Taiheiyo Cement (5233): FY2025 Results Summary — Domestic Cement Profit Jumps, Overseas Decline and Impairment Weigh on Net Profit

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

Taiheiyo Cement Corporation posted net sales of 898,441 million yen for the fiscal year ended March 31, 2026, up 2,147 million yen year on year, while operating profit fell 3,130 million yen to 74,620 million yen. Ordinary profit was 75,087 million yen, down 287 million yen, and profit attributable to owners of parent declined 32,027 million yen to 25,401 million yen, partly due to impairment losses recorded at the company’s Philippine subsidiary. In domestic cement, operating profit increased due to the effect of price hikes and cost improvement, while operating profit decreased at overseas subsidiaries, etc. The dividend is scheduled at 100 yen per share, an increase of 20 yen.

Note: Taiheiyo Cement labels the fiscal year ended March 31, 2026 as “FY2026” in its disclosure materials. Under this site’s convention the most recent completed fiscal year is classified as FY2025 in the title and URL, but all labels, tables and figures below are kept exactly as presented in the company’s materials.

Consolidated Results (Full-Year Actual)

Net sales edged up while operating profit declined. Non-operating income and expenses improved by 2,843 million yen to a net 467 million yen, so ordinary profit was almost flat. Below the ordinary line, extraordinary income and losses swung to a net loss of 30,560 million yen from a net loss of 753 million yen a year earlier, and profit before income taxes fell to 44,527 million yen from 74,621 million yen.

Item (Million yen)	FY2025	FY2026	Change
Net sales	896,295	898,441	+2,147
Operating profit	77,750	74,620	(3,130)
Non-operating income and expenses	(2,376)	467	+2,843
Ordinary profit	75,374	75,087	(287)
Extraordinary income and losses	(753)	(30,560)	(29,807)
Profit before income taxes	74,621	44,527	(30,094)
Income taxes	15,809	17,633	+1,824
Profit attributable to non-controlling interests	1,384	1,493	+109
Profit attributable to owners of parent	57,428	25,401	(32,027)

Basic earnings per share was 227.9 yen and return on equity was 3.8%, while net assets per share rose to 6,098.1 yen and the capital adequacy ratio improved to 46.0%. The average exchange rate was 149.6 yen to the US dollar and the average procurement price of imported coal, etc. for domestic use was 130 US dollars per tonne (C&F).

Main indicators / Environmental factors	FY2025	FY2026	Change
Operating profit to net sales ratio (%)	8.7	8.3	(0.4)
Basic earnings per share (Yen)	502.5	227.9	(274.6)
Net assets per share (Yen)	5,758.9	6,098.1	+339.3
Return on equity (ROE) (%)	9.5	3.8	(5.7)
Return on invested capital (ROIC) (%)	5.4	4.9	(0.5)
Capital adequacy ratio (%)	45.1	46.0	+0.9
Net debt/equity ratio (Times)	0.49	0.48	(0.01)
Average exchange rate (Yen/US$)	151.7	149.6	(2.1)
Average procurement price of imported coal, etc. for domestic (C&F $/t)	150	130	(20)

Segment Results

Domestic cement net sales rose 13,340 million yen to 336,697 million yen and operating profit rose 11,921 million yen to 27,977 million yen. Domestic sales volume fell 1,156 thousand tonnes to 11,173 thousand tonnes as demand declined on the broader adoption of the two-day weekend system by ready-mixed concrete cooperatives and reduced working hours at construction sites caused by heatstroke prevention measures and bad weather conditions, while export volume rose 295 thousand tonnes to 3,320 thousand tonnes. Overseas Subsidiaries, etc. saw net sales fall 13,584 million yen to 331,213 million yen and operating profit fall 17,014 million yen to 21,355 million yen. The Mineral Resources, Environmental and Other businesses all increased operating profit, while the Construction Materials Business declined.

Segment (Million yen)	Net sales FY2025	Net sales FY2026	Change	Operating profit FY2025	Operating profit FY2026	Change
Cement Business: Domestic	323,358	336,697	+13,340	16,056	27,977	+11,921
Cement Business: Overseas Subsidiaries, etc.	344,796	331,213	(13,584)	38,370	21,355	(17,014)
Cement Business: Total	668,154	667,910	(244)	54,426	49,332	(5,094)
Mineral Resources Business	88,246	90,855	+2,608	9,616	10,045	+429
Environmental Business	80,866	81,782	+916	8,972	9,262	+290
Construction Materials Business	44,300	43,427	(873)	2,363	1,891	(472)
Other	78,592	80,519	+1,926	3,935	4,193	+258
Total	960,158	964,493	+4,335	79,312	74,723	(4,589)
Elimination	(63,863)	(66,052)	(2,188)	(1,563)	(103)	+1,459
Consolidated Total	896,295	898,441	+2,147	77,750	74,620	(3,130)

In the U.S.A., demand was affected by bad weather conditions and the slowdown in the private sector, etc. as interest rates remained high; sales volumes of cement and ready-mixed concrete declined despite efforts to implement price increases and cost reduction measures, while aggregates sales volume increased due to the impact of acquisitions. In Asia and others, Vietnam secured profit at a level comparable to the previous year, supported by robust domestic demand, while profitability in the Philippines deteriorated due to falling sales prices, etc. caused by the continued influx of low-priced imports. The impact of foreign exchange fluctuations on the change in overseas subsidiaries was net sales of -63 hundred million yen and operating profit of -4 hundred million yen.

