Asahi Kasei (3407) Q2 2027 earnings summary

Executive summary

• H1 FY2026 net sales rose 13.7% YoY to ¥1,689,609m; operating income increased 54.0% to ¥165,441m and parent-attributable net income rose 54.2% to ¥102,198m.

• FY2026 forecasts were revised to net sales of ¥3,422,000m, operating income of ¥290,000m and parent-attributable net income of ¥173,000m.

Financial highlights

• H1 operating margin was 9.8%; EBITDA was ¥272.6bn with a 16.1% margin.

• H1 operating income before goodwill amortization rose 49.0% to ¥184.5bn; EPS before goodwill amortization increased 48.2% to ¥90.09.

• Basic EPS was ¥75.94 versus ¥48.79 a year earlier; ordinary income was ¥161,380m, up 52.1%.

• Operating income growth included ¥30.7bn from three First Priority businesses; Material also benefited from inventory valuation and improved pricing.

• Operating cash flow fell to ¥94,951m from ¥134,771m; inventories increased ¥110,960m during H1.

Outlook and guidance

• FY2026 forecasts: net sales ¥3,422,000m (+11.3%), operating income ¥290,000m (+25.4%), ordinary income ¥283,000m (+22.8%) and parent-attributable net income ¥173,000m (+8.9%).

• Forecast operating income before goodwill amortization is ¥328.0bn; EBITDA ¥509.0bn and EPS ¥129.12.

• Guidance implies H2 operating income of ¥124.6bn, down ¥40.9bn from H1, reflecting seasonality, higher pharmaceutical R&D and launch costs, and ~¥20bn negative inventory valuation impact.

• FY2026 inventory valuation benefit in Material is expected to be limited to ~¥10bn YoY as petrochemical market prices decline in H2.