OSAKA SODA (4046): FY2025 Results Summary — Record Profits at Every Level and a New Plan Targeting ¥30.0 Billion Operating Income

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OSAKA SODA CO., LTD. achieved higher sales and profits in FY2025, with net sales of 99,961 million yen (up 3.7% YoY) and operating income of 17,634 million yen (up 33.1%). According to the company, all profit levels increased by over 30% YoY and reached record highs, driven by higher sales volumes after production problems in Basic Chemicals were resolved, improved market conditions, and growth in the Healthcare business. For FY2026 the company forecasts net sales of 106,000 million yen and operating income of 19,000 million yen, and it launched a new medium-term management plan, Transform Our Future 2030, which targets operating income of 30.0 billion yen and a total payout ratio of 70% or higher.

Consolidated Results (Full-Year Actual)

Net sales rose by 3,527 million yen to 99,961 million yen, but fell short of the initial forecast of 102,000 million yen (achievement rate 98.0%), which the company attributes to a delayed recovery in the allyl ethers market in Functional Chemicals. Operating income rose 33.1% to 17,634 million yen, ordinary income rose 38.5% to 19,608 million yen, and net income rose 49.6% to 15,460 million yen, all exceeding their initial forecasts. Overseas sales were 39,308 million yen, or 39.3% of net sales.

Item (Millions of yen)	FY2024	FY2025	Change (YoY)	Change %	Initial forecast	Achievement rate
Net sales	96,434	99,961	3,527	3.7%	102,000	98.0%
Operating income	13,246	17,634	4,388	33.1%	17,300	101.9%
Ordinary income	14,154	19,608	5,454	38.5%	18,700	104.9%
Net income	10,332	15,460	5,128	49.6%	13,500	114.5%
Earnings per share	¥81.54	¥123.96	–	–	–	–
Overseas sales	36,184	39,308	3,124	8.6%	–	–

The exchange rate assumptions were 145 yen per US dollar (FY2024: 152 yen) and 160 yen per euro (FY2024: 163 yen), and the naphtha price was 64,000 yen/kL (FY2024: 75,800 yen). On the balance sheet, total assets were 168,741 million yen, net assets 128,541 million yen, and the equity ratio 76.2%. Cash flows from operating activities reached a record high of 19,875 million yen, while cash outflows from financing activities increased to 9,273 million yen, mainly due to share buybacks of 6.0 billion yen.

Segment Results

Basic Chemicals: Net sales rose by 4.1 billion yen and operating income increased from 2,275 million yen to 6,194 million yen. Production and sales recovered after the production problems were resolved, and cost reduction initiatives improved profitability. In Chlor-alkali, better profitability for hydrochloric acid contributed to earnings, and Epichlorohydrin benefited from improved overseas market conditions.

Functional Chemicals: Net sales fell by 1.1 billion yen to 27,935 million yen, while operating income rose to 4,634 million yen. Epichlorohydrin rubber was affected by lower automobile production in Europe, while acrylic rubber sales volumes grew as more new customers adopted it. In Synthetic Resin, sales of UV inks in Europe remained strong. Allyl ethers showed signs of recovery in the Chinese market but did not return to the previous year’s level.

Healthcare: Net sales rose by 0.9 billion yen to 14,635 million yen and operating income rose to 7,156 million yen. Demand for pharmaceutical purification materials for diabetes and obesity medications continued to grow, although results were affected by higher depreciation and shipment timing differences. Trading and Others: Net sales fell by 0.3 billion yen to 15,649 million yen; consumer products remained strong while inorganic chemicals and building materials declined.

Segment	Metric	FY2025	FY2024
Basic Chemicals	Net sales	41,741	37,636
Basic Chemicals	Operating income	6,194	2,275
Functional Chemicals	Net sales	27,935	29,097
Functional Chemicals	Operating income	4,634	4,327
Healthcare	Net sales	14,635	13,684
Healthcare	Operating income	7,156	7,031
Trading and Others	Net sales	15,649	16,015
Trading and Others	Operating income	946	904

Figures are in millions of yen.

