Denka Company (4061) investor relations material

Executive summary

• Operating income for FY2025 rose to ¥26.2B (+¥11.8B YoY), driven by semiconductor and power infrastructure demand, and DPE production suspension effects.

• Net income surged to ¥15.7B (+¥28.0B YoY), reversing a prior year loss, aided by gains from strategic shareholdings and land sales, offsetting DPE-related losses.

• FY2026 guidance incorporates a ¥5.0B negative impact from Middle East supply disruptions, with operating income forecast at ¥30.0B (+¥3.8B YoY).

• Dividend maintained at ¥100/share, targeting a 50% total return ratio over the management plan period.

• Comprehensive income reached ¥19.1B, compared to a loss of ¥7.1B the previous year.

Financial highlights

• FY2025 sales: ¥384.2B (down 4.0% YoY); operating margin improved to 6.8% (+3.2pp YoY).

• Ordinary income: ¥19.3B (+¥11.7B YoY); ROE: 5.2%.

• Extraordinary gains: ¥12.6B from shareholdings, ¥8.2B from land sale; extraordinary losses: ¥21.1B (mainly DPE-related).

• Gross profit increased to ¥94.3B from ¥84.6B YoY.

• Annual dividend per share was ¥100.00, with a payout ratio of 54.9%.

Outlook and guidance

• FY2026/FY2027 sales forecast: ¥450.0B (+¥65.8B YoY); operating income: ¥30.0B (+¥3.8B YoY); net income: ¥16.0B (+¥0.3B YoY).

• Assumes raw material procurement disruptions in H1, normalizing from October, with high raw material prices persisting.

• Dividend forecast maintained at ¥100.00 per share.

• Middle East disruptions expected to impact acetylene black and polymer solutions volumes.