Shin-Etsu Chemical (4063) Q2 2026 earnings summary

Executive summary

• Net sales for the first half ended September 30, 2025, rose 1.4% year-over-year to ¥1,284.5 billion, while operating income declined 17.7% to ¥333.9 billion and net income attributable to owners of parent fell 12.3% to ¥257.8 billion.

• The company achieved 53% of its full-year operating income forecast and 55% of its net income forecast in the first half, maintaining its full-year guidance.

• The global economic environment was volatile, with U.S. policy shifts and new Chinese export controls impacting market conditions.

Financial highlights

• Gross profit decreased to ¥455.7 billion from ¥519.0 billion year-over-year.

• Operating margin dropped to 26.0% from 32.0% year-over-year; ROIC and ROE also declined to 15.9% and 11.6%, respectively.

• Cash flows from operating activities increased to ¥451.9 billion, while cash flows from investing and financing activities were negative at ¥-300.7 billion and ¥-303.3 billion, respectively.

• Net assets per share decreased to ¥2,251 from ¥2,375 at the end of March 2025.

Outlook and guidance

• Full-year net sales are forecast at ¥2,400.0 billion (down 6% year-over-year), with operating income at ¥635.0 billion (down 14%) and net income at ¥470.0 billion (down 12%).

• Annual dividend is projected at ¥106 per share, unchanged from the previous year.