Nippon Soda (4041): FY2025 Results Summary — Net Profit Up 21.7% on Equity-Method Gains; Stage III Plan Targets ¥20.0 Billion

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

Note: Nippon Soda’s fiscal year ends on March 31. This article covers the fiscal year ended March 31, 2026, which the company’s materials label “2026/3” (or “FY 2026/3”); this site classifies it as FY2025. Tables and figures below keep the company’s own labels. Unless otherwise noted, amounts are in billions of yen, as presented in the materials.

Nippon Soda Co., Ltd. reported net sales of ¥152.09 billion (down 2.0%) and operating profit of ¥14.97 billion (down 6.8%) for the fiscal year ended March 31, 2026. Sales in Chemical Materials, Agri Business, and Eco Solutions were generally steady, while large-scale plant construction work decreased in Engineering. Share of profit of entities accounted for using the equity method rose 124.1% to ¥6.06 billion, foreign exchange gains were recorded, and a gain on sale of investment securities was booked, lifting ordinary profit 17.7% to ¥22.99 billion and profit attributable to owners of parent 21.7% to ¥18.27 billion. The company also launched its new medium-term business plan, “Brilliance through Chemistry Stage III” (FY 2027/3 to FY 2030/3).

Consolidated Results (Full-Year Actual)

Operating profit fell by ¥1.09 billion. According to the company, the price difference contributed an increase of ¥2.94 billion (including a positive foreign exchange impact of ¥590 million), the volume difference an increase of ¥100 million, and the material purchase price difference an increase of ¥890 million, while “others” posted a decrease of ¥5.03 billion. The main negative factors were a decrease in inventory valuation gains, higher R&D expenses for new businesses, and higher depreciation associated with the completion of expanded production facilities in Chemical Materials.

Below operating profit, share of profit of entities accounted for using the equity method rose by ¥3.35 billion. Novus International contributed ¥0.68 billion (¥0.12 billion in the prior year) and IHARABRAS ¥5.38 billion (¥2.58 billion), the latter reflecting foreign exchange gains on USD-denominated trade payables due to the appreciation of the Brazilian real against the US dollar. Extraordinary gains of ¥5.46 billion included a ¥5.07 billion gain on sales of investment securities, while extraordinary losses of ¥3.72 billion included a loss on abandonment of non-current assets associated with structural reforms, expenses for closing the Mizushima Plant, and a provision for environmental measures.

Item (billions of yen)	2026/3	2025/3	Change (amount)	Change (%)
Net sales	152.09	155.20	(3.11)	(2.0%)
Operating profit	14.97	16.06	(1.09)	(6.8%)
Share of profit of entities accounted for using equity method	6.06	2.70	3.35	124.1%
Ordinary profit	22.99	19.53	3.46	17.7%
Profit attributable to owners of parent	18.27	15.01	3.26	21.7%
Earnings per share (JPY)	336.5	272.6	64.0	23.5%
Exchange rate (JPY/USD)	150.4	151.9	(1.5)	(1.0%)
Exchange rate (JPY/EUR)	173.7	164.7	9.0	5.5%

At the end of March 2026, total assets stood at ¥307.31 billion (up ¥19.21 billion), total net assets at ¥206.09 billion, and the equity ratio at 66.6% (64.8% a year earlier). Net assets per share were ¥3,820.4. Cash flows from operating activities were ¥21.59 billion, cash flows from investing activities were (¥10.80 billion), and free cash flow was ¥10.79 billion. The number of cross-shareholding issues held decreased from 25 to 19.

Segment Results

Chemical Materials posted higher sales but lower profit. Sales increased in pharmaceuticals and industrial fungicides (including pharmaceutical excipient NISSO HPC), specialty chemicals (resin additive NISSO-PB and KrF photoresist material VP-POLYMER), and fine chemicals, while sales of industrial chemicals and eco-business products decreased, partly due to the termination of production of sodium cyanide and water treatment agent NISSO HI-CHLON. Operating profit was held back by lower inventory valuation gains, higher R&D expenses for new businesses, and higher depreciation following completion of the expanded VP-POLYMER facility; the segment’s operating margin was 15.3%.

Agri Business saw lower sales but higher profit. Sales to South America decreased amid intensified competition with generic agrochemicals, while sales to Europe recovered as distribution inventory generally returned to appropriate levels. Export sales of insecticide MOSPILAN and fungicide MIGIWA increased, while exports of fungicides PANCHO, TOPSIN-M and PYTHILOCK, and acaricide DANYOTE decreased. The overseas sales ratio was 65.7% (64.8% in the prior year).

In Trading & Logistics, sales of organic chemicals and resin materials increased, but operating expenses also rose. Engineering recorded lower sales and profit due to a decrease in large-scale plant construction work. Eco Solutions posted higher sales and profit on higher selling prices of non-ferrous metals and recycled sulfuric acid products.

