Nippon Shokubai (4114) Q2 2026 earnings summary

Executive summary

• Revenue for the first half of FY2025 declined 3.2% year-over-year to ¥200.2 billion, mainly due to lower selling prices and a weaker US dollar, despite higher sales volumes.

• Operating profit dropped 13.8% year-over-year to ¥9.0 billion, impacted by inventory valuation losses and increased SG&A expenses.

• Profit attributable to owners of parent declined 14.7% year-over-year to ¥7.6 billion.

• Both materials and solutions businesses saw mixed performance, with materials segment income dropping sharply while solutions held steady.

• Impairment losses at an equity-method associate and higher SG&A expenses weighed on profitability.

Financial highlights

• Segment income fell to ¥9.6 billion (-21.2% YoY), and profit attributable to owners was ¥7.6 billion (-14.7% YoY).

• Gross profit for the period was ¥36,965 million, up slightly from ¥36,307 million year-over-year.

• Basic earnings per share fell to ¥50.43 from ¥58.03 year-over-year.

• Free cash flow dropped to ¥4.8 billion from ¥15.4 billion YoY, mainly due to increased investing activities.

• Cash and cash equivalents decreased by ¥8,713 million to ¥45,851 million at period end.

Outlook and guidance

• Full-year FY2025 revenue is forecast at ¥405.0 billion, flat from the previous forecast but down ¥4.3 billion YoY.

• Operating profit is expected at ¥18.0 billion, up ¥1.0 billion from the previous forecast but down ¥1.1 billion YoY.

• Profit attributable to owners of parent is forecast at ¥15.0 billion, unchanged from previous guidance.

• Solutions business is projected to grow, while materials will remain pressured by weak overseas markets and higher costs.

• Year-end dividend forecast is ¥50 per share, for an annual total of ¥100 per share.