Resonac Q2 FY2026: Core operating profit surges 156%, raises outlook

Resonac achieved record core operating profit for the first half, with all segments improving profitability or narrowing losses. Revenue was ¥676.852 billion (up 5.4% YoY), core operating profit ¥88.753 billion (up 156.5%), operating profit ¥73.310 billion (up 124.8%), and profit attributable to owners of parent ¥48.451 billion (up 146.5%). The Semiconductor & Electronic Materials segment led growth, with revenue up 29.6% and core operating profit up 91.8%, fueled by AI demand. Mobility segment sales declined but profit surged due to restructuring. Innovation Materials grew steadily, and Chemicals narrowed losses as graphite electrode volumes recovered. Petrochemical subsidiary Crasus Chemical swung to profit on inventory gains despite a planned shutdown. Reflecting the strong first half, Resonac raised its full-year core operating profit forecast by 40% to ¥196.0 billion, while adjusting revenue down to ¥1,165.0 billion to exclude Crasus Chemical post-spinoff.

Semiconductor & Electronic Materials sales surged 29.6% to ¥298.962 billion, with core operating profit jumping 91.8% to ¥81.485 billion. Front-end materials benefited from memory market recovery and strong demand for CMP slurries. Back-end materials like epoxy encapsulants and thermal interface materials (TIM) saw volume spikes for AI servers. Device solutions, including HD media for data centers and SiC epitaxial wafers, also posted gains.

Mobility sales fell 5.6% to ¥84.621 billion, but core operating profit more than tripled to ¥4.282 billion (+227.4%). The profit surge was driven by higher demand and cost reductions in powder metallurgy and friction materials, even as the divestiture of automotive molding operations weighed on revenue.

Innovation Materials revenue grew 11.3% to ¥49.999 billion, with core operating profit up 27.5% to ¥6.304 billion, supported by solid demand for resins, functional chemicals, coatings, and ceramics.

Chemicals revenue rose 17.0% to ¥91.789 billion, while the core operating loss narrowed sharply to ¥0.612 billion from a loss of ¥8.151 billion a year earlier. Price revisions for acrylonitrile and caustic soda, along with recovering graphite electrode volumes and restructuring, helped offset still-weak electrode market conditions.

Crasus Chemical revenue declined 13.2% to ¥130.057 billion due to a once-every-four-years major maintenance turnaround. However, core operating profit swung to a ¥3.838 billion profit from a ¥0.806 billion loss, lifted by inventory valuation gains from rising naphtha prices. This segment is classified as discontinued operations ahead of its planned spinoff in October 2026.

On August 6, 2026, Resonac revised its full-year consolidated forecasts. Following the spinoff, Crasus Chemical will be treated as a discontinued operation, so full-year revenue on a continuing basis is now expected at ¥1,165.0 billion (up 11.3% YoY), down from the initial ¥1,310.0 billion. However, core operating profit was sharply upgraded by 40.0% to ¥196.0 billion (up 87.7%), operating profit to ¥160.0 billion (up 278.5%), and profit attributable to owners of parent to ¥112.5 billion (up 287.5%). The upward revision reflects further demand momentum in Semiconductor & Electronic Materials and progress in group-wide restructuring. Core operating margin is forecast to improve to 16.8% from 10.3% a year ago. Dividends per share are planned at ¥65, unchanged from the prior year, with an additional in-kind distribution of Crasus Chemical shares upon spinoff.

On July 6, 2026, Resonac announced plans to carry out a partial spinoff of wholly owned subsidiary Crasus Chemical, with the proposal to be submitted to the board of directors in late August. Over 80% of the shares will be distributed as an in-kind dividend to Resonac shareholders, with the spinoff effective October 1, 2026. After the spinoff, Resonac's equity stake will fall below 20%, and Crasus Chemical will be deconsolidated and cease to be an equity-method affiliate. By classifying Crasus Chemical as a discontinued operation, Resonac now provides continuing operations-based performance to help investors evaluate the post-spinoff business structure. The separation allows Resonac to concentrate on high-value-added fields centered on semiconductors and electronic materials, marking a major step in portfolio transformation. The gain or loss on deconsolidation is still under review.

Total assets at the interim period-end stood at ¥2,215.9 billion, up ¥109.2 billion from the previous fiscal year-end, driven by higher cash and inventories. Interest-bearing debt decreased by ¥129.5 billion to ¥956.7 billion, strengthening the balance sheet. Equity attributable to owners of parent expanded to ¥805.0 billion, lifting the equity ratio to 35.6%, supported by retained earnings and conversion of convertible bonds. Cash flow improved markedly: operating cash flow rose to ¥84.4 billion (up ¥49.7 billion YoY), and free cash flow turned positive at ¥27.4 billion, despite ongoing capex. The company plans to maintain a ¥65 annual dividend per share, supplemented by the in-kind distribution of Crasus Chemical shares, signaling a proactive shareholder return policy.

• Semiconductor market fluctuations: AI demand is robust, but sharp swings in memory markets or inventory corrections could pressure earnings.
• Oil and naphtha prices: Directly affect raw material costs in the Chemicals segment; delayed pass-through could squeeze margins.
• Currency volatility: A strengthening yen could erode export competitiveness and overseas subsidiary profits.
• Spinoff execution risk: Uncertainty around the deconsolidation gain/loss and the value of the retained Crasus Chemical stake.
• Geopolitical risks: Middle East instability and US-China trade frictions create supply chain and demand uncertainties.
• Restructuring progress: Monetization of the mobility and chemicals overhauls must stay on track.