Asahi Kasei (3407) Q1 2027 earnings summary

Executive summary

• Q1 2026 saw significant growth in net sales, operating income, and net income, driven by strong performance in Pharmaceuticals, Critical Care, and Electronics, and the nonrecurrence of prior-year losses in Material.

• Net sales for Q1 2026 rose 11.9% year-over-year to ¥826,157 million, with operating income up 51.5% and net income attributable to owners of the parent surging 172.7% to ¥53,766 million.

• Comprehensive income improved significantly to ¥78,774 million from a loss of ¥7,386 million in Q1 2025.

• Strategic capital allocation and business portfolio transformation continued, including major M&A (Aicuris acquisition) and divestitures in non-core or low-performing businesses.

Financial highlights

• Q1 2026 net sales: ¥826.2 billion (+11.9% YoY); operating income: ¥81.3 billion (+51.5% YoY); net income: ¥53.8 billion (+172.7% YoY).

• EBITDA increased 32.6% to ¥133.9 billion; operating margin improved to 9.8%.

• Gross profit increased to ¥290,352 million from ¥240,498 million year-over-year, while operating income reached ¥81,305 million, up from ¥53,653 million.

• Ordinary income jumped 70.8% to ¥85,330 million, and net income per share rose to ¥39.73 from ¥14.52.

• H1 2026 forecast: net sales ¥1,686.0 billion (+13.4% YoY), operating income ¥145.0 billion (+34.9% YoY), net income ¥89.0 billion (+34.3% YoY).

Outlook and guidance

• Fiscal 2026 net sales are forecast at ¥3,254,000 million (+5.8% year-over-year), with operating income of ¥248,000 million (+7.3%) and net income attributable to owners of the parent at ¥160,000 million (+0.8%).

• Both operating and net income are expected to rise in H1 2026, with continued strong performance in First Priority businesses.

• Interim and annual dividend forecasts are ¥22.00 and ¥44.00 per share, respectively.

• Share repurchase program of up to ¥40 billion is underway.