Nippon Shokubai (4114.T) announced on the 7th that its consolidated results for the first quarter of the fiscal year ending March 2027 (April-June 2026) saw operating profit surge 2.8 times year-on-year to ¥12.142 billion, significantly boosted by improved profitability in its core acrylic-related products. Following this strong start, the company disclosed its previously undecided full-year earnings forecast and substantially raised its annual dividend projection to ¥140 per share.
Revenue increased 19.8% year-on-year to ¥121.318 billion, and quarterly net profit attributable to owners of the parent jumped 134.0% to ¥10.378 billion, both setting new record highs for the April-June period. In addition to inventory valuation gains propelled by soaring naphtha (crude gasoline) prices amid escalating tensions in the Middle East, higher selling prices for products such as acrylic acid and superabsorbent polymers (SAP) significantly expanded earnings.
By segment, the recovery in the core “Materials Business” was particularly notable. External revenue for this segment rose 25.9% year-on-year to ¥87.894 billion, while operating profit surged 261.1% to ¥8.414 billion, powerfully driving overall profit growth. In acrylic acid and acrylic acid esters, although sales volumes declined due to reduced procurement of naphtha-derived raw materials, the rise in selling prices against a backdrop of higher crude oil prices more than compensated for the volume decrease. Profitability also improved for superabsorbent polymers.
The “Solutions Business” also performed solidly. External revenue grew 6.3% year-on-year to ¥33.424 billion, and operating profit increased 97.1% to ¥3.658 billion, supported by growth in materials for displays in the Chinese market.
Following the significant profit increase in the first quarter, Nippon Shokubai newly disclosed its consolidated earnings forecast for the full fiscal year ending March 2027. The company had left its forecast undecided at the beginning of the fiscal year due to the uncertain outlook for the Middle East, but has now incorporated its strong current progress and raw material price projections.
Full-year revenue is expected to reach a record high of ¥455 billion, up 14% from the previous fiscal year. The company forecasts operating profit of ¥21 billion, up 20%, pre-tax profit of ¥27.5 billion, and net profit attributable to owners of the parent of ¥20.5 billion, up 22%. Regarding naphtha, its key raw material, the company assumes a price of ¥101,000 per kiloliter for the first half, while expecting a decline to ¥75,000 in the second half.
The company also demonstrated a proactive stance on shareholder returns. The annual dividend forecast was significantly revised upward from the previous plan of ¥113 per share to ¥140 per share, consisting of an interim dividend of ¥70 and a year-end dividend of ¥70. This represents an increase of ¥27 compared to the ¥113 paid in the previous fiscal year.
Nippon Shokubai’s earnings are structurally susceptible to the supply-demand balance for acrylic acid and trends in naphtha prices. The upward revision indicates that while high raw material costs driven by geopolitical risks in the Middle East have temporarily boosted profits in the form of inventory valuation gains, the pass-through to product prices is also progressing smoothly. The key to achieving the full-year forecast will be the extent to which the company can maintain profitability for its acrylic-related products during the anticipated decline in naphtha prices in the second half.