This article first appeared on GuruFocus .
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Sales Revenue:JPY1.7063 trillion, down JPY198.5 billion year-on-year.
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Core Operating Income:JPY186.8 billion, up JPY126.8 billion year-on-year.
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Operating Income:JPY180.4 billion, up JPY35 billion year-on-year.
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Net Income Attributable to Owners of the Parent:JPY87.4 billion, up JPY58.8 billion year-on-year.
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Finance Income:Loss of JPY36 billion, improvement of JPY69.3 billion year-on-year.
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Free Cash Flow:Positive JPY71.8 billion, a deterioration of JPY125.7 billion year-on-year.
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Interest-bearing Debt:JPY1.2215 trillion, down JPY64.6 billion from the previous fiscal year-end.
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D/E Ratio:Improved to 0.96x from 1.2x at the end of March 2025.
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Agro & Life Solutions Core Operating Income:JPY28.1 billion, up JPY8.6 billion year-on-year.
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ICT & Mobility Solutions Core Operating Income:JPY46.5 billion, down JPY13.2 billion year-on-year.
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Advanced Medical Solutions Core Operating Income:Gain of JPY300 million, down JPY900 million year-on-year.
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Essential & Green Materials Core Operating Income:JPY19.8 billion, improvement of JPY64.1 billion year-on-year.
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Sumitomo Pharma Core Operating Income:JPY111.2 billion, up by JPY86.9 billion year-on-year.
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Operating Cash Flow:Positive JPY111.6 billion, decreased by JPY29.1 billion year-on-year.
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Cash Flow from Investing Activities:Negative JPY39.8 billion, a decrease of JPY96.6 billion year-on-year.
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Cash Flow from Financing Activities:Negative JPY100.6 billion, a decrease of JPY41.1 billion year-on-year.
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Fiscal Year 2025 Core Operating Income Forecast:JPY200 billion, an increase of JPY15 billion from the previous forecast.
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Net Income Attributable to Owners of the Parent Forecast:JPY55 billion, an increase of JPY10 billion year-on-year.
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Annual Dividend Per Share:Increased to JPY13.5 from JPY9 in the previous year.
Release Date: February 03, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Core operating income and net income attributable to owners of the parent significantly increased compared to the same period of the previous fiscal year.
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Sumitomo Pharma's strong sales and partial divestiture of the Asian business recorded a gain, contributing to increased core operating income.
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Essential & Green Materials segment saw a significant year-on-year increase in core operating income due to gains from the partial sale of shares in Petro Rabigh and improved trade terms.
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Agro & Life Solutions segment experienced solid performance, with strong shipments in Japan and India.
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The company announced an increase in the year-end dividend per share, reflecting improved profit and loss outlook.
Negative Points
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Sales revenue decreased by JPY198.5 billion year-on-year, with declines in all segments except Sumitomo Pharma.
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Nonrecurring items resulted in a total loss of JPY6.4 billion, worsening by JPY91.8 billion compared to the previous year.
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Finance income recorded a loss of JPY36 billion, with a worsening of JPY22.8 billion year-on-year in foreign currency transactions.
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The ICT & Mobility Solutions segment saw a decline in core operating income due to decreased shipments of display-related materials.
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The company anticipates recording losses from nonrecurring items concentrated in the fourth quarter, impacting overall profitability.
Q & A Highlights
Q: For Agro & Life Solutions, why was the profit in the third quarter not large, and what is the situation of inventory adjustment moving towards the fourth quarter? A: Toshihiro Yamauchi, Executive Officer, Director of Accounting, explained that profits were better than last year, with solid performance in India and Japan. However, South America faced challenges due to drought and credit concerns. Inventory is generally improving, especially in the United States and India, but South America still has some inventory issues to resolve.
Q: Regarding ICT & Mobility Solutions, what contributed to the performance in the third quarter, and what is the future trend for semiconductors? A: Toshihiro Yamauchi noted that semiconductors are gradually recovering, with increased DRAM utilization and NAND recovery. However, performance varies by customer, with South Korea seeing a decline and Taiwan and China increasing. The resist sales have increased compared to last year, and expectations are high for continued performance.
Q: In the Essential & Green Materials segment, what factors contributed to the profit and loss improvement in the third quarter? A: Toshihiro Yamauchi stated that the improvement was due to the sale of Petro Rabigh equity and refining margin improvements. The equity method was applied at 37.5% up to the third quarter, and it will be 15% from the fourth quarter. Sales of Rabigh products increased after a periodic shutdown for maintenance.
Q: What is the outlook for dividends, and how does it relate to the company's profit recovery? A: Toshihiro Yamauchi explained that the dividend policy is stable, with a payout ratio of about 30%. The profit for this year was revised upward to JPY55 billion, leading to a dividend increase. The company aims to maintain a stable minimum dividend payment, with the current payout ratio at 40%.
Q: What are the expectations for corporate expenses in the fourth quarter and beyond? A: Toshihiro Yamauchi mentioned that corporate expenses include R&D expenses, particularly for regenerative cell research. These expenses are difficult to project, but the company expects to maintain a certain level of spending, with more than JPY10 billion allocated for regenerative cells.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
