Supplementary Materials for Q3 Fiscal Year 2025 Financial Results

Performance Overview

For the cumulative first three quarters of fiscal year 2025, net sales were 498.7 billion yen, down 4% year-over-year, and operating income was 12.7 billion yen, down 50% year-over-year. Ordinary income was 21.9 billion yen, down 36% year-over-year, and net income attributable to owners of parent was 18.5 billion yen, down 22% year-over-year. The full-year earnings guidance forecasts net sales of 710 billion yen (up 5% YoY), operating income of 27 billion yen (down 16% YoY), ordinary income of 45 billion yen (up 3% YoY), and net income attributable to owners of parent of 54 billion yen (up 99% YoY). Major factors for profit decline include deterioration in raw material procurement conditions in the smelting segment and the booking of derivative valuation losses; however, ordinary income is expected to increase due to higher equity-method investment income driven by rising metal prices.

Business Environment and Segment Trends

The Environment & Recycling segment experienced steady waste disposal orders domestically and internationally. The Automotive-related segment saw increased orders and sales due to production recovery. Conversely, silver powder sales for solar panels in the New Energy segment declined amid fierce competition. Electronic Materials sales increased due to rising demand for AI servers. On the cost front, reduced electricity costs were offset by worsening smelting raw material procurement conditions and rising labor costs. By segment, the Environment & Recycling segment posted higher net sales, the Smelting segment showed net sales growth but operating income declined, and the Electronic Materials segment recorded a significant decrease in operating income.

Dividend Forecast Revision and Shareholder Returns

The annual dividend forecast for fiscal year 2025 has been raised from 183 yen to 318 yen, including a special dividend of 100 yen from partial transfer of Fujita Kanko shares. Share buyback is planned with a cap of 10 billion yen or 1,230,000 shares (from 2026-02-12 to 2026-05-29). Consistent with the Mid-term Plan 2027 shareholder return policy, part of the proceeds from the share sale will be prioritized for shareholder returns, aiming to achieve a 10% ROE.

Overview of Share Transfer and Future Policy

Approximately 14,980,000 shares of Fujita Kanko Co., Ltd. (equivalent to 25% voting rights) were transferred for approximately 38.9 billion yen. Consequently, Fujita Kanko will be excluded from equity-method affiliates. The approximately 23 billion yen special profit anticipated from the transfer is expected to be reflected in the Q4 fiscal year 2025 financial results. The ongoing holding of remaining listed shares will be reviewed periodically.