Sanyo Chemical Industries (4471) Q4 2026 earnings summary

Executive summary

• Net sales for FY2025 declined 10.1% year-over-year to ¥127.85 billion, mainly due to withdrawal from the superabsorbent polymer business and intensified competition from low-cost Chinese products.

• Operating profit rose 18.6% to ¥10.00 billion, and ordinary profit increased 26.7% to ¥12.25 billion, driven by improved profitability, supply chain efficiency, and strong semiconductor sector performance.

• Profit attributable to owners of parent surged 276.6% to ¥15.63 billion, mainly due to tax effects from deferred tax asset recognition after a subsidiary merger.

• Comprehensive income increased dramatically to ¥28.36 billion, up 39 times from the previous year.

Financial highlights

• Gross profit increased to ¥33.17 billion from ¥32.05 billion year-over-year, despite lower sales.

• Basic earnings per share jumped to ¥706.89 from ¥187.79 year-over-year.

• Total assets rose to ¥195.5 billion, with shareholders' equity at ¥132.6 billion and an equity ratio of 81.4%.

• Free cash flow increased to ¥14.5 billion, and cash and cash equivalents at year-end rose to ¥34.38 billion.

• ROE improved to 10.6%, and ROIC also reached 10.6%.

Outlook and guidance

• FY2026 net sales are forecast to rise 17.3% to ¥150.00 billion, with operating profit flat at ¥10.00 billion and profit attributable to owners of parent expected to decrease 42.4% to ¥9.00 billion.

• Ordinary profit is projected to decrease 6.2% to ¥11.50 billion, reflecting the absence of prior year tax and FX gains.

• Annual dividend forecast is ¥175 per share, with a revised shareholder return policy targeting a total return ratio of 40% or higher.

• Assumptions include a naphtha price of ¥115,000/kl and an exchange rate of ¥155/USD; potential Middle East risks are not factored in.