Sumitomo Chemical (4005): FY2025 Results Summary — Underlying Earnings Power Strengthens, FY2026 Guidance Points to Further Growth

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

This summary is based on Sumitomo Chemical Co., Ltd.’s “Investors’ Meeting for FY2025 Financial Results, Management Priorities and Business Strategies” presentation dated May 14, 2026. Per japan-equity.com convention, FY2025 in this article refers to the fiscal year ended March 31, 2026, consistent with the company’s own FY2025 labeling in the source materials. For FY2025, Sumitomo Chemical reported core operating income of ¥208.4 billion (up ¥67.9 billion year on year) and net income attributable to owners of the parent of ¥60.9 billion (up ¥22.4 billion), both above the company’s February forecast, even as sales revenue declined to ¥2,328.5 billion amid structural reforms in petrochemicals and ICT. For FY2026, the company forecasts core operating income of ¥215.0 billion and net income of ¥70.0 billion, with growth led by the Agro & Life Solutions and ICT & Mobility Solutions sectors.

Consolidated Results (Full-Year Actual)

Full-year consolidated results for FY2025, compared with FY2024 and against the company’s February forecast, were as follows (billions of yen unless otherwise noted):

Item	FY2024	FY2025 (Actual)	FY2025 (Forecast, Feb)	Change (YoY)
Sales Revenue	¥2,606.3 billion	¥2,328.5 billion	¥2,300.0 billion	-¥277.8 billion
Core Operating Income	¥140.5 billion	¥208.4 billion	¥200.0 billion	¥67.9 billion
Net Income Attributable to Owners of the Parent	¥38.6 billion	¥60.9 billion	¥55.0 billion	¥22.4 billion
ROE	4.1%	6.4%	5.8%	2.3pt
ROIC	2.2%	5.6%	5.3%	3.4pt
Naphtha price	¥75,600/kl	¥65,200/kl	¥64,600/kl	―
Exchange rate	¥152.62/$	¥150.67/$	¥149.03/$	―

The company states that FY2025 core operating income of ¥208.4 billion included approx. ¥80 billion in capital gains on business dispositions, with underlying business performance of approx. ¥130 billion, and describes FY2025 underlying results as a substantial improvement over FY2024 even after stripping out these disposition gains.

Segment Results

FY2025 core operating income by sector, compared with FY2024, was as follows. Agro & Life Solutions rose to ¥56.3 billion (+¥1.4 billion). ICT & Mobility Solutions fell to ¥53.0 billion (-¥17.5 billion) due to reduced shipments in display materials. Advanced Medical Solutions was ¥2.8 billion (-¥1.1 billion). Essential & Green Materials swung to ¥14.4 billion (+¥72.9 billion), driven by the sale of Petro Rabigh shares. Sumitomo Pharma rose to ¥108.4 billion (+¥73.1 billion) on the disposition of its Asia business and expanded sales of three key products. Others fell to -¥26.7 billion (-¥60.9 billion), reflecting a business disposition gain recorded in the previous fiscal year.

Segment / Company	FY2024	FY2025	Change (YoY)
Agro & Life Solutions	¥55.0 billion	¥56.3 billion	¥1.4 billion
ICT & Mobility Solutions	¥70.6 billion	¥53.0 billion	-¥17.5 billion
Advanced Medical Solutions	¥4.0 billion	¥2.8 billion	-¥1.1 billion
Essential & Green Materials	-¥58.5 billion	¥14.4 billion	¥72.9 billion
Sumitomo Pharma	¥35.3 billion	¥108.4 billion	¥73.1 billion
Others	¥34.2 billion	-¥26.7 billion	-¥60.9 billion
Total	¥140.5 billion	¥208.4 billion	¥67.9 billion

FY2026 Forecast

For FY2026, Sumitomo Chemical forecasts sales revenue of ¥2,360.0 billion (+¥31.5 billion), on sales expansion of agrochemicals, semiconductor materials, and Sumitomo Pharma; core operating income of ¥215.0 billion (+¥6.6 billion); operating income of ¥177.0 billion (+¥25.3 billion); and net income attributable to owners of the parent of ¥70.0 billion (+¥9.1 billion). ROE is forecast at 6.8% (+0.4pt) and ROIC at 5.5% (-0.1pt). The forecast assumes a naphtha price of ¥92,000/kl (versus ¥65,200/kl in FY2025 actual) and an exchange rate of ¥155.00/$ (versus ¥150.67/$ in FY2025 actual).

Item	FY2025 (Actual)	FY2026 (Forecast)	Change (YoY)
Sales Revenue	¥2,328.5 billion	¥2,360.0 billion	¥31.5 billion
Core Operating Income	¥208.4 billion	¥215.0 billion	¥6.6 billion
Operating Income	¥151.7 billion	¥177.0 billion	¥25.3 billion
Net Income Attributable to Owners of the Parent	¥60.9 billion	¥70.0 billion	¥9.1 billion
ROE	6.4%	6.8%	0.4pt
ROIC	5.6%	5.5%	-0.1pt
Naphtha price	¥65,200/kl	¥92,000/kl	―
Exchange rate	¥150.67/$	¥155.00/$	―

By sector, FY2026 core operating income is forecast as follows versus FY2025: Agro & Life Solutions ¥65.0 billion (+¥8.7 billion), on expanded overseas agrichemical sales; ICT & Mobility Solutions ¥55.0 billion (+¥2.0 billion), as increased semiconductor material shipments outweigh higher fixed costs; Advanced Medical Solutions ¥3.0 billion (+¥0.2 billion); Essential & Green Materials ¥20.0 billion (+¥5.6 billion), on improved refinery margin at Petro Rabigh; Sumitomo Pharma ¥94.0 billion (-¥14.4 billion), reflecting the prior-year Asia business disposition gain; and Others -¥22.0 billion (+¥4.7 billion).

The company states that FY2026 guidance for underlying business performance calls for solid growth in earnings power, with underlying performance of approx. ¥210 billion within the ¥215.0 billion core operating income forecast, and that it aims to achieve its mid-term targets one year early.

Shareholder Returns

The company states: “For FY2026, we forecast an increase in the annual dividend to 16 yen per share. Aim to achieve an annual dividend of 24 yen per share at an early stage in the future.”

Medium-Term Plan / Topics

Sumitomo Chemical is shifting its portfolio toward growth drivers. Core operating income was ¥262.7 billion in FY2017 (a combined total of the former IT-related Chemicals Sector and the former Energy & Functional Materials Sector), of which growth drivers (Agro & Life Solutions and ICT & Mobility Solutions) accounted for 29%. In the FY2026 forecast of ¥215.0 billion core operating income, growth drivers are expected to account for 56% — nearly double their earlier share.

Under its new investment management process, the company’s FY2025-27 plan for capital expenditures, loans and investments totals ¥450.0 billion, comprising a strategic investments target of ¥230.0 billion and a maintenance capex target of ¥220.0 billion. FY2025 actual results were ¥70.0 billion in strategic investments (approx. 75% allocated to growth drivers) and ¥73.0 billion in maintenance capex.

On parent-subsidiary listing, the company sold shares in Shinto Paint, Sumitomo Bakelite, and Inabata in FY2024, made Tanaka Chemical a wholly owned subsidiary in FY2025, and plans to make Koei Chemical a wholly owned subsidiary in FY2026. Versus the end of FY2023, the company states it has reorganized approx. 60% of listed subsidiaries and affiliates in Japan.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.