Notice Regarding Recording of Impairment Loss in Consolidated Financial Statements, Recording of Valuation Loss on Affiliated Company Shares and Allowance for Doubtful Accounts on Loans to Affiliated Companies in Separate Financial Statements, and Differences Between Full-Year Earnings Guidance and Actual Results for the Fiscal Year Ending December 2025

Overview of Performance

In the consolidated financial statements for the fiscal year ending December 2025, a special loss of 25.6 billion yen was recorded as an impairment loss, comprising 15 billion yen related to assets in the isoprene chemicals segment and 10.6 billion yen related to styrenic thermoplastic elastomer assets in the elastomer business. In the separate financial statements, a valuation loss on affiliated company shares of 22.6 billion yen and an allowance for doubtful accounts of 13.1 billion yen for loans to affiliated companies were recognized; however, these items are eliminated in consolidation and therefore do not affect consolidated profit or loss. Net sales were almost in line with the previous forecast, while operating income and ordinary income saw slight declines. Net income attributable to owners of the parent significantly decreased due to the impairment loss.

Impact on Shareholders and Dividend Outlook

Net income attributable to owners of the parent for the fiscal year ending December 2025 was 7,468 million yen, a 67.5% decrease from the prior forecast of 23,000 million yen. Meanwhile, the year-end dividend forecast remains unchanged at 27 yen per share, as announced on August 8, 2025. The impairment loss is a special loss, and careful attention to future business trends and asset reviews is necessary.