Sojitz Q2 FY2027: Net income jumps 40%, full-year outlook unchanged

Sojitz reported revenue of ¥1.6721 trillion for April-September 2026, up 34.8% from a year earlier. Interim profit before tax rose 60.0% to ¥86.1 billion, while net income attributable to owners of the parent increased 40.4% to ¥63.6 billion. Sojitz does not report operating profit in its IFRS earnings release, so comparisons here use pretax profit and other reported measures.

• Revenue growth drivers: Consolidation of a power and gas retailer as a subsidiary, along with increased business in energy solutions, lifted revenue.
• Chemicals gains: Higher trading volumes and market prices for various chemicals supported revenue, while rising methanol prices also contributed to profit.
• Higher gross profit: Gross profit rose 29.5% year on year to ¥222.3 billion, supporting the increase in pretax profit.
• More equity-method earnings: Income from investments accounted for under the equity method increased to ¥28.9 billion from ¥20.9 billion a year earlier, lifting pretax profit.

The increase in gross profit, together with higher equity-method investment income, drove pretax profit growth ahead of revenue growth. Selling, general and administrative expenses also increased, partly because of newly acquired subsidiaries. Interim earnings per share rose to ¥304.48 from ¥216.45 a year earlier, reflecting the profit growth in per-share results.

Profit increased sharply in chemicals and energy and social infrastructure, while automotive, consumer industry and agriculture, and some other businesses reported declines. The chart below shows the year-on-year change in interim profit attributable to owners of the parent for each segment.

Energy and Social Infrastructure posted interim profit of ¥14.1 billion, up ¥6.2 billion from a year earlier. Growth reflected the consolidation of an Australian infrastructure development business, more transactions in U.S. energy solutions, and gains from the sale of certain businesses. The addition of a power and gas retailer as a subsidiary also expanded revenue in this area.

Chemicals recorded interim profit of ¥20.1 billion, an increase of ¥9.5 billion year on year. Higher methanol prices, a contribution from Nippon A&L, and solid domestic and overseas trading all supported the gain, making chemicals the largest contributor to segment profit growth.

Retail and Consumer Services reported interim profit of ¥8.4 billion, up ¥6.5 billion from a year earlier. Tobacco trading and Vietnam’s food-service wholesale business performed well, and gains from the sale of certain businesses added to profit.

Automotive interim profit fell to just ¥32 million. Car sales in Latin America contributed to earnings, but weak performance in Australia’s used-car business and costs at businesses undergoing restructuring weighed on results.

Aerospace and Transportation Infrastructure posted interim profit of ¥6.7 billion, down partly because the previous year included a gain from the partial sale of a freight-car leasing business. Metals, Mineral Resources and Recycling increased interim profit to ¥9.5 billion, reflecting earnings related to restructuring its coking coal business. Consumer Industry and Agriculture saw interim profit decline to ¥3.8 billion as overseas fertilizer trading volumes fell. Sojitz changed its segment definitions in April 2026, and the year-earlier figures have been restated on the same basis.

Sojitz left its forecast for net income attributable to owners of the parent for FY2027 unchanged at ¥130 billion. The earnings release gives the following full-year forecasts and comparisons with the previous forecast. The release does not include results for the prior fiscal year, so those figures are not shown.

The company’s foreign-exchange assumption is ¥150 to the U.S. dollar. First-half net income attributable to owners of the parent of ¥63.6 billion represents about 49% of the full-year forecast, but first-half progress alone does not determine whether the target will be met. Sojitz cautioned that market conditions and exchange-rate movements could cause actual results to differ significantly from its forecast.

Total assets stood at ¥3.7964 trillion at the end of September, an increase of ¥148.4 billion from the end of March 2026. The equity ratio rose to 30.5% from 29.9% at the previous fiscal year-end.

Operating cash flow fell from a year earlier as working capital increased, despite cash generated from operations and dividend income. Investing cash outflows continued, including contributions to a financial solutions business and aviation-related transactions. Net interest-bearing debt rose amid new borrowing and other funding, while Sojitz says it will maintain a high proportion of long-term funding and sufficient liquidity.

The company plans an interim dividend of ¥90 and a forecast year-end dividend of ¥90, taking the annual payout to ¥180, up from ¥165 in the previous fiscal year. Under its medium-term management plan, Sojitz aims to allocate about 30% of basic operating cash flow to shareholder returns and has set a progressive dividend policy based on a 4.5% DOE. It repurchased ¥8 million of treasury shares during the first half and did not announce a large buyback.

Despite the overall profit increase, results varied by segment, while resource prices, foreign exchange and working-capital movements remain important drivers of earnings and cash flow. Sojitz said actual results could differ significantly from its outlook because of changes in domestic and overseas market conditions, exchange rates and other factors.

• Foreign exchange and market conditions: The full-year forecast assumes ¥150 per U.S. dollar. Changes in exchange rates or economic conditions in major markets could affect revenue and profit.
• Uneven performance across businesses: Weakness in Australia’s used-car business and lower overseas fertilizer volumes weighed on earnings. A recovery in individual businesses, including those facing restructuring costs, remains a challenge.
• Working capital and investment burden: Higher working capital contributed to lower operating cash flow year on year, while investment outlays continued. Balancing investment recovery with funding needs will be a focus of financial management.
• Higher interest-bearing debt: Net interest-bearing debt increased from the previous fiscal year-end. Investors will need to assess whether new investments and business expansion translate into earnings and cash generation.

A key question for the second half is whether Sojitz can sustain momentum in energy and chemicals while turning around weaker businesses and recovering cash from its investments.