Nippon Denko forecasts minimal impact despite battery contract termination

Nippon Denko Co., Ltd. announced the partial termination of its OEM contract with Sumitomo Metal Mining Co., Ltd. for NCA cathode materials for lithium-ion batteries. This termination, effective March 2026, is due to Sumitomo Metal Mining's shift in cathode material production types. Nippon Denko expects a 67 million yen decrease in gross profit, operating profit, ordinary profit, and profit before income taxes for the cumulative third quarter of the fiscal year ending December 31, 2025, due to shortening the useful life of affected OEM equipment.

Despite the contract termination, Nippon Denko projects minimal impact on its consolidated financial results for the fiscal year ending December 31, 2025. The company maintains its consolidated earnings forecast, anticipating an ordinary profit of 3.0 bn yen and an underlying ordinary profit of 5.0 bn yen for the full fiscal year. This stability is attributed to increased sales volume in Functional Materials and Incineration Ash Recycling, offsetting declines in Ferroalloys.

For the nine months ended September 30, 2025, consolidated net sales were 57,864 million yen, with an ordinary profit of 1,368 million yen. Profit attributable to owners of parent was 439 million yen, resulting in basic earnings per share of 3.25 yen.