Denka Company (4061) investor relations material

Executive summary

• Operating income for 3Q FY2025 rose to ¥18.2 billion, up 54.0% year-over-year, driven by demand recovery in semiconductors and the impact of DPE production suspension.

• Net income reached ¥5.5 billion, a 114.7% increase year-over-year, aided by gains from land sales despite extraordinary DPE-related losses.

• Net sales for the nine months ended December 31, 2025, were ¥290.8 billion, a 3.6% decrease year-over-year, mainly due to lower sales prices following declines in raw material and fuel costs.

• Comprehensive income for the period was ¥5,143 million, up from ¥4,203 million in the prior year.

Financial highlights

• 3Q FY2025 sales were ¥290.8 billion, down ¥10.8 billion year-over-year; operating margin improved to 6.3% from 3.9%.

• Ordinary income increased to ¥13.7 billion (+¥9.4 billion YoY); extraordinary losses of ¥13.5 billion mainly from DPE shutdown, offset by ¥8.2 billion gain on land sale.

• Gross profit increased to ¥69,744 million from ¥64,979 million year-over-year.

• Basic earnings per share for the nine months was ¥64.23, up from ¥29.92 year-over-year.

• Total assets at December 31, 2025, were ¥655,195 million, with net assets of ¥312,568 million and an equity ratio of 45.2%.

Outlook and guidance

• Full-year sales forecast revised to ¥390.0 billion (down ¥10.3 billion from previous), but operating and net income forecasts unchanged at ¥25.0 billion and ¥15.0 billion, respectively.

• Basic earnings per share for the full year projected at ¥174.06.

• Dividend forecast maintained at ¥100 per share, targeting a 57% total return ratio.

• Management aims to maintain or increase dividends, with a long-term total return ratio goal of 50% over eight years.

• Segment forecasts adjusted: Life Innovation and Elastomers & Infrastructure Solutions revised downward, while Electronics & Innovative Products and Polymer Solutions revised upward.