Mitsubishi Chemical Group Corporation (TSE: 4188), Japan's largest diversified chemicals company, reported consolidated results for the first quarter of the fiscal year ending March 2027 — the three months from April 1 to June 30, 2026 — under IFRS. Revenue rose 14.0% to ¥1,004.2 billion, crossing the ¥1 trillion mark for the quarter, while core operating profit more than doubled, up 101.7% to ¥114.1 billion. Reported operating profit rose 94.4% to ¥118.4 billion, profit before tax rose 122.9% to ¥111.8 billion, quarterly profit rose 131.6% to ¥83.3 billion and profit attributable to owners of the parent rose 194.0% to ¥57.7 billion. Basic earnings per share were ¥42.47 against ¥13.96 a year earlier, with a diluted figure of ¥42.45. Core operating profit is the measure Mitsubishi Chemical uses to run and evaluate its businesses: it is reported operating profit stripped of non-recurring items such as losses arising from business withdrawals or downsizing, which makes it closer to an underlying earnings figure than the IFRS operating line.
Every reporting segment improved, led by semiconductor-related demand
The group reorganised its business divisions in April 2026 and, from this quarter, revised its reporting segments from the previous four — Specialty Materials, MMA & Derivatives, Basic Materials & Polymers and Industrial Gases — to Specialty Materials, MMA & Derivatives, Basic Materials and Industrial Gases, with the prior-year quarter restated on the new basis. On that basis all four segments grew both revenue and core operating profit. Specialty Materials, the largest profit contributor after industrial gases, lifted external revenue ¥46.7 billion to ¥332.5 billion and core operating profit ¥21.0 billion to ¥38.3 billion, on higher volumes of barrier packaging and MLCC films, carbon-fibre composite parts sold mainly for robotaxis, high-performance engineering plastics for semiconductor production equipment, and expanding semiconductor-related products and services — partly offset by a decline in Water & Infrastructure against a large equipment project booked a year earlier. Industrial Gases added ¥47.0 billion of revenue to reach ¥360.0 billion and ¥9.1 billion of core operating profit to ¥54.1 billion, helped by regional price management and the prior-year acquisition and consolidation of industrial-gas businesses in Australia and New Zealand, against higher US electricity costs.
The commodity-facing segments delivered the sharpest swings. Basic Materials turned a ¥6.7 billion core operating loss into a ¥14.8 billion profit — a ¥21.5 billion improvement, the largest of any segment — on revenue up ¥19.5 billion to ¥185.0 billion, as a broadly better inventory valuation outweighed a narrower spread between feedstock and product prices in polyolefins; a heavier ethylene-cracker turnaround schedule and Middle East-related volume losses were offset by higher selling prices tracking raw materials, plus foreign exchange. MMA & Derivatives raised revenue ¥10.3 billion to ¥99.9 billion and core operating profit ¥4.4 billion to ¥8.0 billion: MMA monomer market prices rose and currency helped, even though the Middle East situation cut into production, supply and sales volumes. The residual "Other" businesses — mainly engineering, transport and warehousing — were flat at ¥26.7 billion of revenue and ¥0.3 billion of core operating profit, while unallocated corporate costs and eliminations subtracted ¥1.5 billion, less than the ¥3.1 billion drag a year earlier.
Gross margin widened, and one-off gains pushed reported profit above core
Gross profit rose 28.5% to ¥321.1 billion as cost of sales grew only 8.3% to ¥683.1 billion, lifting the gross margin to 32.0% from 28.4%. Selling, general and administrative expenses rose a more contained 8.6% to ¥211.0 billion. The core operating margin reached 11.4%, against 6.4%, and the reported operating margin 11.8% against 6.9%. Unusually, the non-recurring items excluded from core profit were a net positive this quarter: a ¥12.8 billion gain on sales of fixed assets — of which ¥10.4 billion came from Nippon Sanso Holdings' disposal of land in connection with its head-office relocation — outweighed ¥3.9 billion of impairment losses (including ¥1.9 billion on that same head-office building), ¥2.9 billion of equity-method investment losses, ¥0.5 billion of losses on retirement and disposal of fixed assets, ¥0.1 billion of special retirement payments and ¥1.1 billion of other items. The net ¥4.3 billion addition is why reported operating profit of ¥118.4 billion sits above core operating profit of ¥114.1 billion; a year earlier a ¥8.0 billion gain on a business transfer had produced a similar, slightly larger uplift.
