Asahi Kasei (3407) Q4 2026 earnings summary

Executive summary

• Net sales in FY 2025 rose 1.2% year-over-year to ¥3,074.5 billion, with operating income up 9.1% to ¥231.2 billion and net income up 17.6% to ¥158.8 billion.

• Operating income reached a record high for the second consecutive year in FY 2025, driven by growth in Pharmaceuticals and Electronics, with further increases forecasted for FY 2026 across all segments.

• Comprehensive income more than doubled to ¥293.3 billion, driven by strong segment performance and improved equity in earnings of affiliates.

• Major portfolio changes included divestitures in healthcare diagnostics, blood purification, and lead battery separator businesses.

• Business portfolio transformation continues, with strategic investments and divestitures to focus on high-value markets and improve capital efficiency.

Financial highlights

• FY 2025 EBITDA increased 7.4% to ¥427.5 billion; EBITDA margin improved to 13.9%.

• EPS rose 19.4% year-over-year to ¥116.97; dividends per share increased by ¥4 to ¥42.

• Free cash flow remained positive, supported by higher income and proceeds from business divestitures.

• D/E ratio improved to 0.46 as of March 2026, with interest-bearing debt reduced by ¥189.9 billion.

• Cash flows from operating activities remained robust at ¥303.1 billion; cash and cash equivalents at period end were ¥372.1 billion.

Outlook and guidance

• FY 2026 guidance anticipates net sales of ¥3,254.0 billion (+5.8%), operating income of ¥248.0 billion (+7.3%), and net income of ¥160.0 billion (+0.8%).

• Dividend forecast for FY 2026 is ¥44 per share (+¥2), and a share repurchase program of up to ¥40 billion is underway.

• FY 2026 expects continued record operating income, with growth led by First Priority businesses in Critical Care and Electronics.

• Risks from the Middle East and U.S. tariff policy are being monitored, but significant impacts are not expected in the current forecast.