Mitsubishi Chemical Group (4188) Q2 2026 earnings summary

Executive summary

• Core operating income for H1 FY2025 exceeded initial forecasts, led by Specialty Materials and Industrial Gases, despite ongoing market weakness in MMA and basic materials and uncertainty from U.S. tariffs.

• Net income attributable to owners surged 169% year-on-year to ¥110.1 billion, mainly due to proceeds from the sale of Mitsubishi Tanabe Pharma.

• Structural reforms and asset optimization progressed, with significant cost reductions and portfolio transformation nearing the JPY 400 billion sales revenue target.

• Core operating income declined year-on-year due to lower MMA prices and inventory valuation losses, but was above forecasts.

• The transfer of Mitsubishi Tanabe Pharma and affiliates was completed, with results now classified as discontinued operations.

Financial highlights

• H1 FY2025 sales revenue was ¥1,799.1 billion, down 10% year-on-year; core operating income was ¥126.1 billion, down 2.6% but exceeded forecasts.

• Net income attributable to owners was ¥110.1 billion, up ¥69.2 billion year-on-year, with total comprehensive income at ¥194.6 billion.

• Operating profit was ¥86.5 billion; profit before tax was ¥68.7 billion.

• Free cash flow reached ¥335.6 billion, supported by asset sales and reduced net interest-bearing debt.

• Cash and cash equivalents rose to ¥373.9 billion, with net cash from investing activities boosted by the MTPC sale.

Outlook and guidance

• FY2025 sales revenue forecast is ¥3,672 billion, down 1.8% from previous guidance; core operating income forecast revised to ¥250 billion, down 5.7%.

• Net income forecast revised from ¥145 billion to ¥125 billion due to accelerated structural reform expenses.

• Annual dividend forecast maintained at ¥32 per share.

• Demand for Specialty Materials expected to remain firm, while MMA and Basic Materials & Polymers markets are expected to stay sluggish.