Sojitz Corporation (2768): FY2025 Results Summary — Profit Dips on Structural Reforms; JPY130.0bn Targeted for FY2026

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

Sojitz Corporation (2768), a general trading company, announced its financial results for the fiscal year ended March 31, 2026 (which the company refers to as FY2025) on May 1, 2026. Consolidated profit for the year was JPY 103.6 billion, a decrease of JPY 7.0 billion year on year and 90% of the full-year forecast of JPY 115.0 billion. While earnings expanded in the Energy Solutions & Healthcare Division, chemicals trading, defense-related, and marine products businesses, temporary negative impacts from structural reforms in the Automotive Division and the coking coal business in Australia weighed on results. For the fiscal year ending March 31, 2027 (FY2026), the company forecasts profit for the year of JPY 130.0 billion, an increase of JPY 26.4 billion, or 25% year on year.

Consolidated Results (Full-Year Actual)

Profit for the year (attributable to owners of the Company) was JPY 103.6 billion, down JPY 7.0 billion year on year and below the full-year forecast of JPY 115.0 billion (90% achievement). Core operating cash flow was JPY 136.4 billion, an increase of JPY 1.2 billion year on year, achieving 97% progress against the full-year forecast. ROE was 10.1%, below the expected 11% level and down from 11.7% in FY24. The annual dividend was JPY 165 per share, up JPY 15 from FY24.

Item (BN JPY unless noted)	FY25	FY24	Difference	FY26 Forecast
Profit for the year	103.6	110.6	(7.0)	130.0
Core operating cash flow	136.4	135.2	+1.2	150.0
Core cash flow	(27.9)	(31.8)	+3.9	(11.0)
Basic earnings per share (Yen)	495	514	(19)	623
ROE (%)	10.1	11.7	(1.6)	12
ROA (%)	3.1	3.7	(0.6)	3.5
Dividends per share (Yen)	165	150	+15	180

On the profit and loss statement, revenue increased by JPY 247.7 billion year on year to JPY 2,757.4 billion. Gross profit increased by JPY 20.7 billion year on year to JPY 367.5 billion, with newly consolidated companies contributing significantly to profit growth, partially offset by declines in the coking coal business in Australia and others. Selling, general and administrative expenses increased by JPY 35.2 billion year on year, around 90% of which was due to newly consolidated subsidiaries. Impairment losses were recognized in the Australian metallurgical coal and used car sales businesses as part of structural reforms, along with gains from the partial sale of the Sakura Internet stake.

Item (BN JPY)	FY25	FY24	Difference
Revenue	2,757.4	2,509.7	+247.7
Gross profit	367.5	346.8	+20.7
SG&A expenses	(305.1)	(269.9)	(35.2)
Share of profit (loss) of investments accounted for using the equity method	44.0	49.6	(5.6)
Profit before tax	115.6	135.3	(19.7)
Profit for the year	103.6	110.6	(7.0)
Core earnings	102.4	122.7	(20.3)

On the balance sheet, total assets increased by JPY 560.7 billion from the previous fiscal year-end to JPY 3,648.0 billion, driven by growth in operating assets related to aviation, defense, tobacco, and marine products, as well as newly consolidated subsidiaries and foreign exchange translation effects. Total equity attributable to owners of the Company increased by JPY 121.4 billion to JPY 1,090.4 billion. Net DER was 0.95 times, and the equity ratio was 29.9%.

Segment Results

By segment, increases in net profit were driven primarily by the Aerospace, Transportation & Infrastructure Division, infrastructure-related businesses within the Energy Solutions & Healthcare Division, and the Chemicals Division. In the Retail & Consumer Services Division, profits from co-creation with external partners also contributed to earnings growth. On the other hand, the Automotive Division recorded a loss due to structural reforms, while the Metals, Mineral Resources & Recycling Division saw a significant decline in profit due to lower market prices, low production efficiency, and impairment losses in the Australia coking coal business. In the Others segment, gains from the partial sale of shares in SAKURA internet Inc. were recorded as part of structural reforms. Note: effective April 1, 2025, Sojitz Group reorganized several segments and changed its reporting figures for FY2024.

