Mitsubishi Chemical Group (4188) Q1 2026 earnings summary

Executive summary

• Q1 FY2025 saw a generally weak business environment due to global economic uncertainty and U.S. tariffs, but display-related and semiconductor businesses remained strong, aided by Chinese subsidies.

• Core operating income for chemicals was JPY 11.6 billion, down 28% year-over-year, mainly due to price gap deterioration, lower MMA monomer prices, and inventory valuation losses.

• Net income attributable to owners fell 51% year-on-year, mainly due to the reclassification of the Pharma segment as discontinued operations.

• Sales revenue for Q1 FY2025 decreased 13.4% year-over-year to JPY 880.7 billion, with core operating income down 11.1% to JPY 56.6 billion and net income attributable to owners falling 50.5% to JPY 19.6 billion.

• Comprehensive income attributable to owners dropped to JPY 33.6 billion from JPY 118.2 billion year-over-year.

Financial highlights

• Sales revenue was JPY 880.7 billion, down JPY 136.3 billion or 13% year-on-year, with foreign exchange, sales prices, volume, and business restructuring all contributing to the decline.

• Core operating income was JPY 56.6 billion, down JPY 7 billion or 11% year-on-year and at 47% of the first-half forecast.

• Net income attributable to owners was JPY 19.6 billion, down 51% year-on-year.

• Free cash flow was JPY 24.4 billion, with net cash from operations at JPY 60.2 billion and investing outflows of JPY 35.8 billion.

• Basic earnings per share fell to JPY 13.96 from JPY 27.87 year-over-year.

Outlook and guidance

• Full-year and dividend forecasts remain unchanged, with annual dividend at JPY 32 per share.

• Proceeds from the transfer of Mitsubishi Tanabe Pharma are expected in Q2, improving the financial position.

• FY2025 sales revenue forecast is JPY 3,740.0 billion (down 5.3% year-on-year), with core operating income of JPY 265.0 billion (up 15.8%) and net income attributable to owners of JPY 145.0 billion (up 222.1%).

• Q2 is expected to see softer demand for display-related and automotive products, and profits are forecast to be weaker than Q1 in some segments.

• MMA and derivatives profits are expected to decrease in Q2 due to a weak market.