DOWA HOLDINGS (5714): FY2025 Results Summary — Record Net Income of 62.4 Billion Yen on Higher Metal Prices

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

DOWA HOLDINGS CO., LTD. presented its FY2025 results (the fiscal year ended March 2026) at its Corporate Strategy Briefing on May 25, 2026. FY2025 recorded higher net sales and operating profit, ordinary profit year on year, driven by factors such as higher metal prices, and profit attributable to owners of parent reached a record high of 62.4 billion yen. Net sales were 745.4 billion yen, operating profit 34.1 billion yen and ordinary profit 54.3 billion yen. For FY2026, the company expects net sales, operating profit and ordinary profit to increase compared with the previous fiscal year, with ordinary profit forecast at 80.0 billion yen.

Consolidated Results (Full-Year Actual)

On the materials’ basis of billion yen, net sales rose 66.7 to 745.4, operating profit rose 1.9 to 34.1, and ordinary profit rose 10.7 to 54.3. Profit attributable to owners of parent rose 35.3 to 62.4, which the company describes as a record high. The “Year on Year” column below is the change from the previous fiscal year as presented in the materials, not the prior-year level.

Item (billion yen)	FY2025 Result	Year on Year
Net Sales	745.4	+66.7
Operating Profit	34.1	+1.9
Ordinary Profit	54.3	+10.7
Profit attributable to owners of parent	62.4	+35.3

In the factor analysis of the ordinary profit change from FY2025 to FY2026, the materials list higher sales volume factors of +10.2 and lower sales volume factors of (4.6). Within the higher sales volume factors, Environmental Management & Recycling contributes +1.4 (hazardous waste +0.4, overseas business +0.6), Nonferrous Metals +3.5 (increase in free metal income due to increased throughput +1.7), Electronic Materials +1.9 (fuel cell materials +0.6, price revisions +0.4), Metal Processing +2.7 and Heat Treatment +0.7. Within the lower sales volume factors, Environmental Management & Recycling is (1.3) from PCB waste treatment including lower gains on scrap sales, and Electronic Materials is (2.8) including income from the sale of samples of (2.0).

Segment Results

Ordinary profit by segment is shown below in billion yen. All five reporting segments increased ordinary profit in FY2025. Nonferrous Metals was the largest contributor at 19.6 (+2.5), followed by Environmental Management & Recycling at 16.5 (+1.5) and Metal Processing at 9.7 (+3.8). Electronic Materials returned to 1.1 (+0.8) as the turnaround progressed. For FY2026, Nonferrous Metals is forecast to jump to 53.0 (+33.3), while the other four segments are forecast to decline.

Segment (billion yen)	FY2025 Result	Year on Year	FY2026 Forecasts	Year on Year	FY2027 Medium-term Plan
Environmental Management & Recycling	16.5	+1.5	14.5	(2.0)	16.0
Nonferrous Metals	19.6	+2.5	53.0	+33.3	23.5
Electronic Materials	1.1	+0.8	2.5	+1.3	6.0
Metal Processing	9.7	+3.8	7.1	(2.6)	8.5
Heat Treatment	2.7	+0.5	2.3	(0.4)	4.0
Other/ Eliminations	4.4	+1.4	0.6	(3.8)	2.0
Ordinary Profit (total)	54.3	+10.7	80.0	+25.6	60.0

For Nonferrous Metals, the materials attribute the FY2026 increase in part to one-off factors of inventory valuation +4.9 (lower of cost or market method +4.0, with FY2025 at (4.0) and FY2026 at zero; hedging transactions +0.9, with FY2025 at (0.9) and FY2026 at zero) and to equity-method profit from overseas zinc mines of +11.6. Stated business strategies from FY2026 onward include normalizing feed supply to Akita Zinc by enabling year-round operation at the Tizapa Mine, accelerating improvements in operating levels following the early completion of major maintenance at Kosaka Smelting and Refining, and increasing the processing volume of feed materials at Nippon PGM.

In Environmental Management & Recycling, the materials note that PCB waste, which faces a processing deadline in March 2027, is decreasing in volume as expected, and that the company will pursue business domain expansion and other measures to improve profitability. Cited initiatives include a strategic partnership agreement concluded with Nippon Light Metal Company in the metal recycling field in April 2026, and a joint study with Kuraray on resource circulation business focusing on reactivation of activated carbon begun in March 2026. In Electronic Materials, the company states that new Short-wavelength infrared LEDs/PDs launched from FY2025 2Q improved profitability, while for silver powder for solar panels it was unable to overcome the price gap in the Chinese market and will instead focus on securing share outside China and on developing new conductive powders with reduced silver content.

