Financial Summary for the Third Quarter of the Fiscal Year Ending March 2026 [Japanese GAAP] (Consolidated)

Overview of Business Results

For the third quarter of the fiscal year ending March 2026, consolidated net sales were 101,930 million yen (6.1% year-over-year increase), operating income was 12,922 million yen (11.0% year-over-year increase), and ordinary income was 13,262 million yen (10.4% year-over-year increase). Meanwhile, net income attributable to owners of parent for the quarter was 8,799 million yen (17.7% year-over-year decrease), reflecting a decline due to the absence of a special gain of 2,492 million yen recorded in the same period last year. In the core marine coatings segment, sales increased driven by higher shipments for new vessels in China and promotion of high value-added products. Industrial coatings also saw revenue growth due to price adjustments and demand recovery in Japan and Europe. However, container coatings revenue declined due to production adjustments in Southeast Asia.

Segment Performance and Financial Position

By region, net sales and profits generally increased in Japan, China, South Korea, Southeast Asia, and Europe & the United States segments. Particularly strong was Japan with net sales of 33,463 million yen (4.8% year-over-year increase) and segment profit of 2,590 million yen (48.0% year-over-year increase). Europe & the United States posted net sales of 23,880 million yen (12.6% year-over-year increase), but profit declined due to increased operating expenses. Total assets increased by 6,710 million yen to 151,487 million yen compared to the previous fiscal year-end, and the equity ratio rose to 58.4%. Cash flow from operating activities was positive at 8,208 million yen, investing activities used 3,199 million yen, and financing activities used 4,798 million yen.

Dividends and Future Outlook

The annual dividend forecast for the fiscal year ending March 2026 is 111 yen (including a year-end dividend of 63 yen), representing an increase from 97 yen in the previous fiscal year. There is no revision to the earnings guidance announced on October 31, 2025, which anticipates full-year net sales of 137,000 million yen (4.5% year-over-year increase), operating income of 17,500 million yen (13.8% year-over-year increase), and net income attributable to owners of parent of 11,500 million yen (16.2% year-over-year decrease).

Absorption Merger of Wholly Owned Subsidiary

On July 1, 2026, Chugoku Marine Paints, Ltd. plans to absorb its wholly owned subsidiary Bunsei Shoji Co., Ltd. The merger aims to unify sales channels and rationalize group management and operational efficiency. There will be no issuance of new shares or monetary payments associated with the merger. The merger will be conducted as a simplified merger method, requiring no approval at the shareholders meeting.