Shin-Etsu Chemical Co., Ltd. (TSE: 4063), the world's largest producer of PVC and 300-mm silicon wafers and a top-tier supplier of silicones, photoresists and rare-earth magnets, reported FY3/2026 consolidated results showing margin contraction despite essentially flat sales. Revenue edged up 0.5% year-on-year to ¥2,573,969 million, but operating profit fell 14.4% to ¥635,204 million, ordinary profit declined 13.7% to ¥708,281 million and net profit attributable to shareholders dropped 11.2% to ¥474,459 million. Basic EPS came in at ¥252.69 versus ¥269.52, with the modest per-share decline cushioned by an aggressive treasury-stock retirement program.
The operating margin compressed to 24.7% from 29.0%, while ROE attributable to owners eased to 10.4% from 12.0%. Comprehensive income contracted sharply to ¥531,832 million from ¥844,146 million (-37.0%), reflecting less favorable FX translation and equity-investment revaluation than the prior year.
Aggressive treasury-share retirement
In a notice resolved at the board meeting of April 25, 2025, Shin-Etsu authorized the repurchase of up to 200 million shares (¥500 billion ceiling) by April 24, 2026. Within that window the company executed 87,393,400 shares for ¥399,999 million in May 2025 and a further 17,799,900 shares for ¥99,999 million in February 2026 — together representing roughly 5.3% of the original share count. Treasury shares on the balance sheet rose to 128,283,489 from 24,869,464 a year earlier, while the weighted-average share count contracted to 1,877.7 million from 1,981.4 million, helping cushion per-share earnings during the operating-profit drawdown.
Balance sheet and cash flow
Total assets stood at ¥5,661,907 million versus ¥5,636,601 million, with net assets at ¥4,643,307 million. The owner equity ratio eased to 78.7% from 82.6% as treasury buybacks reduced retained earnings funding. Per-share net assets rose to ¥2,400.39. Operating cash flow contracted to ¥712,651 million from ¥881,934 million; investing activities used a substantially larger ¥544,806 million (vs. ¥142,553 million prior year) on continued capacity-investment programs, while financing activities used ¥504,835 million. Cash and equivalents closed at ¥562,089 million.
Standalone (non-consolidated) profile
On a parent-only basis, revenue grew 10.2% to ¥844,666 million as headquarters-level operations expanded, but ordinary profit fell 10.7% to ¥763,302 million and net income fell 11.4% to ¥708,529 million, reflecting lower dividend income from subsidiaries off a particularly strong prior-year base.
Dividend and FY3/2027 guidance
Shin-Etsu held the FY3/2026 full-year dividend at ¥106.00 per share (¥53 interim + ¥53 year-end), unchanged versus prior year, equating to a consolidated payout ratio of 41.9% and a DOE of 4.4%. FY3/2027 guidance has not yet been issued; the company stated it will release consolidated forecasts and dividend guidance "promptly when disclosure becomes possible," signaling continued uncertainty around the timing of a chemicals-cycle recovery and the trajectory of leading-edge wafer demand.
| Metric | FY3/2026 | FY3/2025 | YoY |
|---|---|---|---|
| Revenue (¥ million) | 2,573,969 | 2,561,249 | +0.5% |
| Operating profit (¥ million) | 635,204 | 742,105 | −14.4% |
| Ordinary profit (¥ million) | 708,281 | 820,543 | −13.7% |
| Net profit (¥ million) | 474,459 | 534,021 | −11.2% |
| Basic EPS (¥) | 252.69 | 269.52 | −6.2% |
| Operating margin | 24.7% | 29.0% | −4.3pp |
| ROE (owners) | 10.4% | 12.0% | −1.6pp |
| Total assets (¥ million) | 5,661,907 | 5,636,601 | +0.4% |
| Annual dividend (¥) | 106.00 | 106.00 | ±0.0% |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.