Denka beats half-year profit forecasts despite extraordinary loss

Denka Company Limited announced its consolidated financial results for the first six months of the fiscal year ending March 31, 2026, reporting net sales of JPY 196,699 million, operating income of JPY 9,740 million, and ordinary income of JPY 6,791 million. These figures surpassed initial forecasts, with net income attributable to owners of parent reaching JPY 3,902 million, significantly higher than anticipated. The primary driver was stronger-than-expected sales volume in the Electronics & Innovative Products Division.

Despite positive results, the company recognized an extraordinary loss of JPY 9,415 million related to its U.S. chloroprene rubber manufacturing subsidiary, Denka Performance Elastomer LLC, due to write-downs and labor costs. This loss is expected to be offset by extraordinary gains, including land sales and potential sales of strategic cross-shareholdings. Denka's full-year consolidated financial forecast remains unchanged for operating and ordinary income and net income, with a slight downward revision for net sales to JPY 400,000 million.

Looking ahead, Denka aims to achieve record-high operating profit of over JPY 40 billion and an ROE of 8.0% or higher during Phase 2 (FY2026-FY2028) of its "Mission2030" management plan. The company also confirmed its dividend forecast of JPY 100 per share for the fiscal year, with a total return ratio target of 50%.