Sumitomo Chemical Q1 Core Operating Profit More Than Doubles to ¥62.3 Billion as Petrochemicals Swing to Profit

Every profit line multiplies

Sumitomo Chemical Company, Limited (TSE: 4005) published consolidated results for the three months to June 30, 2026 on August 4, 2026 under IFRS. Revenue rose 9.9% to ¥578,199 million, an increase of ¥52,100 million. Core operating profit — the group's measure of recurring earnings power, which includes equity-method results and excludes non-recurring items — rose 125.2% to ¥62,336 million, and reported operating profit 139.8% to ¥61,041 million. Pre-tax profit multiplied more than tenfold to ¥60,313 million from ¥5,817 million.

Net profit attributable to owners of the parent came in at ¥40,782 million against a ¥4,523 million loss a year earlier, for earnings per share of ¥24.70 versus a loss per share of ¥2.76. The swing owes much to equity-method investments, which contributed income of ¥12,216 million after a ¥9,826 million loss in the same quarter last year. Comprehensive income reached ¥91,645 million against ¥1,125 million.

Petrochemicals and agrochemicals lead the turnaround

Essential & Green Materials produced the single largest movement, swinging to core operating profit of ¥27,224 million from a ¥5,463 million loss — an improvement of ¥32,687 million — on revenue up 3.2% to ¥171,865 million. Management cites improved terms of trade at Rabigh Refining and Petrochemical Company, its equity-method affiliate in Saudi Arabia, and inventory valuation gains as synthetic-resin prices rose.

Agro & Life Solutions lifted revenue 12.4% to ¥109,252 million and core operating profit more than fourfold to ¥9,631 million, with crop-protection sales firm in Japan and export receipts flattered by the weaker yen, while methionine terms of trade improved. Sumitomo Pharma grew revenue 19.9% to ¥129,495 million as the U.S. prostate-cancer drug Orgovyx and the overactive-bladder drug Gemtesa expanded, more than covering the loss of revenue from the partial sale of Asian operations last year; segment core operating profit nevertheless slipped 10.3% to ¥18,846 million as research spending rose on oncology trials and psychiatry and neurology programmes.

Display materials and CDMO remain the soft spots

ICT & Mobility Solutions raised revenue 8.2% to ¥149,825 million but core operating profit fell 29.0% to ¥13,034 million. Display-related materials lost the transfer gain that accompanied last year's overhaul of the large-panel LCD polarising-film business, and although semiconductor process materials sold more high-purity chemicals and photoresists, higher fixed costs limited the profit contribution. Advanced Medical Solutions edged revenue up 2.0% to ¥13,039 million on timing in the small-molecule CDMO business but widened its core operating loss to ¥1,938 million from ¥1,024 million on product mix.

Balance sheet, guidance and dividend

Total assets rose ¥208,500 million from the March year-end to ¥3,613,506 million as raw-material prices lifted receivables and inventories. Liabilities rose ¥32,700 million to ¥2,201,100 million while interest-bearing debt fell ¥19,300 million to ¥1,132,200 million. Total equity rose ¥175,800 million to ¥1,412,442 million, helped by a public share offering at consolidated subsidiary Sumitomo Pharma that increased non-controlling interests and capital surplus. The equity-attributable ratio improved 0.9 points to 30.5%.

Sumitomo Chemical published first-half guidance for the first time, having previously left it undetermined: revenue of ¥1,170,000 million (+6.8%), core operating profit of ¥125,000 million (+15.0%), operating profit of ¥122,000 million (+17.7%) and net profit of ¥70,000 million (+76.3%), assuming ¥157.00 to the dollar and naphtha at ¥104,000 per kilolitre. The full-year forecast published earlier — revenue of ¥2,360,000 million, core operating profit of ¥215,000 million, operating profit of ¥177,000 million and net profit of ¥70,000 million — is unchanged on paper but the company says it is under review and will be revisited at the interim announcement. On those numbers the six-month profit target already equals the full-year one. The annual dividend forecast rises to ¥16.00 from ¥13.50, split ¥8.00 and ¥8.00.

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.