Mitsui Chemicals (4183) Q1 2027 earnings summary

Executive summary

• Operating income before special items rose to 50.1 billion yen in 1Q FY2026, up 88.4% YoY, driven by specialty chemicals growth, business restructuring, yen depreciation, and inventory valuation gains from higher naphtha prices, despite a 5 billion yen negative impact from the Middle East conflict.

• Sales revenue for 1Q FY2026 increased 10.8% YoY to 460.0 billion yen, supported by higher selling prices and favorable exchange rates.

• Net income attributable to owners surged to 32.1 billion yen, up from 0.7 billion yen a year earlier, reflecting a 4,302.3% increase.

• Specialty chemicals domains saw a 10% YoY increase in operating income before special items, reaching 32.7 billion yen, with strong sales in Life & Healthcare and ICT Solutions.

• Basic & Green Materials (B&GM) operating income before special items surged by 22.7 billion yen YoY to 19.8 billion yen, mainly due to restructuring and inventory gains.

Financial highlights

• 1Q FY2026 sales revenue was 460.0 billion yen, up 11% YoY; operating income before special items was 50.1 billion yen (+88% YoY); net income attributable to owners was 32.1 billion yen (+31.4 billion yen YoY).

• Gross profit increased to 116.5 billion yen from 93.7 billion yen YoY.

• Cash and cash equivalents at quarter-end increased to 217.8 billion yen.

• Cash flows from operating activities decreased to 14.0 billion yen, down 31.4 billion yen YoY, due to increased working capital needs.

• Non-recurring items improved by 12.1 billion yen YoY, mainly due to lower impairment losses.

Outlook and guidance

• 1H FY2026 operating income before special items is forecast at 76.0 billion yen (+31.5 billion yen YoY), with sales revenue expected at 957.0 billion yen (+18% YoY).

• Net income attributable to owners of the parent for 1H FY2026 is forecast at 34.0 billion yen.

• Segment forecasts for 1H FY2026: Life & Healthcare Solutions 125.0 billion yen, Mobility Solutions 295.0 billion yen, ICT Solutions 160.0 billion yen, Basic & Green Materials 370.0 billion yen.

• The Middle East conflict is expected to have a negative impact of about 6 billion yen in 1H FY2026.

• Cash flows from operating activities for 1H FY2026 are expected to decline to 94.0 billion yen, with a significant outflow from investing activities due to the Ultradent Products, Inc. acquisition.