A lighter tax charge amplified the gain at the bottom line
Net finance expense narrowed to ¥6.6 billion from ¥10.8 billion, as finance income edged up to ¥3.5 billion from ¥2.9 billion while finance costs fell to ¥10.0 billion from ¥13.7 billion — carrying profit before tax up 122.9%, ahead of the 94.4% operating gain. Income tax expense rose to ¥28.5 billion from ¥17.1 billion, but the effective rate fell to 25.5% from 34.1%, so profit from continuing operations more than doubled to ¥83.3 billion from ¥33.0 billion. The year-earlier quarter also carried ¥2.9 billion from discontinued operations — Mitsubishi Tanabe Pharma, now Tanabe Pharma, whose shares and related assets were transferred to a special-purpose company backed by a Bain Capital Private Equity-advised fund in a deal completed on July 1, 2025 — against nil this year. Non-controlling interests took ¥25.6 billion, up from ¥16.3 billion, and profit attributable to owners of the parent still grew 194.0%. Earnings per share grew faster still, at 204.2%, because the weighted-average share count fell to 1,358,630,906 from 1,406,093,780. Total comprehensive income reached ¥117.0 billion, up 97.7%, with ¥27.6 billion of foreign-currency translation gains against ¥16.4 billion a year earlier.
First-half guidance raised by up to 46%, full-year plan left untouched
Mitsubishi Chemical revised only its first-half forecast, publishing a separate revision notice the same day. Against the figures issued on May 13, half-year revenue guidance rises 9.8% to ¥2,043.0 billion from ¥1,861.0 billion, core operating profit 39.6% to ¥194.0 billion from ¥139.0 billion, operating profit 32.2% to ¥189.0 billion from ¥143.0 billion, profit before tax to ¥175.0 billion from ¥129.0 billion, interim profit 32.7% to ¥130.0 billion from ¥98.0 billion and profit attributable to owners of the parent 45.8% to ¥86.0 billion from ¥59.0 billion, taking half-year EPS guidance to ¥63.30 from ¥43.43. The company attributed the upgrade to strong sales of semiconductor-related products and, from the Middle East situation, inventory valuation gains on surging naphtha prices plus a temporary lift in demand from customers worried about securing feedstock. Measured against the prior-year first half, the revised plan is 13.6% higher on revenue, 53.8% on core operating profit and 118.5% on operating profit — but 8.8% lower on interim profit and 21.9% lower on the owners' share, because the year-earlier six months of ¥110.1 billion included the pharmaceutical divestment.
The full-year forecast was not changed: revenue of ¥3,800.0 billion (+2.6%), core operating profit of ¥305.0 billion (+35.6%), operating profit of ¥300.0 billion (+897.4%), profit of ¥200.0 billion (+155.0%), profit attributable to owners of the parent of ¥127.0 billion (+973.6%), EPS of ¥93.48 and profit before tax of ¥270.0 billion. The company stated plainly that it has not prepared a new full-year forecast because the second half is difficult to assess at this stage — a caveat worth weighting, since the raised first half and the untouched full year together imply only ¥111.0 billion of core operating profit and ¥41.0 billion of owners' profit in the six months to March. The first quarter alone already accounts for 26.4% of forecast full-year revenue, 37.4% of forecast core operating profit and 45.4% of the forecast owners' share.
