Chemicals business on record pace is the main driver of the consolidated upside

In the first half, the chemicals business generated revenue of ¥23,876 million and segment profit of ¥3,191 million, both record highs for an interim period. The segment margin was approximately 13.4%, calculated by dividing ¥3,191 million by ¥23,876 million, representing a substantial improvement from the prior-year level. On a consolidated basis, revenue was ¥31,008 million and operating profit was ¥2,653 million, indicating that the chemicals business was almost entirely responsible for driving consolidated growth.

The breakdown of revenue growth shows that against the ¥3,828 million increase in consolidated revenue year on year, the chemicals business contributed ¥2,970 million and foreign-exchange effects within the chemicals business contributed ¥1,303 million. For segment profit, the chemicals business contributed ¥934 million of the increase and foreign-exchange effects contributed ¥268 million. Accordingly, the strong first-half performance reflected not only increased volumes and projects for high-value-added products and new businesses but also translation and profitability gains from the weaker yen. In Q3, it will be necessary to distinguish actual sales growth excluding foreign-exchange effects from margin improvement attributable to price revisions and raw-material substitutions.

By business area, the company reported revenue growth in high-value-added EHD-related products, including fluorine-free water repellents and process-efficiency chemicals centered on its China operations, as well as new businesses and electronic-materials-related process chemicals for the semiconductor market. First-half revenue by customer location was ¥13,795 million in Japan, ¥7,995 million in China, ¥8,156 million in other Asia, and ¥1,061 million in North America, with overseas revenue accounting for 48%. Revenue is said to have grown not only in China but also in Southwest Asia and South Korea, making it important to determine whether dependence on any single region is being reduced.

However, the company has not disclosed how many millions of yen of additional revenue and profit each of the new businesses, electronic materials, price revisions, and raw-material substitutions contributed, nor has it provided a volume-and-price breakdown. In FY2026-Q3, in addition to year-on-year changes in chemicals revenue and segment profit, it will be important to determine whether the company can provide additional disclosure on the EHD-related product mix, growth in electronic-materials-related chemicals, revenue growth excluding foreign-exchange effects, and sales trends by major region.