| Indicator | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥999.6B | ¥964.3B | +3.7% |
| Operating Income | ¥176.3B | ¥132.5B | +33.1% |
| Ordinary Income | ¥196.1B | ¥141.5B | +38.5% |
| Net Income | ¥136.2B | ¥87.6B | +55.4% |
| ROE | 10.7% | 7.6% | - |
For the fiscal year ended March 2026, Osaka Soda recorded Revenue of ¥999.6B (YoY +35.3B +3.7%), Operating Income of ¥176.3B (YoY +43.8B +33.1%), Ordinary Income of ¥196.1B (YoY +54.5B +38.5%), and Net Income attributable to owners of parent of ¥136.2B (YoY +48.6B +55.4%), achieving a substantial profit increase. Revenue growth was limited, but gross margin improved to 33.7% from 28.9% a year earlier (+4.8pt), and operating margin expanded to 17.6% from 13.7% (+3.9pt), indicating a meaningful qualitative improvement in profitability. Margin improvements in the Basic Chemicals segment (Operating Income +172.3%) and the high-margin structure of the Healthcare Business (margin 48.9%) drove corporate profitability. Non-operating items contributed via Dividend Income received of ¥11.0B and Foreign Exchange Gains of ¥4.3B, and Extraordinary Gains included Gain on Sales of Investment Securities of ¥15.2B, which boosted Net Income but are temporary factors.
[Revenue] Revenue was ¥999.6B, a modest increase of +3.7% YoY. By segment, Basic Chemicals was the largest at ¥417.5B (constituent ratio 41.8%, YoY +10.9%), supported by strong domestic and Asia-bound sales. Healthcare was ¥146.3B (14.6%, +6.9%), aided by higher demand for pharmaceutical purification materials and analytical instruments. Conversely, Functional Chemicals was ¥286.4B (28.7%, -4.0%) and Trading & Others was ¥186.6B (18.7%, -4.0%), each declining and partially offsetting overall growth. By region, Japan was largest at ¥606.5B, followed by China ¥137.9B, Asia ¥129.1B, and Europe ¥80.7B.
[Profitability] Cost of sales was ¥662.3B, with a cost ratio of 66.3%, improving -4.8pt from 71.1% the prior year, expanding gross margin to 33.7%. SG&A was ¥160.9B (SG&A ratio 16.1%), up from ¥157.0B (16.3%) a year earlier, but rose slower than revenue, producing operating leverage. Operating Income was ¥176.3B (Operating Margin 17.6%), up +33.1% YoY. Ordinary Income was ¥196.1B, aided by Non-operating Income of ¥22.0B (including Dividend Income received ¥11.0B and Foreign Exchange Gains ¥4.3B). Extraordinary Gains totaled ¥23.0B (Gain on Sales of Investment Securities ¥15.2B, Gain on Liquidation of Subsidiaries ¥4.6B, Gain on Business Transfer ¥3.1B), while Extraordinary Losses were ¥3.7B (Impairment Loss ¥1.9B, Loss on Retirement of Fixed Assets ¥3.1B). Profit before income taxes was ¥215.3B, and after deducting Income Taxes of ¥61.0B, Net Income was ¥136.2B. In summary, the company achieved revenue and profit growth, driven particularly by improved operating profitability and contributions from one-off gains.
The Basic Chemicals segment reported Revenue ¥417.5B (YoY +10.9%), Operating Income ¥61.9B (YoY +172.3%), and margin 14.8%, a large improvement of +8.8pt from 6.0% a year ago. Recovery in markets for chlorine/alkali products and cost optimization were effective. Functional Chemicals posted Revenue ¥286.4B (YoY -4.0%), Operating Income ¥46.3B (YoY +7.1%), and margin 16.2%; despite weaker sales, margin improvement secured higher profits. Healthcare recorded Revenue ¥146.3B (YoY +6.9%), Operating Income ¥71.6B (YoY +1.8%), and margin 48.9%, maintaining outstanding high profitability and becoming the largest contributor to consolidated profits. Trading & Others had Revenue ¥186.6B (YoY -4.0%), Operating Income ¥9.5B (YoY +4.6%), and margin 5.1%, achieving higher profit despite lower sales. The segment mix shift—greater contribution from high-margin Healthcare and marked improvement in Basic Chemicals—was the main driver of company-wide margin expansion.
