Tosoh (4042) Q1 2026 earnings summary

Executive summary

• Net sales for 1Q FY2026 were ¥245.1B, down 3.1% year-over-year, mainly due to lower naphtha prices, a stronger yen, and reduced production from scheduled maintenance.

• Operating income fell 18.9% to ¥16.1B, impacted by unfavorable inventory fluctuations and higher fixed costs, despite Engineering segment growth.

• Net income attributable to owners dropped 59.8% to ¥6.5B; ordinary income fell 48.5% to ¥14.1B.

• Global economic conditions remained uncertain, with steady US growth, moderate European recovery, and mixed signals from China.

• Declines in petrochemical and chlor-alkali segments offset gains in specialty and engineering.

Financial highlights

• Gross profit was ¥56.7B, down from ¥58.7B year-over-year; basic EPS decreased to ¥20.50 from ¥50.98.

• Comprehensive income for the quarter was ¥1.8B, sharply down from ¥24.9B prior year.

• Extraordinary income of ¥1.2B included a ¥1.6B gain on sale of investment securities.

• Equity ratio improved to 62.0% from 61.2% year-over-year.

• Free cash flow turned positive at ¥10.8B, up ¥13.6B year-over-year; cash and cash equivalents at period end ¥143.5B.

Outlook and guidance

• FY2026 forecasts remain unchanged: net sales ¥1,050.0B, operating income ¥108.0B, net income attributable to owners ¥62.0B.

• No changes to previously announced earnings forecasts for the second quarter or full year.

• Annual dividend forecast at ¥100 per share; up to ¥25B in share buybacks planned.