Nippon Chemical Industrial (4092) Q4 2025 earnings summary

Executive summary

• Net sales for FY2025 rose 0.8% year-over-year to ¥38.8 billion, with operating profit up 47.6% to ¥3.3 billion, driven by price adjustments, revenue enhancement, and reduced inventory valuation losses.

• Profit attributable to owners of parent increased 60.9% to ¥2.56 billion, while comprehensive income declined 33.7% to ¥2.26 billion.

• All business segments saw profit growth, with inorganic chemicals and specialty chemicals showing notable operating profit increases.

• The company anticipates a challenging FY2026, forecasting flat sales but a 58.1% drop in operating profit due to rising costs and absence of prior one-off gains.

• Dividend policy was strengthened, with FY2025 payout at ¥92/share and FY2026 forecast at ¥106/share, targeting a 40% payout ratio or DOE of 2%.

Financial highlights

• FY2025 net sales: ¥38.8 billion (+0.8% YoY); operating profit: ¥3.3 billion (+47.6% YoY); net profit: ¥2.56 billion (+60.9% YoY); EBITDA: ¥6.92 billion (+16.4% YoY); ROE: 5.6%.

• Gross profit increased from ¥7,316 million to ¥8,753 million year-over-year.

• Capital expenditures increased 20.7% to ¥4.97 billion; R&D expenses rose 10.1% to ¥1.60 billion.

• Equity ratio improved to 61.8% from 58.9%.

• Free cash flow decreased to ¥585 million due to higher investment cash outflows.

Outlook and guidance

• FY2026 forecast: net sales ¥39.0 billion (+0.4% YoY), operating profit ¥1.4 billion (–58.1% YoY), net profit ¥1.1 billion (–57.0% YoY), ROE 2.4%, and basic EPS ¥125.92.

• Operating profit expected to decline due to higher labor and raw material costs, and normalization of inventory valuation.

• U.S. tariff impacts not included in forecasts.

• Dividend policy maintained with higher payout despite profit decline.