[Profitability] Operating Margin improved to 17.6% from 13.7% (+3.9pt), a high level for a manufacturing company. Gross Margin expanded to 33.7% from 28.9% (+4.8pt), driven by cost reduction and a favorable segment mix. ROE was 10.7%, primarily due to a substantial expansion in Net Income margin to 13.6%. [Cash Quality] Operating Cash Flow (OCF) was ¥198.8B, 1.46x Net Income of ¥136.2B, indicating good cash conversion. Of the OCF subtotal ¥234.9B, changes in working capital contributed -¥36.1B, including Accounts Receivable increase -¥3.2B, Inventory increase ¥0.1B, and Accounts Payable increase ¥14.5B. DSO (Days Sales Outstanding) is approximately 100 days, DIO (Days Inventory Outstanding) approximately 61 days, suggesting room to improve working capital efficiency. [Investment Efficiency] Capital Expenditure was ¥65.3B, 1.50x Depreciation ¥43.4B, indicating ongoing growth investment. Construction in progress was ¥31.4B, up from ¥19.8B, suggesting future capacity expansion. [Financial Soundness] Equity Ratio was 75.6%, slightly up from 75.1%, indicating very high stability. Interest-bearing debt was ¥75.6B (short-term ¥72.5B, long-term ¥3.9B), and with Cash & Deposits ¥218.6B and Short-term Marketable Securities ¥269.5B totaling ¥488.1B, the net cash position is substantial. Current Ratio was 306.0%, Quick Ratio 272.1%, indicating no liquidity issues. Debt/EBITDA was 0.34x and Interest Coverage was 141.4x, showing very strong debt tolerance.
Operating Cash Flow was ¥198.8B (YoY +16.6%), calculated from an OCF subtotal of ¥234.9B less Working Capital Changes -¥36.1B and Income Taxes Paid -¥49.7B. In working capital, Accounts Receivable increase -¥3.2B and Inventory increase ¥0.1B were cash outflows, while Accounts Payable increase ¥14.5B contributed cash inflow. Investing Cash Flow was -¥53.6B, driven mainly by Capital Expenditure -¥65.3B, partially offset by proceeds from Sales of Investment Securities ¥22.4B. Financing Cash Flow was -¥92.7B, primarily due to Share Repurchases -¥60.0B and Dividends Paid -¥27.3B. Free Cash Flow was ¥145.1B (OCF ¥198.8B + Investing CF -¥53.6B), ample to fund shareholder returns and capital investment, leading to an increase in Cash & Cash Equivalents of ¥54.9B. Ending Cash & Cash Equivalents were ¥488.0B, indicating strong liquidity. Free Cash Flow after maintenance capex (OCF less CapEx) was ¥133.5B, sufficient to cover total dividends and share repurchases of ¥87.3B.
Operating Income of ¥176.3B and Ordinary Income of ¥196.1B show an uplift of +¥19.8B, resulting from Non-operating Income ¥22.0B (including Dividend Income received ¥11.0B, Foreign Exchange Gains ¥4.3B, and other non-operating income ¥1.4B) less Non-operating Expenses ¥2.2B. Dividend Income received increased by ¥3.2B from ¥7.8B the prior year, expanding recurring income from investment securities. Foreign Exchange Gains of ¥4.3B reversed from a prior-year Foreign Exchange Loss of ¥1.1B, benefiting from yen depreciation. Of Extraordinary Gains ¥23.0B, Gain on Sales of Investment Securities ¥15.2B is a one-time factor; Gain on Liquidation of Subsidiaries ¥4.6B and Gain on Business Transfer ¥3.1B are also non-recurring. Extraordinary Losses ¥3.7B consisted of Impairment Loss ¥1.9B and Loss on Retirement of Fixed Assets ¥3.1B, both one-off charges. Comprehensive Income was ¥204.5B, ¥68.3B higher than Net Income ¥136.2B, mainly due to Other Securities Valuation Differences of ¥50.4B. Of Comprehensive Income, the portion attributable to owners of parent was ¥204.8B, indicating significant capital accumulation exceeding Net Income. OCF ¥198.8B is 1.46x Net Income ¥136.2B, suggesting limited accruals. In summary, at the ordinary level recurring items such as Dividend Income and FX gains supported results, while at the Net Income level one-off gains materially boosted profitability.
