Daicel Corporation (4202): FY2025 Results Summary — Profit Down Sharply on COC Second-Plant Impairment

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Daicel Corporation announced its consolidated financial results for the fiscal year ended March 31, 2026 (presentation dated May 12, 2026). Net sales were 579.6 bn yen (-1.2% YoY) and operating income was 42.1 bn yen (-31.0% YoY), as lower acetate tow sales in the Materials business and increased depreciation from the new Engineering Plastics plant outweighed higher airbag inflator volumes in the Safety business. Profit attributable to owners of parent fell to 10.2 bn yen (-79.4% YoY), mainly reflecting an impairment loss of 32.4 billion yen on the second cyclic olefin copolymer (COC) plant under construction in Germany. Note: the company labels the fiscal year ended March 31, 2026 as “FY2026/3”; this site classifies it as FY2025, and the tables below follow the company’s labels.

Consolidated Results (Full-Year Actual)

EBITDA was 85.4 bn yen (FY2025/3: 102.4 bn yen, -16.6% YoY per the company’s summary) and ROE was 2.8% (FY2025/3: 13.8%). EPS was 38.75 yen (FY2025/3: 181.44 yen). Results landed slightly above the forecasts announced on March 26, 2026 (net sales 576.0, operating income 41.0, ordinary income 43.0, profit 10.0, in billion yen). The average exchange rate was 151 yen/USD versus 153 yen/USD in the prior year.

Item (Billion Yen)	FY2026/3 Results	FY2025/3 Results	Y on Y	Change %
Net Sales	579.6	586.5	-6.9	-1.2%
Operating Income	42.1	61.0	-18.9	-31.0%
Ordinary Income	45.1	62.3	-17.2	-27.6%
Profit Attributable to Owners of Parent	10.2	49.5	-39.3	-79.4%
EBITDA	85.4	102.4	–	–
EPS (Yen)	38.75	181.44	–	–

Segment Results

The Safety segment grew on higher airbag inflator sales volume, mainly in China and India, with operating income up 55.0% on productivity improvement at a production site in North America and cost reduction. The Materials segment declined sharply as acetate tow sales volume decreased due to inventory adjustments mainly at local manufacturers and acetic acid market conditions weakened. Engineering Plastics grew sales on LCP demand for AI server applications, but operating income fell 29.1% on increased depreciation expenses and shut-down maintenance cost. Smart returned to operating profit, and Medical / Healthcare grew on strong sales of health food ingredients such as equol.

Segment (Billion Yen)	Net Sales FY2026/3	Net Sales FY2025/3	Change %	Operating Income FY2026/3	Operating Income FY2025/3
Medical / Healthcare	16.2	14.4	+12.4%	0.4	0.3
Smart	37.7	37.3	+1.2%	0.5	-0.8
Safety	104.2	97.6	+6.7%	6.1	3.9
Materials	161.3	183.4	-12.0%	15.0	29.6
Engineering Plastics	254.7	248.0	+2.7%	19.2	27.0
Others	5.4	5.8	-5.5%	0.9	1.0
Total	579.6	586.5	-1.2%	42.1	61.0

Full-Year Forecast (FY2027/3)

For the fiscal year ending March 2027, Daicel forecasts net sales of 595.0 bn yen (+2.7% YoY) and operating income of 42.5 bn yen (+1.0% YoY), with profit attributable to owners of parent recovering to 32.0 bn yen (+214.3% YoY), partly because an impairment loss was recorded in the previous fiscal year. EBITDA is forecast at 87.0 bn yen and ROE at 9.1%. The assumed exchange rate is 150 yen/USD. The company notes that these forecasts do not reflect the impact of the deterioration of the situation in the Middle East. From FY2027/3 the company revises its business segments, including the new High Performance Polymers and Life Sciences segments (Polyplastics Co., Ltd. was integrated into Daicel Corporation in April 2026).

Item (Billion Yen)	FY2027/3 Forecasts	FY2026/3 Results	Change %
Net Sales	595.0	579.6	+2.7%
Operating Income	42.5	42.1	+1.0%
Ordinary Income	43.0	45.1	-4.7%
Profit Attributable to Owners of Parent	32.0	10.2	+214.3%
EBITDA	87.0	85.4	–
EPS (Yen)	125.30	38.75	–

Segment (New Classification, Billion Yen)	Net Sales FY2027/3 Forecasts	Net Sales FY2026/3 Results	Operating Income FY2027/3 Forecasts	Operating Income FY2026/3 Results
High Performance Polymers	229.0	221.5	21.5	19.1
Materials	194.0	195.9	10.7	14.8
Safety	109.5	104.2	7.7	6.1
Smart	39.0	37.7	1.0	0.5
Life Sciences	21.5	18.4	1.3	0.9
Others	2.0	2.0	0.3	0.7
Total	595.0	579.6	42.5	42.1

Shareholder Returns

For FY2026/3, Daicel paid an interim dividend of 30 yen per share and plans a year-end dividend of 30 yen per share, for annual dividends of 60 yen per share — the same as the previous fiscal year and unchanged from the previous forecast. The company also purchased 10.09 million of its own shares for 13.7 billion yen (period of purchase: from November 2025 to March 2026). The dividend payout ratio for FY2026/3 was 154.8% and the total return ratio was 288.6%, under the policy of a total return ratio of 40% or more and a dividend on equity (DOE) ratio of 4% or more. For FY2027/3, the company has decided on the cancellation of 10.8 million treasury shares; the annual dividend forecast will be disclosed on May 22, 2026, concurrently with the new Mid-term Management Strategy (the dividend policy remains unchanged).

Topics — COC Impairment and Structural Reform

As disclosed on March 26, 2026, Daicel recorded an impairment loss of 32.4 billion yen (EUR/JPY 175) on the second COC resin plant under construction at its German consolidated subsidiary TOPAS Advanced Polymers GmbH, after conservatively reassessing asset value due to delayed demand growth and increased investment from soaring construction costs. Construction is ongoing, with the aim of commencing operations during fiscal year 2027 (production capacity: 20,000 tons, versus 15,000 tons at the existing plant), and the investment payback is projected to be completed in fiscal year 2033. On portfolio reform, the company states it had completed approximately 70% of its structural reform initiatives by the end of FY2026/3, including making Toyama Filter Tow a wholly owned subsidiary (April 2025), a marketing partnership with Mitsui Chemicals for the Engineering Plastics business (January 2026), and withdrawals from the polystyrene, food/industrial containers and optical lens businesses (March 2026). Regarding the Middle East situation, the company reports no impact on plant operations as of April 30, 2026, while methanol purchase prices have risen significantly; the company uses approximately 500,000 tons of methanol annually, and a price increase of $10 per ton would result in a cost increase of approximately 700 million yen (assuming 150 yen/USD).

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.