Sumitomo Chemical Raises Core Operating Income 32.9% in Second Quarter
Key Facts
Sumitomo Chemical reported its second-quarter and first-half results for fiscal 2026 on November 2, covering the period from April 1 to September 30, with quarterly revenue of 1,172.8 billion yen and core operating income of 144.5 billion yen. Revenue rose 7.1% from the same period, while core operating income increased 32.9%. Net income attributable to owners of the parent totaled 82.9 billion yen, up 108.8% from 39.7 billion yen a year earlier. The results reflect mixed performance across the group’s businesses, with some segments recording sharp gains in core operating income and the Technology & Mobility Solutions segment posting a slight decline. The company also raised its full-year financial forecasts and increased its expected dividends.
For the first half, group operating income was 138.1 billion yen, compared with 103.7 billion yen in the same period of the previous fiscal year. The most notable turnaround was in the Essential & Green Materials segment, where core operating income shifted from a loss of 18.6 billion yen to income of 62.1 billion yen. This came despite a decline in segment revenue to 320.9 billion yen from 329.1 billion yen, highlighting that improved profitability was not accompanied by sales growth. In the Agri & Life Solutions segment, second-quarter core operating income rose by 9.6 billion yen to 20.8 billion yen. Revenue in the segment also increased to 226.5 billion yen from 213.0 billion yen in the same period.
The Technology & Mobility Solutions segment recorded first-half revenue of 311.9 billion yen, compared with 283.5 billion yen a year earlier, while core operating income fell to 31.9 billion yen from 33.1 billion yen. The company said demand for high-purity chemicals and photoresists used in semiconductor processing increased, and that shipments of semiconductor processing materials are expected to rise in its full-year forecast. But that support did not prevent a year-on-year decline in the segment’s core income. The company said structural reforms in its polarizing film business for large displays reduced capital gains. This shows how growth in demand for semiconductor-related materials differed from the segment’s overall result, which was also affected by other factors.
Against the backdrop of segment performance, the average exchange rate was 159.49 yen to the dollar in the first half, compared with 146.02 yen a year earlier, while the price of naphtha rose to 107,500 yen per kiloliter from 64,800 yen. The company said the weaker yen supported the conversion into local currency of sales by subsidiaries outside Japan. It also linked improved methionine margins, for use in animal feed additives, to temporary supply concerns arising from the situation in the Middle East. These factors coincided with mixed results across segments: a sharp improvement in Essential & Green Materials, growth in Agri & Life Solutions, and lower income in Technology & Mobility Solutions. These details provide context for the company’s revised annual forecasts without erasing differences in sales and profitability trends across its businesses.
Sumitomo Chemical raised its fiscal 2026 forecasts to revenue of 2.49 trillion yen, core operating income of 270 billion yen and net income attributable to owners of the parent of 90 billion yen. The company said its estimates take into account increased shipments of semiconductor processing materials, progress in Essential & Green Materials, and higher sales of Gemtesa in North America. For dividends, it decided to pay 8 yen per share for the first half and expects 9 yen for the second half, bringing the expected annual dividend to 17 yen per share. The stock closed at 565 yen on October 30, before the results were announced; the available data do not confirm subsequent price movement or a change linked to the announcement. The company set November 10 as the scheduled filing date for its semiannual report, followed by an investor meeting on the strategies of its Agri & Life Solutions and Technology & Mobility Solutions segments on November 30.