Segment (billions of yen)	Net sales 2025/3	Net sales 2026/3	Operating profit 2025/3	Operating profit 2026/3	OP margin 2026/3
Chemical Materials	36.44	37.41	6.07	5.72	15.3%
Agri Business	53.59	52.50	5.12	5.49	10.4%
Trading & Logistics	42.82	43.81	2.42	2.27	5.2%
Engineering	13.14	8.52	2.37	1.14	13.4%
Eco Solutions	9.21	9.86	0.10	0.53	5.4%
Adjustments	–	–	(0.01)	(0.18)	–
Total	155.20	152.09	16.06	14.97	9.8%

Full-Year Forecast (FY 2027/3)

For the fiscal year ending March 31, 2027, Nippon Soda forecasts net sales of ¥152.20 billion (up 0.1%), operating profit of ¥14.20 billion (down 5.1%), ordinary profit of ¥19.00 billion (down 17.4%), and profit attributable to owners of parent of ¥15.80 billion (down 13.5%). In Agri Business, inventory valuation gains are expected to decrease as a reversal of the rise in certain raw material costs recorded in the previous fiscal year, and share of profit of entities accounted for using the equity method is expected to decrease due to the reversal of the prior year’s foreign exchange gains. Assumed exchange rates are ¥150 per USD and ¥175 per EUR.

Item (billions of yen)	2026/3 Results	2027/3 Forecast (1st Half)	2027/3 Forecast (Full-year)	Change (amount)	Change (%)
Net sales	152.09	68.00	152.20	0.11	0.1%
Operating profit	14.97	5.90	14.20	(0.77)	(5.1%)
Share of profit of entities accounted for using equity method	6.06	1.60	4.40	(1.66)	(27.3%)
Ordinary profit	22.99	7.50	19.00	(3.99)	(17.4%)
Profit attributable to owners of parent	18.27	4.80	15.80	(2.47)	(13.5%)
Net income per share (JPY)	336.5	89.5	294.8	(41.8)	(12.4%)

By segment, Chemical Materials is expected to post lower sales but higher profit: NISSO HPC, NISSO-PB, and VP-POLYMER performed steadily, while sales of products such as sodium cyanide and NISSO HI-CHLON were discontinued at the end of FY 2026/3 (net sales of discontinued products in FY 2026/3: ¥2.38 billion). In Agri Business, growth products PYTHILOCK, MIGIWA, and DANYOTE are expected to perform steadily, but lower inventory valuation gains, lower selling prices amid generic competition particularly in South America, and higher R&D expenses tied to the registration application for new insecticide NI-40 are expected to reduce profit. Engineering expects improved profitability of plant construction works, while Eco Solutions expects to record depreciation associated with equipment upgrades.

Segment (billions of yen)	Net sales 2026/3 Results	Net sales 2027/3 Forecast	Operating profit 2026/3 Results	Operating profit 2027/3 Forecast
Chemical Materials	37.41	35.30	5.72	6.60
Agri Business	52.50	52.20	5.49	4.50
Trading & Logistics	43.81	45.50	2.27	2.28
Engineering	8.52	8.70	1.14	1.50
Eco Solutions	9.86	10.50	0.53	0.42
Adjustments	–	–	(0.18)	(1.10)
Total	152.09	152.20	14.97	14.20

The company states that the impact of the escalation of Middle East tensions has not been factored into the FY 2027/3 forecast, that the impact on first-quarter performance is expected to be minimal, and that timely disclosure will be made if the situation is prolonged.

Shareholder Returns

Nippon Soda plans an annual dividend of ¥160 per share for FY 2027/3, unchanged from the fiscal year just ended, which the company describes as a payout ratio of approximately 54%, under its progressive dividend policy. During the year the company purchased ¥5.0 billion of treasury shares from May 2025 to January 2026, and all acquired shares were cancelled. The total return ratio for FY 2026/3 was 74.6%, above the previous medium-term plan’s target of 50% or more.

Capital investments are planned at ¥22.0 billion for FY 2027/3 (¥10.7 billion in FY 2026/3), reflecting the expanded production facility for NISSO HPC and a temperature-controlled automated warehouse for pharmaceuticals in logistics. Depreciation is forecast at ¥9.2 billion (¥8.1 billion) and R&D expenses at ¥8.2 billion (¥7.1 billion).

Medium-Term Business Plan: “Brilliance through Chemistry Stage III”

The previous plan, Stage II (FY 2024/3 to FY 2026/3), ended with net profit of ¥18.27 billion against a target of ¥17.0 billion and a total return ratio of 74.6% against a target of 50% or more. ROS was 9.8% (target: 10% or more), ROA 5.0% (target: 7% or more), and ROE 9.3% (target: 10% or more) in FY 2026/3. The company noted that Agri Business fell short of expectations due to changes in the business environment since the COVID-19 pandemic.

Stage III covers the four years from FY 2027/3 to FY 2030/3 and is positioned as the final stage of the long-term vision. FY 2030/3 KPIs are net income of ¥20.0 billion or more, ROS of 10% or more, ROA of 7% or more, and ROE of 10% or more, with a total return ratio of 50% or more and a progressive dividend policy. The plan allocates ¥35.0 billion to R&D (Stage II results: ¥20.1 billion) and ¥30.0 billion to growth investments including new businesses and capacity expansion, and targets new-business sales of ¥10.0 billion in FY 2030/3 and ¥50.0 billion in FY 2036/3, centered on the Animal Health business and organic EL light-emitting material TADF. The company notes that ROE may decline temporarily due to the expansion of investments.

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.