Nissan Chemical Q1 FY2027: Sales jump 12.8%, profit up 21% as chip materials lead

Nissan Chemical’s consolidated revenue for Q1 FY2027 (April–June 2026) rose 12.8% year on year to ¥78,792 million, while operating profit jumped 21.1% to ¥21,907 million, ordinary profit surged 30.3% to ¥23,644 million, and net profit attributable to shareholders grew 21.2% to ¥16,844 million. All profit lines posted double-digit growth and comfortably exceeded the company’s own projections, announced on May 15 (revenue ¥69,100 million, operating profit ¥16,800 million), beating revenue by ¥9,692 million and operating profit by ¥5,107 million. The Functional Materials segment was the standout, with operating profit soaring 30.3% to ¥10,688 million, contributing roughly half of the total, as semiconductor demand expanded. Agricultural Chemicals held flat, while Chemicals & Healthcare and the Wholesale business all reported higher sales and profits, pushing the company to record-high profit for a first quarter.

Functional Materials external revenue rose 9.6% to ¥20,654 million; operating profit jumped 30.3% to ¥10,688 million. Semiconductor anti-reflective coatings (ARC®) and multilayer materials (OptiStack®) saw strong volume expansion on buoyant customer fab utilization. Inorganic colloid “Snowtex” also grew in electronic applications. Display material “Sunever” declined, but overall segment profit broke the ¥10 billion mark.
Agricultural Chemicals revenue edged up 1.0% to ¥23,629 million; operating profit was ¥8,841 million (+2.2%). Domestic pesticides including Roundup and Glecia performed well, while overseas fungicide Raimai and animal-health API fluralaner were soft.
Chemicals revenue climbed 16.1% to ¥7,049 million; operating profit up 22.7% to ¥871 million. High-purity sulfuric acid, urea/AdBlue®, and fine-chemical TEPIC all contributed.
Healthcare revenue grew 19.0% to ¥1,858 million; operating profit soared 50.2% to ¥742 million on strong sales of anti-cholesterol API Livaro and steady contract manufacturing (FineTech).
Wholesale revenue surged 28.2% to ¥28,742 million; operating profit rose 28.7% to ¥1,399 million, driven by an expanded product portfolio.
Others external revenue slipped 2.3% to ¥3,752 million, but higher internal sales lifted total segment revenue; operating profit gained 11.3% to ¥542 million.

Total assets at quarter-end stood at ¥359,948 million, up ¥4,870 million from end-FY2026, mainly on higher trade receivables and investment securities. Liabilities increased ¥8,753 million to ¥104,780 million following a ¥10 billion bond issue. Net assets declined ¥3,883 million to ¥255,168 million due to share buybacks and dividend payments, pushing the equity ratio down 2.1 percentage points to 69.8%.
Operating cash flow was strong at ¥21,220 million (vs. ¥16,335 million a year earlier). Investing activities used ¥6,145 million, mostly for capex. Financing activities saw an outflow of ¥16,725 million, reflecting ¥17,719 million in dividends and ¥4,707 million in share repurchases.
The full-year dividend forecast for FY2027 was raised by ¥10 to ¥212 per share (interim ¥70, year-end ¥142), consistent with the mid-term plan “Vista2027” StageⅡ targets of a ≥55% payout ratio and ≥75% total return ratio. Nissan Chemical bought back 625,000 shares for ¥4,707 million during the quarter.

Management identifies the following key risks:

• Geopolitical risk: Uncertainties in the Middle East and supply-chain disruptions remain potential headwinds.
• Foreign exchange: A sharp yen appreciation could weigh on earnings given the growing overseas revenue share.
• Market volatility: Semiconductor materials demand is tied to the AI cycle; an economic slowdown could trigger a rapid decline.
• Competition: Intensifying technology competition in functional materials requires ongoing R&D investment.
• Climate: The agricultural chemicals business is sensitive to weather conditions and regulatory changes.

Full-year FY2027 consolidated forecasts, unchanged from the May 15 announcement, project revenue of ¥289,700 million (+3.6% YoY), operating profit of ¥66,800 million (+5.1%), ordinary profit of ¥68,800 million (+4.4%), and net profit of ¥51,500 million (+3.6%).
The Q1 progress rate is already high: revenue at 27.2% and operating profit at 32.8% of the full-year plan, leaving ample room for upward revisions. Demand for Functional Materials is running ahead of assumptions, and the company’s guidance is widely seen as conservative.