Sumitomo Chemical Company (4005) Q1 2027 earnings summary

Executive summary

• Core operating income rose to ¥62.3 billion in Q1 FY2026, up from ¥27.7 billion year-on-year, marking the second-best Q1 on record after FY2022.

• Net income attributable to owners was ¥40.8 billion, a sharp turnaround from a ¥4.5 billion loss in Q1 FY2025, driven by improved profitability across key segments.

• All business segments reported increased sales revenue, with significant contributions from Essential & Green Materials, Agro & Life Solutions, and ICT & Mobility Solutions.

• Essential & Green Materials drove core operating income, aided by improved profit margins and temporary inventory valuation gains.

• ICT & Mobility Solutions benefited from higher semiconductor material shipments despite weaker display-related sales.

Financial highlights

• Consolidated sales revenue reached ¥578.2 billion, up 9.9% or ¥52.1 billion year-on-year.

• Operating income was ¥61.0 billion, up ¥35.6 billion or 139.8% year-on-year.

• Gross profit increased to ¥194.2 billion from ¥163.7 billion year-on-year.

• Free cash flow was negative ¥44.3 billion, a deterioration of ¥22.3 billion year-on-year.

• ROE improved to 3.9% from -0.5% year-on-year.

Outlook and guidance

• First-half FY2026 forecasts: core operating income of ¥125.0 billion and net income of ¥70.0 billion, both expected to double year-on-year.

• Sales revenue for the first half projected at ¥1,170.0 billion, up ¥74.6 billion year-on-year.

• Full-year FY2026 sales revenue forecast is ¥2,360.0 billion, with core operating income at ¥215.0 billion and net income at ¥70.0 billion.

• No revision to full-year forecast due to ongoing geopolitical uncertainties; reassessment planned at first-half results.

• Interim and annual dividend guidance maintained at ¥8.00 and ¥16.00 per share, respectively.