Sumitomo Osaka Cement (5232) Q1 2027 earnings summary

Executive summary

• Operating profit nearly doubled year-over-year to ¥3.46bn, driven by domestic cement price hikes and growth in high-performance products, despite weak demand and higher energy costs.

• Net sales rose 8.8% year-over-year to ¥56.1bn, with profit attributable to owners of the parent up 48.3% to ¥2.2bn.

• High-Performance Products revenue increased, but profit declined due to one-time relocation, higher depreciation, and development expenses.

• The company implemented a new medium-term management plan focused on business portfolio transformation and established a new High-Performance Products segment.

Financial highlights

• Net sales for 1Q FY2026: ¥56.1bn, up 8.8% YoY; operating profit: ¥3.46bn, up 99.1% YoY.

• Ordinary profit: ¥3.59bn, up 87.0% YoY; profit attributable to owners: ¥2.2bn, up 48.3% YoY.

• Operating profit margin improved from 3.4% to 6.2% YoY.

• Gross profit increased from ¥11.79bn to ¥15.10bn YoY.

• Basic earnings per share for the quarter were 69.28 yen, up from 45.14 yen a year earlier.

Outlook and guidance

• FY2026 full-year net sales forecast: ¥234.5bn (+4.9% YoY); operating profit: ¥15bn (+9.9% YoY).

• Full-year profit attributable to owners of the parent is projected at ¥10bn, down 10.8% YoY.

• Cement business profit expected to decline due to lower volumes and higher costs; High-Performance Products profit to rise on semiconductor demand recovery.

• ROE forecast at 5.0%, ROIC at 3.5%; total return ratio target 38% for FY2026, aiming for 50% average in FY26-28.

• Dividend per share forecast: 60 yen, with a planned 3-for-1 stock split in October 2026 and revised minimum annual dividend per share to 40.00 yen post-split.