NOF Corporation (4403): FY2025 Results Summary — Record Highs Across the Board, Dividend Raised to ¥61

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

NOF Corporation (4403) released its financial results presentation for the fiscal year ended March 31, 2026 (which the company labels FY2025) on May 22, 2026. Net sales, operating profit, ordinary profit, and profit all reached record highs, and the annual dividend was raised to ¥61 per share, an increase of ¥16 over the previous year. For FY2026, the company plans to achieve record-high net sales, operating profit, and ordinary profit, with a forecast that incorporates the materialized impact of the increasingly strained situation in the Middle East.

Consolidated Results (Full-Year Actual)

All four headline lines — net sales, operating profit, ordinary profit, and profit attributable to owners of parent — set record highs. The operating margin was 18.4%, versus 19.0% a year earlier, and the gross margin was 34.5%, versus 35.7%. Compared with the company’s February 13 forecast, operating profit, ordinary profit, and profit all came in above plan, while net sales finished slightly below the forecast.

Item (¥100 million, except per-share)	FY2024	FY2025	Change
Net sales	2,383	2,580	197
Gross profit	852	891	39
Operating profit	453	474	21
% of net sales	19.0%	18.4%	—
Ordinary profit	466	504	38
Profit attributable to owners of parent	365	406	41
Basic earnings per share (¥)	153.9	176.3	22.5
Dividend per share (¥)	45	61	16

Segment Results

Functional Chemicals posted lower sales and profit: shipments of cosmetics-related products decreased due to inventory adjustments by some customers, and fatty acid derivatives and other items were sluggish overall, while special anti-corrosion coatings saw strong demand for automobile-related products in both domestic and overseas markets. Pharmaceuticals, Medicals and Health recorded higher sales and profit; although shipments of raw materials for DDS to certain customers were less than expected due to delays in the market expansion of launched products, the company received penalty fees based on minimum purchase amount agreements, and performance remained steady overall. Explosives & Propulsion grew sharply on defense-related products, recording revenue and expenses for certain contracts related to rapid acquisition, while shipments of products for rockets remained firm.

Segment	Metric (¥100 million)	FY2024	FY2025	Change
Functional Chemicals	Net sales	1,509	1,458	(52)
Functional Chemicals	Operating profit	298	268	(30)
Pharmaceuticals, Medicals and Health	Net sales	480	499	19
Pharmaceuticals, Medicals and Health	Operating profit	157	158	1
Explosives & Propulsion	Net sales	388	617	229
Explosives & Propulsion	Operating profit	31	80	48

FY2026 Forecast

For FY2026, NOF forecasts net sales growth of 23.7%, operating profit growth of 5.5%, and ordinary profit growth of 1.3% — record highs for all three — while profit attributable to owners of parent is expected to decline 3.8%, with basic earnings per share of ¥169.6. The assumed exchange rates are ¥150 to the US dollar and ¥180 to the euro (FY2025 actual: ¥150 and ¥174). By segment, Explosives & Propulsion is expected to drive growth, with revenue and expenses recorded based on progress in certain transactions related to rapid acquisition and an increase in shipments of rocket products due to the resumption of H3 launches. Functional Chemicals expects higher sales but lower profit, incorporating the impact of the strained situation in the Middle East on raw material and fuel prices and the supply chain. Pharmaceuticals, Medicals and Health expects the impact of delayed market expansion of commercialized products for raw materials for DDS to continue, alongside higher fixed costs including depreciation for the LS Aichi Plant.

Item (¥100 million, except per-share)	FY2025 Actual	FY2026 Forecast	Change
Net sales	2,580	3,190	+23.7%
Operating profit	474	500	+5.5%
% of net sales	18.4%	15.7%	—
Ordinary profit	504	510	+1.3%
Profit attributable to owners of parent	406	390	(3.8%)
Basic earnings per share (¥)	176.3	169.6	—
Dividend per share (¥)	61	70	—

Segment	Metric (¥100 million)	FY2025 Actual	FY2026 Forecast	Change
Functional Chemicals	Net sales	1,458	1,555	97
Functional Chemicals	Operating profit	268	264	(4)
Pharmaceuticals, Medicals and Health	Net sales	499	502	3
Pharmaceuticals, Medicals and Health	Operating profit	158	123	(35)
Explosives & Propulsion	Net sales	617	1,128	511
Explosives & Propulsion	Operating profit	80	154	74

Shareholder Returns

The FY2025 annual dividend was ¥61 per share, up ¥16 from the previous year, for a consolidated payout ratio of 34.6%. The annual dividend forecast for FY2026 is ¥70 per share. Under the 2028 Mid-term Plan, NOF aims for progressive dividends over the medium to long term based on maintaining stable dividends, with a target dividend payout ratio of about 40% and a target total return ratio of 70% or more, while considering agile share repurchases with the aim of improving capital efficiency. The company states that it forecasts medium-term free cash flow and determines the level of shareholder returns while balancing financial soundness and growth investments.

Medium-Term Plan / Topics

ROE was 14.1% in FY2025, achieving the target of 12% or more set in the 2025 Mid-term Management Plan; the ROE forecast for FY2026 is 13.1%. In the 2028 Mid-term Plan the target was raised to 14% or more, and a new ROE target of 15% or more was set for FY2030. On cross-shareholdings, 9 stocks were reduced and 6 stocks were partially sold in FY2025, bringing the ratio of cross-shareholdings to consolidated net assets down to 14.3% and achieving the 2025 Mid-term Plan target of 15% or less; under the 2028 Mid-term Plan, the company will pursue further reductions with the aim of achieving a ratio of 10% or less.

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.