Sumitomo Seika Chemicals (4008) Q2 2027 earnings summary

Executive summary

• H1 FY2027 net sales rose 8.0% YoY to ¥78,487 million; operating profit fell 4.9% to ¥5,594 million, while parent-attributable profit increased 13.5% to ¥3,717 million.

• Weaker yen and price adjustments supported sales, while lower Super Absorbent Polymers (SAP) profit reflected higher fixed costs from new Singapore capacity and lower volume amid Middle East supply-chain disruption.

Financial highlights

• Gross profit was ¥17,052 million versus ¥16,236 million YoY; SG&A rose to ¥11,458 million from ¥10,355 million.

• Ordinary profit declined 13.2% to ¥4,842 million; comprehensive income increased to ¥5,083 million from ¥4,272 million.

• Total assets rose to ¥159,565 million from ¥152,732 million at FY2026 year-end; net assets increased to ¥106,185 million from ¥103,621 million.

• Operating cash flow was an outflow of ¥8,577 million versus an inflow of ¥6,882 million; investing cash outflow was ¥4,634 million and financing cash inflow was ¥7,453 million.

Outlook and guidance

• FY2027 forecasts remain unchanged: net sales ¥165,000 million, operating profit ¥11,000 million, ordinary profit ¥11,200 million, and parent-attributable profit ¥8,000 million.

• Forecast EPS is ¥124.37; full-year ROE is 7.6% and ROIC 6.1%, versus FY2026 results of 7.8% and 8.1%, respectively.

• Forecast assumptions include full-year rates of ¥158.50/$ and ¥23.50/CNY, and naphtha at ¥99,000/KL; Q3-Q4 assumptions are ¥157.50/$ and ¥91,000/KL naphtha.

• FY2027 segment forecasts: SAP sales ¥131,200 million and operating profit ¥7,700 million; Functional Materials sales ¥33,500 million and operating profit ¥3,200 million.