Sumitomo Chemical Company (4005) Q4 2025 earnings summary

Executive summary

• Achieved a V-shaped recovery in FY2024, with core operating income of JPY 140.5 billion, reversing a loss of JPY 149.0 billion in FY2023, and net income attributable to owners rebounding to JPY 38.6 billion from a significant prior-year loss.

• Sales revenue increased 6.5% year-on-year to JPY 2,606.3 billion, with all business segments reporting higher sales.

• ROIC improved to 2.2% and ROE to 4.1% from -29.2% year-over-year.

• Major impairment losses were reduced to JPY 26.3 billion from JPY 269.4 billion in FY2023, reflecting improved asset utilization.

Financial highlights

• Operating income improved to JPY 193.0 billion from a JPY 488.8 billion loss, supported by non-recurring gains and improved segment performance.

• Free cash flow was positive at JPY 318.3 billion, a JPY 481.8 billion improvement year-on-year.

• Interest-bearing debt decreased by JPY 277.4 billion to JPY 1,286.1 billion, improving the D/E ratio to 1.20.

• Overseas sales revenue ratio increased to 69.9% from 68.0% year-on-year.

• Total assets decreased by JPY 495.0 billion to JPY 3,439.8 billion, mainly due to share transfers and lower financial assets.

Outlook and guidance

• FY2025 sales revenue is forecast at JPY 2,340.0 billion (down 10.2%), with core operating income of JPY 150.0 billion and net income attributable to owners at JPY 40.0 billion.

• Dividend per share is projected to rise to JPY 12.00, up from JPY 9.00, with a payout ratio of 49.1%.

• Targeting core operating income of JPY 200 billion by FY2027 as per midterm plan.

• Underlying profit (excluding business dispositions) targeted at JPY 100.0 billion.

• Assumptions include an exchange rate of JPY 145/USD and naphtha price of JPY 68,000/kl.