Sumitomo Chemical lifts forecast on strong pharma sales, yen weakness

Sumitomo Chemical announced a substantial upward revision to its consolidated earnings forecast for the fiscal year ending March 31, 2026. Core operating income for the second quarter (interim period) reached ¥108.7bn against a forecast of ¥90bn, primarily attributed to strong sales of ORGOVYX® in North America by Sumitomo Pharma and reduced selling, general, and administrative expenses. Interim net income attributable to owners of the parent also surged to ¥39.7bn, compared to a forecast of ¥25bn, benefiting from improved financial income due to a weaker yen and the reversal of deferred tax liabilities.

The company's full-year outlook now projects core operating income of ¥185bn, an increase of ¥35bn from the previous forecast. Sales revenue, however, is expected to slightly decrease to ¥2.29trn due to reduced shipments in the Essential & Green Materials segment. Net income attributable to owners of the parent is revised upwards by ¥5bn to ¥45bn. These revisions incorporate the impact of a partial sale of shares in Petro Rabigh, expected to result in a net gain of approximately ¥35bn.

Despite the positive revisions, the second quarter saw an equity method investment loss of ¥17.5bn, mainly due to the underperformance of Rabigh Refining and Petrochemical Company. Conversely, the company recorded a foreign exchange gain of ¥15.2bn, largely from the revaluation of foreign-currency-denominated assets and liabilities. The full-year dividend forecast remains unchanged at ¥12.00 per share, with an interim dividend of ¥6.00 per share.