Sumitomo Chemical Company (4005) Q2 2027 earnings summary

Executive summary

• H1 FY2026 core operating income rose to ¥144.5B from ¥108.7B and attributable net income to ¥82.9B from ¥39.7B; both exceeded the August forecast, with results ranking second-highest on record.

• Higher equity-method income, semiconductor-material shipments, petrochemical improvement and temporary inventory valuation gains supported results.

Financial highlights

• Sales revenue was ¥1,172.8B, up ¥77.4B or 7.1% YoY; operating income was ¥138.1B, up ¥34.4B or 33.2%.

• Core operating income was ¥144.5B, up ¥35.8B; equity-method investment income was ¥36.7B versus a ¥27.3B loss YoY.

• Net income was ¥105.7B versus ¥90.9B; attributable net income was ¥82.9B versus ¥39.7B, up 108.8%.

• Income before taxes rose 38.7% to ¥121.9B; tax expense was ¥16.3B versus a ¥3.0B tax benefit in the prior-year period.

• Revenue gains from selling prices (+¥84B) and FX (+¥58.1B) were partly offset by volume (-¥64.7B); non-recurring items were a ¥6.5B loss.

Outlook and guidance

• FY2026 forecasts: revenue ¥2,490B, core operating income ¥270B, operating income ¥215B and attributable net income ¥90B; revisions were +¥130B, +¥55B, +¥38B and +¥20B, respectively.

• Excluding business-sale gains, core operating income is forecast at ~¥260B; forecast excludes the timing difference in the FY2025 partial Petro Rabigh share sale.

• FY2026 assumptions: USD/JPY 150 for H2 and 157 for the full year; naphtha ¥99,000/kL for the full year. ROE is forecast at 8.6%.

• Core operating income forecasts rose to ¥60B for ICT & Mobility, ¥75B for Essential & Green Materials and ¥108B for Sumitomo Pharma; Agro & Life Solutions was unchanged.

• Annual dividend guidance rose to ¥17/share, including ¥8 interim and ¥9 year-end; the prior ¥24/share record remains an objective subject to performance and uncertainty.