Business performance
Net sales for the fiscal year ended March 31, 2025 decreased 10.8% year on year to ¥142,258 million due to the withdrawal from the superabsorbent polymer business. In terms of profit, operating profit was ¥8,439 million (an increase of 72.7% year on year) and ordinary profit was ¥9,670 million (an increase of 18.1% year on year) mainly due to strong performance in the advanced semiconductor field, expanded sales of high-value-added products, and improved profitability through structural reforms. Profit attributable to owners of parent was ¥4,151 million (compared with a loss of ¥8,501 million year on year, which included ¥12,059 million in business restructuring expenses), due to the recording of a loss on valuation of investments in capital and business restructuring expenses.
During the fiscal year ended March 31, 2025, Japanese economy showed a gradual recovery despite a decline in consumer sentiment due to high prices against a backdrop of an improvement in the employment and income environment. After the yen depreciated, there were moments when it sharply rebounded due to interest rate cuts in the U.S. and Europe and the Bank of Japan’s interest rate hike. However, due to factors such as the limited narrowing of interest rate differentials, the yen fluctuated wildly throughout the year, resulting in a slight appreciation. Crude oil prices also remained high due to geopolitical risks surrounding the Middle East region. In the global economy, while the U.S. economy has remained resilient and the European economy showed a recovery trend, and although China saw a temporary recovery due to policy measures, its autonomous economic recovery has lagged due to factors such as deteriorating real estate market conditions. In addition, the recent trend in U.S. tariff policies, the prolonged situation between Russia and Ukraine, and the ongoing instability in the Middle East have created an extremely uncertain outlook.
In the chemical industry, the business environment is undergoing irreversible changes, such as intensifying price competition due to the influx of Chinese products into the Japanese and Asian markets as a result of sluggish Chinese domestic demand and oversupply.
Under such an environment, the Company decided in the previous fiscal year to withdraw from the superabsorbent polymer business and cease production in China as part of the structural reform under the “New Medium-Term Management Plan 2025.” In the fiscal year ended March 31, 2025, in accordance with this decision, we completed the transfer of our equity interest in San-Dia Polymers (Nantong) Co., Ltd. and withdrew completely from the superabsorbent polymer business. We are steadily progressing with our business portfolio reform aimed at shifting to high-value-added businesses. In addition, with regard to cost reduction and working capital compression across the entire supply chain, which is part of our “Monozukuri Transformation,” we are progressing at a pace that exceeds our targets, contributing to the recovery of earnings in our core businesses.
As a result, net sales for the fiscal year ended March 31, 2025 decreased 10.8% year on year to ¥142,258 million due to the withdrawal from the superabsorbent polymer business. In terms of profit, operating profit was ¥8,439 million (an increase of 72.7% year on year) and ordinary profit was ¥9,670 million (an increase of 18.1% year on year) mainly due to strong performance in the advanced semiconductor field, expanded sales of high-value-added products, and improved profitability through structural reforms. Profit attributable to owners of parent was ¥4,151 million (compared with a loss of ¥8,501 million year on year, which included ¥12,059 million in business restructuring expenses), due to the recording of a loss on valuation of investments in capital and business restructuring expenses.
The loss related to the aforementioned business restructuring was estimated to be a total of ¥20.0 billion over multiple fiscal years from the previous fiscal year, but approximately ¥12.0 billion was recorded in the previous fiscal year, and approximately ¥1.2 billion, including impairment losses on San-Dia Polymers (Nantong) Co., Ltd., was recorded in the fiscal year under review.
| FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | |
|---|---|---|---|---|---|
| Net sales(Millions of yen) | 144,757 | 162,526 | 174,973 | 159,510 | 142,258 |
| Operating profit(Millions of yen) | 11,932 | 11,868 | 8,123 | 4,886 | 8,439 |
| Percentage of operating profit to net sales(%) | 8.2 | 7.3 | 4.6 | 3.1 | 5.9 |
| Ordinary profit(Millions of yen) | 11,999 | 12,771 | 9,918 | 8,186 | 9,670 |
| Percentage of ordinary profit to net sales(%) | 8.3 | 7.9 | 5.7 | 5.1 | 4.0 |
| Profit attributable to owners of parent(Millions of yen) | 7,282 | 6,699 | 5,684 | (8,501) | 4,151 |
| Percentage of profit attributable to owners of parent to net sales(%) | 5.0 | 4.1 | 3.2 | (5.3) | 2.9 |
| Net income per share (yen) | 330.34 | 303.76 | 257.57 | (384.99) | 187.79 |
| ROE (Return on equity)(%) | 5.4 | 4.7 | 3.9 | (6.0) | 3.0 |
| ROA (Return on assets*)(%) | 6.4 | 6.5 | 4.9 | 4.0 | 5.1 |
| Overseas sales(Millions of yen) | 63,567 | 69,903 | 76,378 | 70,802 | 58,183 |
| Overseas sales ratio(%) | 43.9 | 43.0 | 43.7 | 44.4 | 40.9 |
| Cash dividends paid per share(yen) | 150.0 | 170.0 | 170.0 | 170.0 | 170.0 |
| Dividend payout ratio(%) | 45.4 | 56.0 | 66.0 | – | 90.5 |
*ROA(Return on assets) is calculated based on ordinary profit.
Financial position
Net assets as of the end of the fiscal year under review decreased by ¥3,275 million from the end of the previous fiscal year, to ¥138,302 million. The equity ratio increased by 9.2 percentage points from 67.6% as of the end of the previous fiscal year to 76.8%. Net assets per share decreased by ¥175.41 from ¥6,295.31 at the end of the previous fiscal year to ¥6,119.90.
