270 Billion Yen: Sumitomo Chemical Raises FY2026 Core Operating Income Forecast
Key Facts
On November 2, Sumitomo Chemical raised its core operating income forecast for the fiscal year ending in March 2027 to 270 billion yen, up 25.6% from its previous estimate of 215 billion yen, announced in May. It also raised its revenue forecast to 2,490 billion yen from 2,360 billion yen, an increase of 5.5%. The company raised its operating income forecast to 215 billion yen from 177 billion yen, and net income attributable to owners of the parent to 90 billion yen from 70 billion yen. It said adjusted core operating income could be the highest in the group’s history. The revision is based on first-half results, which marked the company’s second-highest half-year performance on record, with core operating income and net income attributable to owners of the parent exceeding its August forecasts.
The company’s revenue for April to September was 1,172.8 billion yen, up 7.1% year on year. Core operating income rose to 144.5 billion yen, up 32.9%, while operating income increased to 138.1 billion yen, up 33.2%. Net income attributable to owners of the parent reached 82.9 billion yen, compared with 39.7 billion yen in the same period a year earlier, an increase of 108.8%. Equity-method investment earnings also swung to 36.7 billion yen from a loss of 27.3 billion yen a year earlier.
Performance in the Information Technology & Mobility sector presents a mixed picture between the first half and the new full-year forecast. The company nevertheless raised its forecast for sector income for the fiscal year to 60 billion yen from 55 billion yen, citing expected shipment growth and continued strong demand for silicon wafers. It said demand for those wafers is based mainly on AI-related fields. The company’s annual estimate for the sector has therefore increased, while first-half performance remained below its level a year earlier.
The largest sector revision was in Essential & Green Materials, where the company raised its core operating income forecast to 75 billion yen from 20 billion yen. It attributed the increase to improved results at Petro Rabigh, as well as temporary gains from inventory valuation. The inclusion of the inventory valuation effect indicates that part of the expected improvement is linked to a temporary factor, alongside better results at the investee company. In pharmaceuticals, Sumitomo Chemical raised Sumitomo Pharma’s core operating income forecast to 108 billion yen from 94 billion yen. The company linked the increase to strong sales of Gemtesa, adding pharmaceuticals to materials and semiconductors among the drivers of the forecast revision.
The revised forecast follows the company’s core operating income of 208.4 billion yen in fiscal 2025, compared with 140.5 billion yen in the previous fiscal year, while its initial fiscal 2026 estimate was 215 billion yen. Fiscal 2025 revenue was about 2,328.5 billion yen, compared with 2,606.3 billion yen in the previous fiscal year, while operating income fell to 151.7 billion yen from 193 billion yen. The company defines core operating income as a measure of recurring earnings capacity after excluding gains and losses from non-recurring factors from operating income. At the same time, it said the global economic outlook remains uncertain because of geopolitical risks, including tensions in the Middle East. It maintained its forecast for continued strong demand for AI-related semiconductors.
On dividends, the company raised its expected annual payout to 17 yen per share from 16 yen, with the year-end dividend increased to 9 yen from 8 yen. The revised annual dividend compares with 13.5 yen per share actually paid in fiscal 2025. Sumitomo Chemical shares closed at 565 yen on October 30, according to EL7 data. The company is scheduled to hold an investor meeting on November 30 to review the strategies for its Health & Crop Sciences and Information Technology & Mobility sectors. The meeting follows the announcement of higher forecasts and dividends, and provides a forthcoming date to present the two sector strategies.