Daicel Q1 FY2027: Revenue and profit rise, net profit seen doubling

For the first quarter (April–June 2026), consolidated revenue rose 9.4% year on year to ¥152.38 billion, and operating profit increased 7.7% to ¥14.04 billion, driven by the core High-Performance Polymers segment. Ordinary profit grew 18.1% to ¥14.57 billion as foreign exchange losses shrank. Net profit attributable to owners of the parent edged down 2.7% to ¥9.36 billion, mainly because the year-earlier period had recorded one-off gains such as negative goodwill and subsidy income, along with a higher tax charge; underlying profitability improved.

The company maintained its full-year forecast: revenue of ¥595.0 billion (up 2.7% from the prior year), operating profit of ¥42.5 billion (up 1.0%), and net profit of ¥32.0 billion, a 214.3% surge that reflects the combination of last year's one-off losses and a recovery in core operations. Daicel also announced plans to raise the annual dividend from ¥60 to ¥70 per share.

From this quarter, the segment names were partially changed: the former Engineering Plastics segment is now High-Performance Polymers, and Medical & Healthcare became Life Science. Year-on-year comparisons are restated accordingly.

High-Performance Polymers sales surged 23.9% to ¥64.22 billion, with operating profit up 20.9% to ¥8.10 billion. A recovery in polyacetal resin volumes and strong demand for liquid crystal polymers used in AI servers drove the gains. Material revenue slipped 6.2% to ¥45.71 billion on lower cellulose acetate and acetic acid sales, but operating profit edged 2.1% higher to ¥4.24 billion as the unit passed through higher raw material costs. Safety posted an 8.2% revenue increase to ¥26.48 billion on higher volumes, yet operating profit plunged 80.8% to ¥308 million due to a deteriorating sales mix, timing of expenses, and slowing Chinese auto demand. Smart revenue rose 12.4% to ¥10.62 billion and operating profit jumped 215.5% to ¥672 million, helped by strong semiconductor-related solvents and price hikes for caprolactone derivatives. Life Science grew revenue 15.8% to ¥4.93 billion and operating profit 138.8% to ¥499 million, driven by chiral columns and functional food ingredients.

Total assets rose ¥31.36 billion from the end of the previous fiscal year to ¥865.28 billion, reflecting a ¥12.4 billion increase in inventories and a rise in investment securities. Liabilities grew ¥18.39 billion to ¥481.94 billion, partly due to the issuance of ¥14 billion in short-term corporate bonds. The equity ratio stood at 42.5%, virtually unchanged from 42.6% at the prior year-end, indicating stable financial health. Although cash flow statements were not disclosed, cash and deposits increased by more than ¥4.2 billion, supporting working capital.

On shareholder returns, Daicel announced a planned annual dividend of ¥70 per share, up ¥10 from the prior year, with interim and year-end payments of ¥35 each. No new share buyback programs were announced.

The earnings report flags several risks to the business environment: instability in the Middle East could constrain energy supply and drive up raw material prices, while supply chain disruptions remain a threat. In the Material segment, raw material procurement concerns have already forced shipment adjustments for some products. The Safety segment is facing headwinds from the slowdown in Chinese auto demand. Prolonged foreign exchange and geopolitical risks may keep raw material costs elevated and erode export margins.

Daicel left its full-year consolidated forecasts unchanged. Compared with the previous fiscal year, the company projects revenue of ¥595.0 billion (up 2.7%), operating profit of ¥42.5 billion (up 1.0%), ordinary profit of ¥43.0 billion (down 4.7%), and net profit of ¥32.0 billion (up 214.3%). The sharp net profit increase factors in the reversal of one-off losses and an expected recovery in the Safety segment. The forecast for a decline in ordinary profit, however, reflects conservative assumptions about non-operating items.