Total assets as of the end of the fiscal year under review decreased by ¥29,452 million from the end of the previous fiscal year, to ¥176,366 million. Current assets decreased by ¥20,986 million from the end of the previous fiscal year to ¥84,942 million, mainly due to a ¥9,908 million decrease in notes and accounts receivable – trade and a ¥6,876 million decrease in merchandise and finished goods. Non-current assets decreased by ¥8,465 million from the end of the previous fiscal year to ¥91,423 million, mainly due to a decrease of ¥5,335 million in property, plant and equipment.
Current liabilities decreased by ¥23,187 million from the end of the previous fiscal year to ¥30,332 million, mainly due to a ¥8,241 million decrease in short-term borrowings, a ¥6,968 million decrease in accounts payable -trade, and a ¥3,910 million decrease in accounts payable – other. Non-current liabilities decreased by ¥2,989 million from the end of the previous fiscal year to ¥7,731 million, mainly due to a decrease of ¥3,042 million in provision for business restructuring.
Net assets as of the end of the fiscal year under review decreased by ¥3,275 million from the end of the previous fiscal year, to ¥138,302 million. The equity ratio increased by 9.2 percentage points from 67.6% as of the end of the previous fiscal year to 76.8%. Net assets per share decreased by ¥175.41 from ¥6,295.31 at the end of the previous fiscal year to ¥6,119.90.
| FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | |
|---|---|---|---|---|---|
| Current assets(Millions of yen) | 89,340 | 93,764 | 97,324 | 105,929 | 84,942 |
| Non-current assets(Millions of yen) | 106,382 | 106,429 | 104,857 | 99,889 | 91,423 |
| Net assets(Millions of yen) | 195,723 | 200,194 | 202,182 | 205,818 | 176,366 |
| Current liabilities(Millions of yen) | 46,222 | 47,904 | 46,938 | 53,519 | 30,332 |
| Non-current liabilities(Millions of yen) | 6,548 | 5,257 | 6,249 | 10,720 | 7,731 |
| Shareholders’ equity(Millions of yen) | 140,474 | 144,479 | 146,067 | 139,037 | 135,385 |
| Shareholder’s equity ratio(%) | 71.8 | 72.2 | 72.2 | 67.6 | 76.8 |
| Net assets per share(yen) *1 | 6,371.77 | 6,549.60 | 6,617.11 | 6,295.31 | 6,119.90 |
| Research and development cost(Millions of yen) | 5,384 | 5,650 | 5,691 | 5,222 | 5,158 |
| Investment in plant and equipment(Millions of yen) | 10,073 | 9,847 | 12,033 | 8,649 | 6,663 |
| Depreciation and amortization(Millions of yen) *2 | 9,569 | 9,533 | 10,083 | 10,686 | 9,500 |
| Number of employees | 2,096 | 2,106 | 2,089 | 2,042 | 1,680 |
Cash flow
Cash and cash equivalents (“cash”) as of the end of the fiscal year under review amounted to ¥24,010 million. This marked a decrease of ¥3,177 million compared with the end of the previous
fiscal year.
Net cash provided by operating activities amounted to ¥13,925 million (compared to ¥19,814 million in net cash provided during the previous fiscal year). This result was mainly due to profit before income taxes of ¥6,461 million, depreciation of ¥9,633 million, the decrease in trade receivables of ¥7,883 million, and the decrease in inventories of ¥3,254 million, which outweighed the cash outflow mainly from the decrease in trade payables of ¥6,586 million, payment for business restructuring of ¥4,549 million, and income taxes paid of ¥2,501 million.
Net cash used in investing activities amounted to ¥5,079 million (compared to ¥6,264 million in net cash used during the previous fiscal year). This result was mainly due to a cash outlay of ¥6,771 million for purchase of non-current assets.
The free cash flow, determined by subtracting net cash provided by (used in) investing activities from net cash provided by (used in) operating activities, amounted to net cash provided of ¥8,846 million (compared to ¥13,550 million in net cash provided during the previous fiscal year).
Net cash used in financing activities amounted to ¥11,895 million (compared to ¥4,006 million in net cash used during the previous fiscal year). This result was mainly due to the cash outflow from a decrease in accounts payable resulting from dividends paid of ¥3,760 million and net decrease in short-term borrowings of ¥8,371 million.
| FY2020 | FY2021 | FY2022 | FY2023 | FY2024 | |
|---|---|---|---|---|---|
| Operating activities(Millions of yen) | 22,300 | 11,328 | 10,852 | 19,814 | 13,925 |
| Investing activities(Millions of yen) | (12,498) | (11,704) | (10,172) | (6,264) | (5,079) |
| Financing activities(Millions of yen) | (4,146) | (5,979) | (2,336) | (4,006) | (11,895) |
| Cash and cash equivalents at the end of the year (Millions of yen) | 23,647 | 18,171 | 17,042 | 27,188 | 24,010 |
Fiscal Year 2025 Forecast
The outlook for the future is that the Japanese economy will continue to recover gradually, led by domestic demand. On the other hand, it is expected that, globally, the situation will remain uncertain due to the trends in U.S. tariff policies, the prolonged Russia-Ukraine situation, and geopolitical risks surrounding the Middle East region. Also, in addition to the above-mentioned circumstances, we expect the business environment to remain uncertain due to intensifying competition caused by overproduction of general purpose petrochemical products in China, as well as the unpredictable trends in raw material prices and exchange rates.
In this environment, the consolidated earnings forecast for the next fiscal year is as follows: net sales of ¥130 billion (a decrease of 8.6% year on year), operating profit of ¥10 billion (an increase of 18.5% year on year), ordinary profit of ¥11 billion (an increase of 13.8% year on year), and profit attributable to owners of parent of ¥8 billion (an increase of 92.7% year on year) mainly due to increased profits resulting from business structural reforms and expanded sales of high-value-added products.