Toray Industries (3402) Q3 2026 earnings summary

Executive summary

• Revenue for the nine months ended December 31, 2025, decreased 0.2% year-over-year to ¥1,919.5 billion, with core operating income down 3.4% to ¥105.1 billion and profit attributable to owners of parent falling 46.6% to ¥40.2 billion, mainly due to a significant impairment loss in the battery separator film business at a Korean subsidiary.

• The Japanese economy showed gradual recovery, but global uncertainties, including U.S. policy shifts, sluggish goods flow, and a mixed global economic environment, impacted performance.

• Full-year core operating income is forecast to rise 5.1% year-over-year to ¥150.0 billion, with revenue projected at ¥2,600.0 billion (+1.4%), and dividend per share expected to increase to ¥20.00.

• Share buybacks totaling ¥29 billion (28 million shares) were executed as of January 2026.

• Profit was sharply impacted by impairment losses and other special items, including a warehouse fire.

Financial highlights

• Special items worsened by ¥29.1 billion to negative ¥34.1 billion, mainly due to a ¥25 billion impairment loss in the battery separator film business.

• Total assets rose to ¥3,515.1 billion, with liabilities increasing to ¥1,630.5 billion, driven by yen depreciation and higher borrowings.

• Equity ratio declined to 50.1% from 51.9%, and D/E ratio increased to 0.56.

• Free cash flow was positive at ¥14.1 billion, but down sharply from the previous year.

• Capital expenditures fell to ¥102.7 billion, while R&D spending rose to ¥54.4 billion.

Outlook and guidance

• Full-year revenue and core operating income are expected to increase, driven by sales expansion in Fibers & Textiles and Environment & Engineering, as well as strategic pricing and profitability projects.

• The assumed exchange rate for forecasts is ¥155 per U.S. dollar.

• Dividend per share is forecast at ¥20.00, with a payout ratio of 37%.

• Global and Japanese economies are expected to continue gradual recovery, but risks from U.S. trade policy, geopolitical tensions, and Chinese economic stagnation remain.