Notice of Revision to Earnings Guidance

Details of Revision to Earnings Guidance

KH Neochem Co., Ltd. has revised its consolidated earnings forecast for the fiscal year ending December 2025. Net sales are revised from the previous forecast of 127,400 million yen down to 115,000 million yen, a 9.7% decrease; operating income is revised from 14,000 million yen to 11,200 million yen, a 20.0% decrease; ordinary income is revised from 13,900 million yen to 10,700 million yen, a 23.0% decrease; and net income attributable to owners of parent is revised from 10,000 million yen to 7,700 million yen, a 23.0% decrease. The main factors include sluggish domestic demand in the basic chemicals sector and influx of inexpensive imports, a reactionary decline in rush demand due to U.S. environmental regulations in the functional materials sector, a temporary slowdown in air conditioner demand following the expiration of consumer electronics replacement subsidies in China, and a sales shortfall in refrigerant oil raw materials.

Outlook and Dividend Forecast

The foreign exchange assumption is 150 yen per US dollar, and the domestic naphtha price is assumed at 67,000 yen/KL. There is no change to the dividend forecast for fiscal year 2025, and a stable dividend is expected to be maintained. The consolidated operating income for the fiscal year ending December 2026 is currently forecasted at approximately 13 billion yen, an increase compared to 2025; however, the official earnings forecast will be announced with the financial results on February 6, 2026. The earnings forecast is based on reasonable assumptions as of now and may fluctuate depending on future conditions.