Mitsubishi Materials (5711) investor relations material

Executive summary

• Strong demand in automotive sectors in China and Southeast Asia, with gradual recovery in Japan, US, and Europe; global economy showed moderate recovery, though some regions stalled due to U.S. policy and Middle East geopolitics.

• Semiconductor demand for Al-related applications remains robust, but other segments are weak; overall semiconductor-related demand remained sluggish except for AI-related products.

• Net sales declined 6.0% year-over-year to ¥1,844.1 billion, but operating profit surged 63.0% to ¥60.5 billion and ordinary profit rose 62.0% to ¥97.6 billion, driven by foreign exchange gains, higher equity-method earnings, and increased dividend income from mines.

• Profit attributable to owners of parent increased 19.1% year-over-year to ¥40.6 billion, despite impairment losses and the absence of prior-year equity gains.

• Major structural reforms include suspension of Onahama Smelter, acquisition of ReElement Technologies, and new plant launches.

Financial highlights

• FY2026 net sales: ¥1,844.0bn (down ¥118.0bn YoY); operating profit: ¥60.5bn (up ¥23.3bn YoY); ordinary profit: ¥97.5bn (up ¥37.3bn YoY); profit attributable to owners: ¥40.5bn (up ¥6.5bn YoY).

• Gross profit was ¥198.97 billion, up from ¥166.65 billion year-over-year.

• EPS rose to ¥310.56 from ¥260.82 year-over-year.

• Cash and cash equivalents at year-end increased to ¥121.7 billion, up ¥33.1 billion from the previous year.

• Shareholders’ equity ratio declined to 24.5% from 28.5% year-over-year.

Outlook and guidance

• FY2027 forecast: net sales ¥1,990.0bn (up ¥145.9bn YoY); operating profit ¥36.0bn (down ¥24.5bn YoY); ordinary profit ¥73.0bn (down ¥24.5bn YoY); profit attributable to owners ¥49.0bn (up ¥8.4bn YoY).

• Dividend per share is forecast to increase to ¥116 (from ¥100), with a target payout ratio of 30.9%.

• FY2027 expects higher sales from metal prices and copper premiums, but lower profits due to inventory valuation and extended furnace shutdowns.

• ROIC projected to rise to 6.7% (up 0.6 p.p. YoY); profit growth driven by absence of prior year extraordinary losses.

• Dividend forecast for FY2027: ¥116/share (up ¥16 YoY).