Tosoh Corporation (4042): FY2025 Results Summary — Net Income Falls on Tosoh SMD Impairment; Next-Year Forecast Undetermined

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Note: Tosoh Corporation labels the fiscal year ended March 31, 2026 (April 1, 2025 – March 31, 2026) as “Fiscal Year 2026 (FY2026)” and the year ending March 31, 2027 as “FY2027.” This article follows the company’s labels in the text and tables below, while this site classifies the period as FY2025.

Tosoh Corporation announced its consolidated results for FY2026 (the fiscal year ended March 31, 2026) on May 13, 2026, based on its English-language presentation “Cumulative Financial Results for Fiscal Year 2026.” Net sales came to 1,019.9 billion yen, down 43.5 billion yen from 1,063.4 billion yen a year earlier, as selling prices declined due to the drop in naphtha prices and overseas market conditions for major products, while sales grew in the Engineering Group. Operating income declined 3.4 billion yen to 95.5 billion yen, and ordinary income rose 3.7 billion yen to 106.8 billion yen. Income attributable to owners of parent fell 16.4 billion yen to 41.6 billion yen, reflecting the recognition of an impairment loss on fixed assets at Tosoh SMD, Inc.

Consolidated Results (Full-Year Actual)

Operating income decreased as improved terms of trade — backed by lower prices in raw materials and fuels, including naphtha and coal — were offset by unfavorable inventory fluctuations and increased fixed costs. In non-operating income/expenses, foreign exchange gains/losses improved from -1.6 billion yen to 6.6 billion yen, lifting ordinary income to 106.8 billion yen. In extraordinary income/losses, impairment losses widened from -1.6 billion yen to -19.6 billion yen. Figures below are in billions of yen unless otherwise noted.

Item	FY2025	FY2026	Change
Net sales	1,063.4	1,019.9	-43.5
Operating income	98.9	95.5	-3.4
Ordinary income	103.0	106.8	3.7
Income attributable to owners of parent	58.0	41.6	-16.4
Exchange rate (yen/US$, average TTM)	152.6	150.7	-1.9
Domestic naphtha price (yen/KL)	75,650	65,225	-10,425

Key indicators (billion yen, except where noted): capital expenditures were 72.7 (FY2025: 81.2), depreciation 46.2 (45.7), R&D expenses 23.0 (22.1), and interest-bearing liabilities 235.1 (185.8; includes lease obligations). The equity ratio was 59.0% (62.3%), and the number of employees stood at 14,850 (14,813).

Key Indicator	FY2025	FY2026	Change
Capital expenditures	81.2	72.7	-8.5
Depreciation	45.7	46.2	0.5
R&D expenses	22.1	23.0	0.8
Interest-bearing liabilities	185.8	235.1	49.3
Equity ratio (%)	62.3	59.0	-3.3

Segment Results

By business segment (billion yen): Petrochemical net sales fell to 169.7 with operating income of 9.7, as ethylene, propylene, and cumene shipments decreased and selling prices declined on lower naphtha prices; operating income was also hit by unfavorable inventory fluctuations and increased fixed costs. Chlor-alkali net sales fell to 346.0 with operating income of 1.9, as caustic soda and vinyl chloride monomer (VCM) shipments decreased due to lower production volume from extended scheduled maintenance at the Nanyo Complex. Specialty net sales rose to 272.9 with operating income of 39.9, helped by higher shipments of high-silica zeolite (HSZ) and zirconia, higher bromine market prices, and improved terms of trade. Engineering net sales rose to 186.4 with operating income of 40.4 on steady progress in semiconductor-related water treatment plant projects in Japan, Taiwan, and the U.S.

Segment	Net Sales FY2025	Net Sales FY2026	Change	Operating Income FY2025	Operating Income FY2026	Change
Petrochemical	204.8	169.7	-35.0	14.3	9.7	-4.6
Chlor-alkali	373.4	346.0	-27.5	9.5	1.9	-7.6
Specialty	270.5	272.9	2.4	38.6	39.9	1.3
Engineering	169.3	186.4	17.1	33.6	40.4	6.7
Other	45.4	44.9	-0.5	2.9	3.6	0.7
Total	1,063.4	1,019.9	-43.5	98.9	95.5	-3.4

FY2027 Forecast

The results forecast for FY2027 (the fiscal year ending March 31, 2027) is currently undetermined. The company states that, due to the deterioration of the situation in the Middle East, there remain numerous uncertainties at this time — including future production plans, raw materials and fuels costs, and changes in demand — making it difficult to make a reasonable forecast under these circumstances. Tosoh says it will promptly disclose its forecast once it becomes possible to make a reasonable estimate.

Shareholder Returns

Tosoh paid total dividends of 100.00 yen per share for FY2026 (interim 50.00 yen, year-end 50.00 yen), unchanged from FY2025, for a payout ratio of 75.5%. Under its shareholder return policy for FY2026–2028, the company sets an annual dividend of 100 yen per share as a minimum and, if the dividend payout ratio is less than 50%, will raise the total return ratio to 50% through share buybacks, with 50 billion yen in share buybacks over three years as additional shareholder returns. The company acquired 25.0 billion yen of its own shares in FY2026 and will continue to consider the timing of the additional repurchase of the remaining 25.0 billion yen. For FY2027, the company forecasts annual dividends of 100 yen per share.

Item	FY2025	FY2026	FY2027 (Forecast)
Interim dividend (yen)	50.00	50.00	50.00
Year-end dividend (yen)	50.00	50.00	50.00
Total dividends (yen)	100.00	100.00	100.00
Basic earnings per share (yen)	182.13	132.40	–
Payout ratio (%)	54.9	75.5	–

Topics and Change in Segment Classification

Topics highlighted in the presentation include a production capacity increase for sputtering targets (December 2025), construction of a biomass-fired power plant (May 2026), planned production capacity increases for separation and purification media (spring 2026 and spring 2027), a planned production capacity increase for hexamethylene diisocyanate (HDI) derivatives (summer 2026), planned construction of a new crude MDI splitter in Vietnam (spring 2027), and a planned production capacity increase for chloroprene rubber (spring 2030).

Starting FY2027, Tosoh will change its segment classification: the current Petrochemical, Chlor-alkali, Specialty, and Engineering segments will be reorganized into Basic Chemicals, Value-Added Chemicals, Bioscience, Advanced Materials, and Water Treatment. Under the medium-term business plan’s business portfolio view, FY2026 net sales were 590.6 billion yen for the Chemical Chain Business (FY2025: 652.5 billion yen) and 374.9 billion yen for the Advanced Technologies Business (358.3 billion yen), with operating income of 25.2 billion yen (35.8 billion yen) and 64.0 billion yen (57.7 billion yen), respectively.

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.