Cash fell on debt repayment while the equity ratio improved to 31.0%
Total assets were nearly flat at ¥5,881.0 billion, up just ¥4.4 billion from ¥5,876.6 billion at the March year-end: the yen's weakness raised the translated value of overseas subsidiaries' assets and higher raw-material prices lifted inventories to ¥710.9 billion from ¥669.1 billion, while cash and cash equivalents fell to ¥445.1 billion from ¥527.1 billion on repayment of interest-bearing debt. Property, plant and equipment rose to ¥2,112.4 billion and goodwill to ¥900.8 billion. Total liabilities fell 2.4% to ¥3,380.2 billion, with current bonds and borrowings cut to ¥341.1 billion from ¥387.1 billion. Equity attributable to owners of the parent rose 3.4% to ¥1,821.4 billion and the equity ratio improved to 31.0% from 30.0%. Operating cash flow fell 41.8% to ¥35.1 billion despite the higher pre-tax profit, as working capital absorbed cash — inventories took ¥38.1 billion and other items ¥46.4 billion. Investing outflows narrowed to ¥26.3 billion from ¥35.8 billion, with ¥65.1 billion of capital expenditure on property, plant and equipment offset by ¥15.8 billion of disposal proceeds and ¥25.7 billion from sales and redemptions of investments, leaving free cash flow of ¥8.7 billion against ¥24.5 billion. Financing outflows widened to ¥93.4 billion from ¥38.7 billion, including ¥33.7 billion of long-term debt repayment, ¥30.0 billion of bond redemptions, ¥21.7 billion of dividends to parent shareholders and ¥9.2 billion to non-controlling interests.
Annual dividend held at ¥32.00
The dividend forecast was left unchanged from the company's previous announcement: an interim of ¥16.00 and a year-end of ¥16.00 for an annual ¥32.00, matching the ¥32.00 paid for the year ended March 2026 on the same even split. Shares issued including treasury stock were unchanged at 1,441,467,207, while treasury shares edged down to 82,779,392 from 82,919,774; those totals include 1,376,066 shares held by the BIP trust used for the group's officer share-based compensation plan, against 1,490,207 at the year-end. There was no material change to the scope of consolidation and no change to accounting policies or estimates during the period. The quarterly consolidated financial statements attached to this release were not subject to review by a certified public accountant or an audit firm; Mitsubishi Chemical said it plans to disclose a version accompanied by a review report on August 7, 2026.
| Metric | Q1 FY3/2027 | Q1 FY3/2026 | YoY |
|---|---|---|---|
| Revenue (¥ million) | 1,004,246 | 880,652 | +14.0% |
| Gross profit (¥ million) | 321,111 | 249,826 | +28.5% |
| Core operating profit (¥ million) | 114,104 | 56,562 | +101.7% |
| Core operating margin (%) | 11.4 | 6.4 | +5.0 pt |
| Operating profit (¥ million) | 118,400 | 60,908 | +94.4% |
| Profit before tax (¥ million) | 111,806 | 50,158 | +122.9% |
| Quarterly profit (¥ million) | 83,313 | 35,968 | +131.6% |
| Profit attributable to owners of parent (¥ million) | 57,706 | 19,627 | +194.0% |
| Basic EPS (¥) | 42.47 | 13.96 | +204.2% |
| Total comprehensive income (¥ million) | 117,037 | 59,213 | +97.7% |
| Operating cash flow (¥ million) | 35,067 | 60,228 | −41.8% |
| Total assets (¥ million, vs FY3/26 year-end) | 5,881,036 | 5,876,609 | +0.1% |
| Equity attributable to owners (¥ million, vs FY3/26 year-end) | 1,821,439 | 1,761,675 | +3.4% |
| Equity ratio (%, vs FY3/26 year-end) | 31.0 | 30.0 | +1.0 pt |
| H1 FY3/27 core operating profit guidance (¥ million, revised vs previous) | 194,000 | 139,000 | +39.6% |
| H1 FY3/27 profit attributable to owners guidance (¥ million, revised vs previous) | 86,000 | 59,000 | +45.8% |
| FY3/27 revenue guidance (¥ million) | 3,800,000 | — | +2.6% |
| FY3/27 core operating profit guidance (¥ million) | 305,000 | — | +35.6% |
| FY3/27 operating profit guidance (¥ million) | 300,000 | — | +897.4% |
| FY3/27 profit attributable to owners guidance (¥ million) | 127,000 | — | +973.6% |
| FY3/27 EPS guidance (¥) | 93.48 | — | — |
| Annual dividend (¥, FY3/27 forecast vs FY3/26 actual) | 32.00 | 32.00 | Unchanged |
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.