HARIMA CHEMICALS GROUP,INC. FY2026 FY Earnings Report

クイックビュー

Executive Summary

For the fiscal year ended March 2026, revenue was ¥1,037.6B (YoY +¥27.6B +2.7%), Operating Income was ¥32.8B (YoY +¥12.0B +57.6%), Ordinary Income was ¥30.0B (YoY +¥16.7B +125.2%), and Net Income attributable to owners of the parent was ¥9.6B (YoY -¥11.9B -55.5%). Significant increases were achieved at the operating and ordinary income stages, with the operating margin improving to 3.2% (up 1.1pt from 2.1% a year earlier), indicating improved profitability. The sharp rise in Ordinary Income was primarily driven by equity-method investment gains reversing from a loss of ¥-3.1B in the prior year to ¥5.0B. Conversely, the bottom-line decline was caused by the absence of prior-year securities sale gains (¥11.8B in prior year vs ¥1.8B this year), a temporary factor. Comprehensive income was ¥44.8B (prior year ¥22.5B, +99.1%), boosted by foreign currency translation adjustments of ¥16.4B and adjustments related to retirement benefits of ¥3.0B included in Other Comprehensive Income. Gross margin improved to 22.1% (up 0.5pt from 21.6%); SG&A ratio declined to 18.9% (down 0.6pt from 19.5%), indicating progress in improving the profit structure.

業績変動要因

【売上高】 Revenue reached ¥1,037.6B (+2.7% YoY), a modest increase. By segment: Paper Chemicals ¥288.3B (+2.7%), Electronic Materials ¥137.2B (+3.2%), Rotors ¥365.3B (+2.9%), Resins & Chemical Products ¥216.7B (+1.6%)—all showing revenue growth. Paper Chemicals saw steady volumes supported by strength in strength-imparting agents and coating agents; Electronic Materials benefited from increased demand for soldering materials and semiconductor resist resins. Rotors recovered through sales of tackifying resins for adhesives and printing-ink resins. External sales composition: Rotors 35.2%, Paper Chemicals 27.8%, Resins & Chemical Products 20.9%, Electronic Materials 13.2%, Other 2.9%. The increase in foreign currency translation adjustments of ¥16.4B suggests local-currency sales at overseas subsidiaries translated into higher yen amounts; the reported revenue growth includes FX effects.

【損益】 Operating Income was ¥32.8B (+57.6% YoY). Improvement in gross margin to 22.1% (+0.5pt) and decline in SG&A ratio to 18.9% (-0.6pt) raised the operating margin to 3.2% (up 1.1pt from 2.1%). By segment, Resins & Chemical Products recovered sharply with Operating Income of ¥14.9B (+263.2% YoY, margin 6.9%), and Paper Chemicals maintained high profitability with Operating Income of ¥25.4B (+19.5% YoY, margin 8.8%). Rotors posted Operating Income of ¥0.4B (-93.9% YoY, margin 0.1%), a steep decline likely due to market fluctuations and slowing customer demand. Ordinary Income of ¥30.0B (+125.2% YoY) was significantly contributed by equity-method gains of ¥5.0B (turnaround of ¥8.1B from prior-year loss of ¥-3.1B), while interest expense increased to ¥11.0B (prior year ¥9.9B, +¥1.1B). Extraordinary items netted +¥1.8B (Extraordinary gains ¥5.1B - Extraordinary losses ¥3.3B), including ¥3.2B gain on sale of fixed assets and ¥1.8B gain on sale of investment securities; prior year included a large ¥11.8B gain on sale of investment securities which was absent this year. After deducting corporate taxes of ¥8.3B, Net Income attributable to owners of the parent was ¥9.6B (-55.5% YoY), reflecting the reversal of prior-year large asset sale gains. Loss attributable to non-controlling interests was ¥0.0B (prior year profit ¥0.2B) and immaterial. In conclusion, recurring earning power improved producing revenue and operating income growth, but bottom-line was lower due to one-off factors.

