from ¥51 for the corresponding period a year earlier. Its October 27 results also show a sharp rise in profit. For dividend investors, the question is how much of that growth has turned into cash. [S1, p. 1]

The ¥55 amount was already in MARUWA’s earlier dividend forecast. The company has kept its forecast of another ¥55 per share at the fiscal year-end, making a forecast total of ¥110, compared with ¥102 for the previous fiscal year. The filing schedules commencement of interim dividend payments for 7 December 2026; it does not establish that any payment has occurred. [S1, p. 1] [S2, p. 1]

Profit grew faster than sales

Half-year sales rose from ¥33,115 million to ¥46,921 million. Operating profit increased from ¥10,843 million to ¥17,605 million, while profit attributable to owners of the parent climbed from ¥7,413 million to ¥12,119 million. The filing describes the sales and profit figures as record highs. MARUWA attributes much of the growth to demand for high-speed communications components, alongside a recovery in general-purpose memory demand and improvement in automotive demand. [S1, p. 1] [S1, p. 3]

The ceramic components business supplied most of the increase: its sales reached ¥41,879 million and segment profit reached ¥17,806 million. Lighting equipment also grew, with sales of ¥5,041 million and segment profit of ¥890 million. These segment profits are before the corporate expense and other adjustments that reconcile them to group operating profit. [S1, p. 3] [S1, p. 10]

Cash has not kept pace

Operating cash flow fell from ¥9,077 million to ¥6,686 million despite the rise in profit. The cash-flow statement shows a ¥4,920 million movement from increased trade receivables and a ¥5,993 million movement from increased inventories. These are cash tied up in sales awaiting collection and stock held by the business; their future reversal depends on collections and inventory use. [S1, p. 9]

Purchases of property, plant and equipment were a ¥8,984 million cash outflow, compared with ¥8,471 million a year earlier. Operating cash flow less those purchases was therefore negative ¥2,298 million, versus positive ¥606 million in the prior half-year. This is a focused measure of cash after equipment spending, not MARUWA’s reported net cash flow: the investing section also includes ¥2,497 million of subsidies received and other items. [S1, p. 9]

That spending fits the company’s account of expanding production capacity at its plants. Its cash and cash equivalents stood at ¥66,169 million at September 30, compared with ¥66,986 million at the start of the fiscal year. The cash balance provides context for the near-term payout, although it does not remove the need for future operating cash generation. [S1, p. 4] [S1, p. 9]

A higher earnings forecast, with the payout forecast intact

MARUWA raised its forecast for full-year sales to ¥101,500 million and operating profit to ¥38,300 million, from the ¥93,300 million and ¥33,700 million it forecast in July. It left the ¥110 full-year dividend forecast unchanged. The forecast is a company estimate, and the half-year figures are unaudited. [S1, p. 1] [S1, p. 2] [S2, p. 1]

The ¥55 interim dividend is supported by substantially stronger reported earnings and a sizeable cash balance. The caution is cash conversion: receivables, inventories and equipment spending consumed more cash than in the comparable half-year. The next results should show whether collections and inventory use catch up with profit while MARUWA continues its capacity investment. [S1, p. 1] [S1, p. 7] [S1, p. 9]