FY2026 Forecast

The FY2026 forecast calls for net sales of 941.0 billion yen (+195.5), operating profit of 53.0 billion yen (+18.8) and ordinary profit of 80.0 billion yen (+25.6). Profit attributable to owners of parent is forecast at 57.0 billion yen, a change of (5.4) from FY2025.

Item (billion yen)	FY2026 Forecasts	Year on Year	FY2027 Medium-term Plan
Net Sales	941.0	+195.5	–
Operating Profit	53.0	+18.8	47.0
Ordinary Profit	80.0	+25.6	60.0
Profit attributable to owners of parent	57.0	(5.4)	–

FY2026 assumptions are an exchange rate of 155.0 yen/$ (H1 and H2 assumptions both 155.0), copper at 12,000 $/t, zinc at 3,100 $/t and indium at 600 $/kg. The corresponding FY2025 full-year averages were 150.8 yen/$, copper 10,816 $/t, zinc 2,968 $/t and indium 423 $/kg. Operating profit sensitivity per year is 0.63 billion yen per +/-1 yen/$ (Nonferrous Metals 0.55 billion yen and Electronic Materials 0.08 billion yen), 0.03 billion yen per +/-100 $/t of copper, 0.46 billion yen per +/-100 $/t of zinc, and 0.07 billion yen per +/-10 $/kg of indium.

Shareholder Returns

The dividend was 368 yen for FY2025, against 150 yen for FY2024 and 130 yen for each of FY2022 and FY2023, and is set at 338 yen for FY2026. Under Capital Policy the materials describe a large dividend increase backed by gains on securities sales (payout ratio 35%), and a repurchase of own shares of approximately 10.0 billion yen carried out in February 2026. The Medium-term Plan 2027 shareholder return policy is a payout ratio of 35% / 150 yen per share, considering share buybacks.

Item	FY2024	FY2025	FY2026 Forecast	FY2027 Target
ROA	6.7 %	7.4 %	–	9% or more
ROE	7.0 %	14.6 %	–	10% or more
Dividend	150 yen	368 yen	338 yen	–

The company has also begun revalidating its optimal capital structure in order to achieve the ROE target set out in the Medium-term Plan 2027. The stated methodology is a three-step process: assess debt financing capacity on the premise of maintaining its credit rating (single-A) using publicly available rating methodologies for comparable industries; calculate total risk by computing required capital based on the risk weights of each asset and comparing it with shareholders’ equity to derive a risk buffer; and reflect the findings in capital policy, with the assessment conducted at each fiscal year-end.

Medium-Term Plan and Topics

Medium-term Plan 2027 covers FY2025-FY2027 and targets operating profit of 47.0 billion yen and ordinary profit of 60.0 billion yen in FY2027, ROA of 9% or more and ROE of 10% or more at the end of FY2027. Its themes are expanding circulation (strengthening the five core businesses, creating new cycles through partnerships within and outside the company, and developing new technologies and businesses through industry-academia collaboration) and enhancing the quality of capital across human, technological and environmental capital. In the progress assessment the company states that profits are running ahead of plan due to higher metal prices and that major initiatives of each business unit and capital policy are progressing steadily, citing business environment changes of rising precious and base metal prices with higher earnings from overseas mines, and slower EV adoption alongside expanding demand related to AI servers.

On AI-related products, the materials show a demand outlook indexed to FY2025 = 100 for Composite oxide powder used in fuel cell (generator) electrodes of 600 in FY2026, 900 in FY2027 and 2,000 in FY2030, and a demand outlook indexed to FY2025 = 100 for Information/communication-related copper alloy products used in various connectors in AI servers of 1,000 in FY2026, 2,500 in FY2027 and 5,000 in FY2030. Magnetic powder used in data storage tape is shown indexed to FY2022 = 100 at 100, 95, 92, 101, 101, 105 for FY2022 through FY2027 and 118 in FY2030. The company states it is considering capacity expansion investment for Composite oxide powder and, in the future, for the AI-server-related copper alloy products.

On climate change, the DOWA Green Action results were 22 items in FY2024 and 34 items in FY2025, against an FY2027 target of 50 items and more; the materials note that FY2025 GHG results are currently being calculated, with reported group GHG emissions of 1,646 thousand t-CO2 in FY2023 and 1,387 thousand t-CO2 in FY2024, an FY2027 target of 1,412 thousand t-CO2 and an FY2030 target of 1,200 thousand t-CO2.

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.