Fiscal Year Ending March 2026 Q3 Financial Summary [Japanese GAAP] (Consolidated)

Performance Overview

Consolidated results for the third quarter of the fiscal year ending March 2026 recorded net sales of ¥756.1 billion, a 5.0% decrease from the same period last year. This was influenced by declines in naphtha prices and overseas market prices of major products, reduced production volumes due to differences in scale of regular maintenance at the Nanyo plant, and reduced demand for petrochemical products. Operating income was ¥69.9 billion, down 6.3% year-over-year; although the engineering segment saw sales growth and raw material prices declined, the negative impact of deteriorating inventory valuation differences and increased fixed costs weighed on profits. Quarterly net income attributable to owners of the parent was ¥24.6 billion, a 49.2% decrease YoY, impacted by impairment losses on fixed assets recorded at the US subsidiary.

Business Segment Status

The petrochemical segment posted net sales of ¥133.0 billion (16.4% decrease YoY) and operating income of ¥8.1 billion (34.7% decrease YoY). The chlor-alkali segment recorded net sales of ¥253.8 billion (9.0% decrease YoY) and operating income of ¥100 million (decreased profit YoY). The functional products segment had net sales of ¥202.6 billion (nearly flat) and operating income of ¥31.1 billion (nearly flat). The engineering segment performed strongly with net sales of ¥132.8 billion (10.7% increase YoY) and operating income of ¥27.8 billion (30.1% increase YoY). Other businesses posted net sales of ¥33.8 billion (2.2% decrease YoY) and operating income of ¥2.8 billion (24.0% increase YoY).

Financial Position and Cash Flow Status

Total assets increased from the previous fiscal year-end to ¥1.344 trillion. Liabilities rose to ¥460.8 billion, while net assets decreased to ¥883.6 billion. Cash and cash equivalents declined to ¥134.3 billion compared to the previous fiscal year-end. Cash flow from operating activities resulted in inflow of ¥79.0 billion; investing activities saw outflow of ¥58.0 billion; and financing activities recorded outflow of ¥24.8 billion. The increase in financing outflows was due to share buyback activities.

Revision to Consolidated Earnings Forecast

The consolidated earnings forecast for the full fiscal year ending March 2026 has been revised to net sales of ¥1.01 trillion (5.0% decrease YoY), operating income of ¥90.0 billion (9.0% decrease YoY), ordinary income of ¥94.0 billion (8.7% decrease YoY), and net income attributable to owners of the parent of ¥30.0 billion (48.3% decrease YoY). Earnings per share for the period is expected to be ¥94.93. This is a revision from the forecast announced on November 4, 2025.