First-half plan absorbs half of operating profit in Q1; focus shifts to Q2 repeatability

In the first quarter from 1 April to 30 June 2026, revenue was ¥578,199 million, up 9.9% from ¥526,140 million in the same period of the previous year. Operating profit was ¥61,041 million, up 139.8% from ¥25,452 million. The calculated operating margin rose from approximately 4.8% to approximately 10.6%, indicating that improvements in profitability, including terms of trade and product mix, as well as higher sales, drove progress against the forecast.

The company newly provided a first-half forecast of revenue of ¥1,170,000 million, operating profit of ¥122,000 million and profit attributable to owners of the parent of ¥70,000 million. A simple calculation of the shortfall from Q1 results means that Q2 must generate revenue of ¥591,801 million, operating profit of ¥60,959 million and profit attributable to owners of the parent of ¥29,218 million. Q1 progress against the first-half forecast was 49.4% for revenue, 50.0% for operating profit and 58.3% for net profit, indicating that profit is ahead of plan.

By contrast, Q1 progress against the full-year forecast was 24.5% for revenue, 34.5% for operating profit and 58.3% for profit attributable to owners of the parent. The first-half forecast represents 49.6% of the full-year revenue forecast of ¥2,360,000 million and 68.9% of the full-year operating profit forecast of ¥177,000 million. Since the first-half operating profit target is set at approximately 70% of the full-year plan, the full-year forecast will depend on whether Q2 can secure operating profit at roughly the same level as Q1.

Q1 segment profit was ¥9,631 million for Agro & Life Solutions, ¥13,034 million for ICT & Mobility Solutions, a loss of ¥1,938 million for Advanced Medical Solutions, ¥27,224 million for Essential & Green Materials and ¥18,846 million for Sumitomo Pharma. The latest disclosure does not provide a monetary breakdown of the segment-level first-half and full-year profit plans or the assumptions for foreign exchange rates and naphtha prices. At the next results announcement, in addition to the first-half results, we will look for the company’s promised re-explanation of its full-year forecast to determine whether the front-loaded profit is temporary or will continue into the second half.