Asahi Kasei (3407) Q1 2026 earnings summary

Executive summary

• Q1 2025 net sales rose 0.3% year-over-year to ¥738.3 billion, with operating income up 7.6% to ¥53.7 billion, but net income dropped 42.2% to ¥19.7 billion due to losses from discontinuation of the MMA business in Material.

• H1 2025 forecasts were revised upward for both operating and net income, driven by strong performance in Pharmaceuticals & Life Science, despite a year-over-year decline in operating income.

• Dividends for FY 2025 are forecasted to increase by ¥2 to ¥40 per share, reflecting a progressive dividend policy.

• Ordinary income declined 7.0% to ¥49,957 million; comprehensive income was negative ¥7,386 million, compared to ¥122,838 million in Q1 2024.

Financial highlights

• Q1 2025 operating income before goodwill amortization increased 6.7% year-over-year to ¥61.7 billion; EBITDA rose 7.2% to ¥100.9 billion.

• Operating margin improved to 7.3% from 6.8% in Q1 2024; EBITDA margin increased to 13.7%.

• Extraordinary losses surged to ¥36,429 million in Q1 2025, mainly from business structure improvement expenses and loss on cancellation of power contract.

• Total assets decreased by ¥51.5 billion, mainly due to a stronger yen and business divestitures; assets at June 2025 were ¥3,963,757 million.

• Net assets decreased to ¥1,877,998 million from ¥1,913,944 million at March 2025.

Outlook and guidance

• H1 2025 net sales are projected at ¥1,504.0 billion (+0.9% year-over-year), with operating income at ¥105.0 billion (-3.6%) and net income at ¥61.0 billion (+1.2%).

• Fiscal 2025 net sales forecast at ¥3,117,000 million, up 2.6% year-over-year; operating income projected at ¥215,000 million, up 1.5%; net income forecast at ¥125,000 million, down 7.4%.

• Upward revision in operating income forecast (+¥10.0 billion vs. May) due to strong Pharmaceuticals & Life Science and cost controls in Material.

• Interim dividend forecast is ¥20 per share, unchanged from previous guidance.