Zeon (4205) Q2 2026 earnings summary

Executive summary

• H1 FY2025 net sales were ¥206.5 billion, down 3.2% year-over-year, with operating income up 15.2% to ¥19.4 billion and net income up 81.3% to ¥22.3 billion, driven by gains on sale of investment securities, cost reductions, and strong specialty materials shipments.

• Q2 FY2025 net sales were flat sequentially at ¥103.4 billion, but operating income fell 40% QoQ to ¥7.2 billion due to shipment deferrals and lower elastomer volumes.

• The business environment remained unpredictable due to global economic uncertainties, U.S. trade policy effects, and volatile financial markets.

• Cost reductions and production reforms were emphasized, with a focus on profitability and global expansion in the Elastomer Business and high-value product development in Specialty Materials.

Financial highlights

• H1 FY2025 operating income rose to ¥19.4 billion (+15.2% YoY), with net income at ¥22.3 billion (+81.3% YoY), supported by extraordinary gains and cost controls.

• Q2 FY2025 net income surged 97% QoQ to ¥14.8 billion, mainly from investment securities sales.

• H1 FY2025 consolidated net sales by segment: Specialty Materials ¥62.3 billion (+1% YoY), Elastomer Business ¥112.5 billion (-7% YoY), Other Businesses ¥32.9 billion (-¥822 million YoY).

• Operating income by segment: Specialty Materials ¥11.7 billion (+9% YoY), Elastomer Business ¥6.5 billion (+8% YoY), Other Businesses ¥2.0 billion (+¥482 million YoY).

• Basic earnings per share for the interim period was ¥113.76, up from ¥58.47 year-over-year.

Outlook and guidance

• FY2025 full-year forecast: net sales ¥415.0 billion (-1.3% YoY), operating income ¥30.5 billion (+4% YoY), net income ¥28.0 billion (+6.9% YoY), EPS ¥144.17.

• Segment forecasts revised: Specialty Materials net sales up, operating income down; Elastomer net sales down, operating income up.

• H2 outlook includes a ¥1.0 billion loss from alternative fuel use due to supply issues, with mitigation measures under review.

• No revisions to previously announced earnings or dividend forecasts; annual dividend forecast unchanged at ¥72/share.

• Treasury stock buyback up to 10 million shares/¥10 billion underway.