Denka announced its results for the first quarter of the fiscal year ending March 2027. Net sales rose just under 3% year on year to ¥9,697.7 million, while operating income increased 377.6% to ¥1,099.3 million. Interim net income, however, fell sharply year on year to ¥284.3 million.
Denka announced its consolidated results for the first quarter of the fiscal year ending March 2027, reporting net sales of ¥9,697.7 million and operating income of ¥1,099.3 million. Ordinary income also increased significantly year on year to ¥947.5 million. Net income attributable to owners of the parent came to ¥284.3 million, down approximately 43% year on year.
On the same day, Denka raised its first-half operating income forecast for fiscal 2027 by ¥5 billion, from ¥12 billion to ¥17 billion, while leaving its interim net income forecast at zero. A divergence has emerged between earnings growth at the operating level and net income at the final stage.
Two factors lie behind this. The first is the portion described as a temporary boost, including an approximately ¥6 billion positive impact from inventories. The second is the indefinite suspension of the chloroprene rubber business at U.S. subsidiary Denka Performance Elastomer LLC and the costs associated with winding it down. Operating income improves when the plant is not operated, but costs arise during the restructuring process.
The company must be evaluated across three layers: temporary factors, structural reform and growth businesses. The focus will be on whether growth in materials for AI and power infrastructure can translate into the Group’s overall earnings power.