Nippon Soda (4041) Q2 2027 earnings summary

Executive summary

• H1 FY2027 net sales rose 4.2% YoY to ¥69.91bn and operating profit increased 11.0% to ¥7.83bn; parent-attributable profit rose 1.2% to ¥6.87bn.

• Chemical Materials and Trading & Logistics drove growth, while Agri Business sales and profit declined amid weaker export demand and lower inventory valuation gains.

Financial highlights

• Ordinary profit rose 12.7% to ¥10.98bn; equity-method profit increased 36.0% to ¥3.15bn. EPS was ¥128.3, up 3.4% YoY.

• Average H1 exchange rates were ¥159.2/USD and ¥184.7/EUR, versus ¥145.8/USD and ¥169.2/EUR a year earlier.

• Operating cash flow was ¥8.97bn versus ¥12.61bn; investing and financing cash flow were -¥5.39bn and -¥2.71bn. Free cash flow was ¥3.58bn versus ¥5.63bn, and period-end cash was ¥22.88bn.

Outlook and guidance

• FY2027 forecast revised to net sales of ¥160.00bn, operating profit of ¥16.30bn, ordinary profit of ¥21.70bn and parent-attributable profit of ¥17.30bn.

• Revised forecast implies sales growth of 5.1% and operating-profit growth of 14.8% versus the prior forecast; EPS is ¥323.0 versus ¥294.8 previously.

• H2 assumptions are ¥158/USD and ¥175/EUR; Chemical Materials and Trading & Logistics sales and equity-method income are expected to increase.

• Segment forecasts: Chemical Materials sales ¥38.20bn / operating profit ¥7.70bn; Agri Business ¥53.50bn / ¥4.60bn; Trading & Logistics ¥48.80bn / ¥2.60bn; Engineering profit ¥1.50bn; Eco Solutions ¥0.50bn.

• Full-year equity-method profit forecast was raised to ¥5.50bn from ¥4.40bn.