Overseas Subsidiaries, etc.	FY2025	FY2026	Change
U.S.A. — Cement (Thousand t)	6,123	5,888	(235)
U.S.A. — Ready-mixed concrete (Thousand cy)	5,479	4,722	(757)
U.S.A. — Aggregates (Thousand t)	11,512	12,246	+734
U.S.A. — Net sales (Hundred million yen)	2,976	2,825	(151)
U.S.A. — Net sales (Million $)	1,962	1,888	(73)
U.S.A. — Operating profit (Hundred million yen)	410	267	(143)
U.S.A. — Operating profit (Million $)	270	178	(92)
Asia and others — Cement (Thousand t)	6,669	7,289	+620
Asia and others — Net sales (Hundred million yen)	534	549	+15
Asia and others — Operating profit (Hundred million yen)	(12)	(37)	(25)

Forecast for Fiscal 2027 (Year Ending March 31, 2027)

The company expects a year-on-year increase in sales and profit, assuming that the impact of the situation in the Middle East persists throughout the fiscal year. The preconditions are domestic cement demand of 2,900 ten thousand tonnes against 3,053 in FY2026, an average procurement price of imported coal, etc. for domestic use of 155 US dollars per tonne (C&F) and an average exchange rate of 157.0 yen to the US dollar. Sensitivity is stated as a 30 million yen positive impact on operating profit for each 1 yen drop in foreign exchange.

Item (Hundred million yen)	FY2026 Actual	FY2027 Forecast	Change
Net sales	8,984	10,270	+1,286
Operating profit	746	760	+14
Non-operating income and expenses	5	(60)	(65)
Ordinary profit	751	700	(51)
Extraordinary income and losses	(306)	(50)	+256
Profit before income taxes	445	650	+205
Income taxes	176	155	(21)
Profit attributable to non-controlling interests	15	15	+0
Profit attributable to owners of parent	254	480	+226

By segment, domestic cement net sales are forecast at 3,680 hundred million yen with operating profit of 170 hundred million yen: sales volume is expected to increase by reflecting the impact of the transfer of business rights from Tokuyama Corporation from the second half, but operating profit is expected to decrease because of cost increases driven by the situation in the Middle East and higher fixed costs. Overseas Subsidiaries, etc. are forecast at net sales of 3,970 hundred million yen and operating profit of 317 hundred million yen, helped by the acquisition effects in the U.S. from the second half and improved performance in the Philippines. For the first half of fiscal 2027 the company forecasts net sales of 4,700 hundred million yen, operating profit of 270 hundred million yen, ordinary profit of 255 hundred million yen and profit attributable to owners of parent of 140 hundred million yen.

Shareholder Returns

The shareholder return policy in the 26 Medium-Term Management Plan sets a total return ratio of 33% or more, maintaining steady dividends of 80 yen or more per share, and agile acquisition of treasury shares. In fiscal 2026 the company schedules an increase of 20 yen to 100 yen per share (including interim dividends of 50 yen per share), and in fiscal 2027 it plans a further increase of 20 yen to 120 yen per share (including interim dividends of 60 yen per share). The total dividend amount was 112 hundred million yen in fiscal 2026 with a share buyback of 0, giving a total return ratio of 44.1%; for fiscal 2027 the company plans a total dividend amount of 133 hundred million yen and a share buyback of 100 hundred million yen, for a total return ratio of 48.5%. The total shareholder return ratio over the three years of the 26 MTP is expected to be 44.8%.

Topics

The company will acquire the cement sales business within the cement business operated by Tokuyama; the target business will be carved out to a shell company, and Taiheiyo Cement will acquire the shares of the shell company from Tokuyama. In the U.S., as part of the growth strategy set out in the 26 Medium-Term Management Plan, the company is acquiring ready-mixed concrete business assets at an acquisition price of 712 million USD during 1H 2026, subject to the fulfillment of conditions precedent including clearance by relevant authorities. The acquired assets comprise 28 ready-mixed concrete plants located in Northern California, 2 terminals, etc., and 13 ready-mixed concrete plants located in Southern California, etc.; net sales of the relevant business segment were 524 million USD in FY2025. On cross-shareholdings, approximately 6% was executed out of the approximately 20% planned for the FY26 MTP period, including a partial sale of shares in A&A Material and other holdings.

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.