FY2026 Forecast

For FY2026, the company forecasts net sales of 106,000 million yen (up 6.0%), operating income of 19,000 million yen (up 7.7%), ordinary income of 20,400 million yen (up 4.0%), and net income of 13,600 million yen (down 12.0%). With the Healthcare business expected to keep expanding, both operating income and ordinary income are expected to reach record highs. The assumptions are 145 yen per US dollar, 170 yen per euro, and a naphtha price of 63,000 yen/kL, and they do not take into account the situation in the Middle East. The company’s basic policy is to revise product prices in a timely manner in response to rising fuel and raw material prices, and it expects the impact of the Middle East situation on its business to remain limited.

Item (Millions of yen)	FY2026 Forecast	FY2025 (Actual)	Change (YoY)
Net sales	106,000	99,961	6,039
Operating income	19,000	17,634	1,366
Ordinary income	20,400	19,608	792
Net income	13,600	15,460	(1,860)
Earnings per share	110.70 yen	123.96 yen	–
Basic Chemicals: Net sales	42,500	41,741	759
Basic Chemicals: Operating income	6,000	6,194	(194)
Functional Chemicals: Net sales	30,000	27,935	2,065
Functional Chemicals: Operating income	5,050	4,634	416
Healthcare: Net sales	17,000	14,635	2,365
Healthcare: Operating income	8,250	7,156	1,094
Trading & Others: Net sales	16,500	15,649	851
Trading & Others: Operating income	1,100	946	154

By segment, demand in Basic Chemicals is expected to remain firm despite continued weak market conditions. In Functional Chemicals, allyl ethers are expected to keep recovering, synthetic resin is expected to see solid demand, and automobile production volume is projected to rise slightly. In Healthcare, demand for pharmaceutical purification materials is expected to keep expanding, supported by increased production capacity at both the Matsuyama and Amagasaki plants.

Shareholder Returns

For FY2025, the company raised the year-end dividend to 16 yen per share (+3 yen), bringing the annual dividend to 28 yen per share, and carried out share buybacks totaling 6.0 billion yen. The total payout ratio was 61.3%, well above the target of 40% or higher set for the FY2023-2025 medium-term management plan. For FY2026, the annual dividend plan is 28 yen per share, and in May the company resolved to conduct share buybacks of up to 5.0 billion yen. Dividend per share figures are adjusted for the stock split effective October 1, 2024.

Item	FY2024	FY2025	FY2026 (Plan)
Annual dividend per share (yen)	19	28	28
Total payout ratio (%)	40.7	61.3	–
Share buyback (billion yen)	1.8	6.0	–

Medium-Term Management Plan

Review of Shape the Future – 2025: In FY2025, the final year of the previous plan, operating income of 17.6 billion yen broadly achieved the 18.0 billion yen target and ROE of 12.7% beat the target of 10.0% or higher. Net sales of 100.0 billion yen fell short of the 123.0 billion yen target because of market fluctuations in epichlorohydrin and allyl ethers. The total payout ratio stayed above the 40% or higher target throughout the plan period.

Transform Our Future 2030: The new plan is built on three basic policies: rebuilding the value of existing businesses and accelerating growth in Healthcare; creating new businesses by mobilizing companywide capabilities; and strengthening the management foundation to adapt to changes in the business environment. Its targets are net sales of 120.0 billion yen in FY2028 and 130.0 billion yen in FY2030, operating income of 22.0 billion yen and 30.0 billion yen, EBITDA of 30.0 billion yen and 39.0 billion yen, ROE of 13.0% or higher and 15.0% or higher, and a total payout ratio of 70.0% or higher. By segment, the FY2030 operating income targets are 5,600 million yen for Basic Chemicals, 7,800 million yen for Functional Chemicals, 16,900 million yen for Healthcare, and 1,100 million yen for Trading and Others.

For FY2026 to FY2030, the company expects cumulative operating cash flow of approximately 110 billion yen. Its planned cash allocation totals 127 billion yen: capital expenditures of approximately 67 billion yen (strategic investments of approximately 32 billion yen and resilience and cost reduction investments of approximately 35 billion yen), shareholder returns of approximately 60 billion yen, and investment and financing, including M&As and alliances, of approximately 20 billion yen or more. Strategic investment is focused on Healthcare (approximately 16 billion yen), including expanding silica gel production facilities (over 10 billion yen). The company also plans to roughly double manufacturing capacity for silica gel, as it expects demand to exceed current capacity in FY2028, and it aims to commercialize high-ionic-conductivity materials for all-solid-state batteries by 2030.

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.