Segment (profit for the year, BN JPY)	FY25	FY24	Difference
Automotive	(5.3)	1.6	(6.9)
Aerospace, Transportation & Infrastructure	15.5	12.2	+3.3
Energy Solutions & Healthcare	31.9	22.6	+9.3
Metals, Mineral Resources & Recycling	4.8	29.2	(24.4)
Chemicals	20.0	20.0	0.0
Consumer Industry & Agriculture Business	5.9	6.4	(0.5)
Retail & Consumer Service	14.2	11.4	+2.8
Others	16.6	7.2	+9.4
Total	103.6	110.6	(7.0)

FY2026 Forecast

For the fiscal year ending March 31, 2027 (FY2026), Sojitz forecasts profit for the year of JPY 130.0 billion, an increase of JPY 26.4 billion, driven by the turnaround of underperforming businesses through restructuring and earnings contributions from new investments. Gross profit is forecast at JPY 440.0 billion, core operating cash flow at JPY 150.0 billion, and ROE is targeted at 12%. The company notes that the segment forecast reflects a simplified reclassification into the new organizational structure effective April 1, 2026 (the FY25 figures below are restated on that basis), and that limited impact is expected from the current situation in the Middle East.

Segment (profit for the year, BN JPY)	FY26 Forecast	FY25
Automotive	5.0	(5.3)
Aerospace & Transportation Infrastructure	19.0	15.5
Energy Solutions & Public Infrastructure	28.0	32.3
Metals, Mineral Resources & Recycling	22.0	3.8
Chemicals	22.0	21.0
Consumer Industry & Agriculture Business	13.0	8.6
Retail & Consumer Service	15.0	11.0
Others	6.0	16.7
Total	130.0	103.6

Shareholder Returns

The shareholder returns policy remains unchanged: a progressive, stable, and predictable dividend will be maintained, with approximately 30% of core operating cash flow over the three years of Medium-term Management Plan 2026 allocated to shareholder returns, and flexible stock repurchases in case of surplus cash flow. A year-end dividend of JPY 82.5 per share for FY25 will be paid as planned, bringing the annual dividend to JPY 165 per share. The dividend forecast for the fiscal year ending March 31, 2027 is JPY 180 per share annually, a 9% increase compared to FY25. A stock repurchase of JPY 10.0 billion (2.8 million shares; repurchase period May 2, 2025 to July 31, 2025) was completed in July 2025, and 15 million shares of treasury stock were cancelled on August 29, 2025, reducing the total number of shares issued from 225 million to 210 million.

Medium-Term Plan / Topics

The fiscal year ended March 31, 2026 was the second year of Medium-term Management Plan 2026 (“MTP2026”) “Set for Next Stage”. Against the plan’s financial targets of profit for the year above JPY 120.0 billion (3-year average) and ROE above 12%, FY25 results were JPY 103.6 billion and 10.1%, both below the full-year targets. For the “Next Stage”, Sojitz targets profit for the year of JPY 200.0 billion, ROE of 15%, and market capitalization of JPY 2 trillion, under the vision for 2030 of “Becoming a company that constantly cultivates business and human capital”.

Growth initiatives under the “KATI” model are focused on building revenue-generating clusters of businesses (“Katamari”), including energy solutions businesses in the U.S. and Australia (acquisitions of McClure Company, Freestate Electric, LLC, Ellis Air Group Pty Ltd and Climatech Group Holdings Pty Ltd.), the infrastructure development business in Australia (investment in and acquisition of Capella Capital Partnership), and chemical businesses (acquisition of NIPPON A&L INC.). Aggregate new investments under MTP2026 reached JPY 280.0 billion over the first two years against an investment plan of approximately JPY 600.0 billion, with FY25 new investments of JPY 177.0 billion. Structural reforms addressed the coking coal business in Australia and the used car business in Australia, among others, and for the businesses identified for review or withdrawal under MTP2026, exit strategies have already been defined and will be completed in the early part of the fiscal year ended March 31, 2027.

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.