Kuraray (3405) Q2 2026 earnings summary

Executive summary

• First half FY2025 saw net sales decrease 2.7% to ¥399.96B, operating income down 42.2% to ¥26.26B, and net income attributable to owners down 53.9% to ¥14.04B, mainly due to negative inventory valuation and weaker demand, especially in Europe and the US.

• Comprehensive income turned negative at -¥17.65B, mainly due to foreign currency translation losses.

• Strategic portfolio actions included expansion in optical-use poval film, acquisition of Nelumbo Inc., and withdrawal from underperforming businesses.

Financial highlights

• Net sales for FY2025 1H were ¥400.0B, down ¥11.3B year-over-year; operating income fell to ¥26.3B, down ¥19.2B.

• Net income attributable to owners was ¥14.0B, a decrease of ¥16.4B compared to the same period last year.

• Operating cash flow dropped to ¥42.2B from ¥63.7B; free cash flow turned negative at ¥-7.0B.

• CAPEX increased to ¥45.3B, up ¥10.4B year-over-year.

• EPS for the interim period was ¥43.50, down from ¥91.20 year-over-year.

Outlook and guidance

• Full-year FY2025 net sales forecast revised to ¥840.0B (+1.6% YoY); operating income forecast at ¥75.0B (-11.8%).

• Net income forecast for FY2025 is ¥33.0B, up ¥1.3B year-over-year.

• Dividend forecast maintained at ¥54 per share; share buyback up to ¥30.0B (22M shares) in progress.

• Forecasts based on exchange rates of ¥149/USD and ¥166/EUR, with caution due to global uncertainties.