Sumitomo Chemical Company (4005) Q2 2026 earnings summary

Executive summary

• Core operating income and net income attributable to owners rose sharply year-over-year, driven by strong Sumitomo Pharma sales, a sales milestone for Orgovyx, improved trade terms in Essential & Green Materials, and a partial divestiture of the Asian business.

• Compared to the previous forecast, both core operating income and net profit increased due to strong pharma sales, favorable forex, and reduced tax expenses.

• Sales revenue for Q2 FY2025 was ¥1,095.4 billion, down 11.8% year-over-year, but core operating income surged 268.8% to ¥108.7 billion, and net income attributable to owners of the parent improved to ¥39.7 billion from a loss in Q2 FY2024.

• Interim dividend set at ¥6 per share; full-year dividend forecast raised to ¥12 per share.

Financial highlights

• Sales revenue for Q2 FY2025 was ¥1,095.4 billion, down 11.8% year-over-year.

• Core operating income surged to ¥108.7 billion from ¥29.5 billion, a 268.8% increase.

• Net income attributable to owners of the parent was ¥39.7 billion, up from a loss of ¥6.5 billion.

• Operating income was ¥103.7 billion, down ¥17.6 billion year-over-year due to the absence of a prior-year non-recurring gain.

• Free cash flow for Q2 FY2025 was ¥41.0 billion, down from ¥138.0 billion in Q2 FY2024.

Outlook and guidance

• Full-year FY2025 sales revenue forecast revised down to ¥2,290.0 billion (down 2.1% from previous forecast), but core operating income raised to ¥185.0 billion (up 23.3%), and net income attributable to owners of the parent to ¥45.0 billion (up 12.5%).

• Earnings per share forecast increased to ¥27.50.

• Annual dividend forecast maintained at ¥12.00 per share.

• Strong North American pharma sales and improved profitability in Essential & Green Materials expected to offset lower sales in ICT & Mobility Solutions.