Full Year guidance is Revenue ¥1060.0B (YoY +6.0%), Operating Income ¥190.0B (YoY +7.7%), Ordinary Income ¥204.0B (YoY +4.0%), and Net Income ¥136.0B. Actuals achieved Revenue ¥999.6B (progress 94.3%), Operating Income ¥176.3B (progress 92.8%), Ordinary Income ¥196.1B (progress 96.1%), and Net Income ¥136.2B (progress 100.1%). Operating and ordinary levels were slightly below guidance, but Net Income essentially met the forecast, largely due to Extraordinary Gains ¥23.0B (including Gain on Sales of Investment Securities ¥15.2B) which compensated for shortfalls at operating levels. Reported EPS exceeded forecast: guidance EPS ¥110.70 vs. actual ¥123.96, reflecting the one-off gains recognized toward year-end. Dividend guidance was Annual ¥14.00 (pre-share-split basis); actual was ¥28.00 (same), reflecting the effect of the stock split.
Annual dividend was ¥28.00 (Interim ¥12.00, Year-end ¥16.00), on a post-5-for-1 stock split basis implemented on October 1, 2024. On a pre-split basis, annual dividend was ¥140.00 (prior year ¥95.00, +¥45.00), representing a substantive dividend increase. Payout Ratio was 23.3%, a conservative level, with total dividends of ¥24.0B against Net Income ¥136.2B, indicating high sustainability. Share repurchases totaled ¥60.0B, and treasury stock at year-end was ¥124.1B (8.1% of shares outstanding). Total shareholder returns (dividends plus buybacks) were ¥84.0B, and Total Return Ratio was 57.9% relative to Free Cash Flow ¥145.1B. FCF coverage was 1.73x, providing cushion against future performance variability. The capital policy including buybacks aims to improve ROE and capital efficiency.
Working Capital Efficiency Risk: With DSO 100 days and DIO 61 days, receivables and inventory show signs of stagnation, and working capital changes pressured OCF by -¥36.1B. If working capital demand increases with sales growth, cash generation sustainability could weaken. Accelerating receivables collection and optimizing inventory are urgent.
Segment Concentration Risk: Healthcare Operating Income ¥71.6B accounts for 40.6% of consolidated Operating Income, creating reliance on the highly profitable Healthcare margin of 48.9%. If competition intensifies or price pressure emerges in pharmaceutical purification materials and analytical instruments markets, consolidated profitability could fluctuate significantly. Market volatility in Basic Chemicals can also amplify profit swings.
Dependence on One-off Gains: Of Net Income ¥136.2B, one-off gains total ¥22.9B (Gain on Sales of Investment Securities ¥15.2B, Gain on Liquidation of Subsidiaries ¥4.6B, Gain on Business Transfer ¥3.1B), representing 16.8% of Net Income. If these contributions do not recur, Net Income levels may decline, requiring evaluation based on recurring earnings.
Profitability & Returns
| Indicator | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 17.6% | 7.8% (4.6%–12.3%) | +9.9pt |
| Net Income Margin | 13.6% | 5.2% (2.3%–8.2%) | +8.4pt |
Profitability significantly exceeds the manufacturing median, driven by the high-margin Healthcare business and margin improvement in Basic Chemicals.
Growth & Capital Efficiency
| Indicator | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 3.7% | 3.7% (-0.4%–9.3%) | +0.0pt |
Revenue growth rate is in line with the median, matching the manufacturing sector growth pace.
※ Source: Company compilation
Key point is the significant improvement in Operating Margin to 17.6% (YoY +3.9pt), with Gross Margin expansion +4.8pt and contribution from the high-margin Healthcare business indicating structural enhancement in earning power. The Basic Chemicals Operating Income increase of +172.3% also corroborates margin improvement. OCF was ¥198.8B (1.46x Net Income), Free Cash Flow ¥145.1B, and together with financial soundness (Equity Ratio 75.6%, net cash position) the company has a stable base for shareholder returns.
Conversely, of Net Income ¥136.2B, one-off gains ¥22.9B (16.8%) contributed, making next-year evaluation of recurring earnings critical. Working capital efficiency (DSO 100 days, DIO 61 days) shows substantial room for improvement, and ongoing cash outflow from working capital changes (-¥36.1B against OCF subtotal ¥234.9B) highlights the risk of higher cash demand with growth. If receivables collection and inventory optimization improve, cash generation could further strengthen and expand shareholder return capacity.
Versus full-year guidance, Revenue and Operating Income were slightly below targets but Net Income met guidance due to one-off gains. The effective dividend increase (pre-split annual ¥140, prior year ¥95) and Total Return Ratio 57.9% together with FCF coverage 1.73x indicate a sustainable shareholder return stance. Sustainability of Healthcare growth and preservation of Basic Chemicals margins will be key to medium-to-long-term earnings trends.
This report was generated by AI analyzing XBRL financial statement data to produce an automated earnings analysis. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference data compiled by the Company from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.