Nichiha Q1 Net Profit More Than Triples on a Chinese Asset Sale as Price Rises Lift Operating Profit 63%

Less revenue, much more profit

Nichiha Corporation (TSE: 7943) published consolidated results for the three months to June 30, 2026 on July 31, 2026 under Japanese GAAP. Revenue fell 2.5% to ¥33,985 million, a decline of ¥884 million. The two halves of the business moved in opposite directions: domestic exterior materials grew despite a weak housing market because the company pushed through price revisions, while US exterior materials shrank as Nichiha withdrew from the general-purpose residential siding business.

Profit went the other way, and decisively. Operating profit rose 62.6% to ¥1,893 million — an operating margin of 5.6% against 3.3% — as the price revisions and the US exit outweighed a surge in material prices. Ordinary profit doubled, up 100.4% to ¥1,907 million, with improved foreign-exchange gains and losses adding to the operating gain.

Net profit attributable to owners of the parent rose 245.2% to ¥2,401 million, more than triple the year-earlier ¥695 million. The step up from ordinary profit is a single item: a Chinese subsidiary booked a gain on the sale of fixed assets as an extraordinary gain as part of a business reorganisation. Earnings per share reached ¥72.30 against ¥20.52, and comprehensive income swung to a ¥2,769 million profit from a ¥1,665 million loss.

A shrinking market met with price

The domestic housing market — Nichiha's main outlet — remained difficult. New housing starts rose on a rebound from the prior year's revisions to the Building Standards Act and the Building Energy Efficiency Act, but underlying demand stayed weak on population decline and high house prices. Industry-wide domestic sales volume of fibre-cement exterior materials fell 2.6% in the April–June quarter on a basis that includes 12 mm products outside the JIS standard. In the United States, the non-residential market stayed uncertain, with high construction costs and high interest rates keeping some investment on the sidelines.

The Exterior Materials segment, which is effectively the group, saw revenue fall 2.5% to ¥31,992 million — down ¥828 million — while segment profit rose 37.9% to ¥2,543 million, up ¥698 million, on the same price revisions and the exit from the unprofitable US line.

A 70th-anniversary dividend, and guidance held

Total assets fell 1.1% to ¥166,380 million from the March 31, 2026 year-end while net assets rose to ¥121,998 million, lifting the equity ratio to 73.6% from 72.2%. Book value per share reached ¥3,684.16.

Nichiha raised its dividend forecast, announced the same day: the FY3/2027 interim goes to ¥64.00 — ¥57.00 ordinary plus a ¥7.00 commemorative dividend for the company's 70th anniversary — with the year-end unchanged at ¥57.00, for an annual ¥121.00 against ¥114.00 paid for FY3/2026. Full-year earnings guidance was left unchanged: revenue of ¥141,000 million (−1.9%), operating profit of ¥9,600 million (+2.6%), ordinary profit of ¥9,800 million (−4.4%) and net profit of ¥8,000 million (+221.7%). The first-half guidance is revenue of ¥68,500 million (−3.6%), operating profit of ¥3,600 million (+3.0%) and net profit of ¥3,600 million (+45.9%).

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