セグメント別分析

Paper Chemicals: Revenue ¥288.3B (+2.7% YoY), Operating Income ¥25.4B (+19.5% YoY), operating margin 8.8%; largest profit contributor among segments, sustaining high profitability supported by stable demand for strength-imparting agents and coating agents and implemented price revisions. Resins & Chemical Products: Revenue ¥216.7B (+1.6% YoY), Operating Income ¥14.9B (+263.2% YoY), margin 6.9%—a substantial improvement from prior-year low profitability (1.9%) driven by better product mix in coatings and printing-ink resins and effective cost pass-through. Electronic Materials: Revenue ¥137.2B (+3.2% YoY), Operating Income ¥3.7B (-2.1% YoY), margin 2.7%—revenue increased but profit slightly decreased, possibly due to raw material cost increases offsetting demand gains for soldering materials and semiconductor resist resins. Rotors: Revenue ¥365.3B (+2.9% YoY), Operating Income ¥0.4B (-93.9% YoY), margin 0.1%—earnings collapsed from ¥6.2B to ¥0.4B due to softening markets for tackifying resins and printing-ink resins and decelerating customer demand. Other segments (e.g., real estate management) Revenue ¥40.7B (-1.5% YoY), Operating loss ¥0.1B (prior-year profit ¥0.2B) resulting in a small negative. Consolidated operating income after corporate adjustments was ¥32.8B, after inventory-related adjustments +¥3.7B and corporate expense allocations -¥11.5B. Earnings disparity across segments widened considerably, with high margins in Paper Chemicals contrasting with very low returns in Rotors.

主要財務指標

【収益性】Operating margin 3.2%, Revenue-to-Ordinary-Income ratio 2.9%, Net Income margin attributable to owners of the parent 0.9%; operating-stage improvement is notable. ROE 2.3% (prior year ROE 2.0%) remains low but shows improvement associated with recovery in net income attributable to owners of the parent (prior-year-adjusted recovery +207.5%; excluding extraordinary items approximately +150%). ROA (on Ordinary Income basis) doubled to 3.0% (prior year 1.3%). Gross margin 22.1% improved by 0.5pt, SG&A ratio declined to 18.9% (-0.6pt), indicating healthier profit structure. 【Cash Quality】Operating Cash Flow (OCF) ¥78.6B is 8.2x Net Income ¥9.6B, and OCF-to-Operating-Income ratio is 2.4x. From OCF subtotal (pre-working-capital) ¥91.5B, after corporate tax payments ¥4.8B and net working capital movements (inventory decrease ¥5.3B + trade receivables decrease ¥3.4B - trade payables decrease ¥5.2B = net +¥3.5B), cash generation improved markedly. Accrual ratio ((OCF - Net Income)/Total Assets) is +6.7%, indicating strong cash backing for profits. 【Investment Efficiency】Capex ¥35.8B, Depreciation ¥30.0B, Capex/Depreciation ratio 1.19x—renewal investment slightly exceeds depreciation. R&D ¥28.7B (2.8% of revenue) slightly increased from ¥27.8B prior year. Total asset turnover 1.01x unchanged year-over-year, indicating stable asset efficiency. 【Financial Soundness】Equity Ratio 40.3% (prior year 37.3%, +3.0pt) improved. Interest-bearing debt (short-term borrowings ¥209.8B + long-term borrowings ¥169.8B = ¥379.6B) to equity ratio improved to 91.5% (prior year 104.8%), Debt/Equity ratio 0.91x. Current ratio 130.3%, Quick ratio ((current assets - inventory)/current liabilities) 104.2% indicating acceptable short-term payment capacity, but short-term borrowings/current liabilities ratio 51.2% shows short-term debt concentration persists. Cash and deposits ¥62.6B vs short-term borrowings ¥209.8B yields cash/short-term borrowings ratio 0.30x, indicating limited refinancing capacity.

キャッシュフロー分析

OCF ¥78.6B (prior year ¥61.5B, +27.9%) increased significantly. From OCF subtotal ¥91.5B (prior year ¥75.6B), working capital movements contributed via inventory decrease ¥5.3B (prior year inventory increase ¥4.4B), trade receivables decrease ¥3.4B (prior year decrease ¥19.2B), while trade payables decreased ¥5.2B (prior year decrease ¥2.7B) offset part of the benefit. Corporate tax payments ¥4.8B (prior year ¥7.4B) were lighter. Investing Cash Flow was -¥17.1B (prior year -¥49.8B), with restrained capex ¥35.8B (prior year ¥54.6B) and proceeds from sale of fixed assets ¥6.1B (prior year ¥0.1B) reducing outflows. Proceeds from sale of investment securities ¥13.4B (prior year ¥22.6B) also contributed. Free Cash Flow (OCF + Investing CF) was ¥61.5B (prior year ¥11.7B), roughly 5.3x, comfortably exceeding dividend payments total ¥10.4B (dividend to owners ¥10.2B + dividends to non-controlling interests ¥0.2B). Financing Cash Flow was -¥48.5B (prior year -¥36.7B), reflecting net decrease in short-term borrowings ¥72.3B (prior year net increase ¥23.4B) and net increase in long-term borrowings ¥37.4B (borrowings ¥47.4B - repayments ¥8.4B; prior year net increase ¥3.3B), indicating a shift from short-term to long-term funding. Lease liability repayments ¥4.5B and dividend payments ¥10.2B also reduced financing cash flow. Cash and deposits increased from ¥47.5B at the beginning of the period to ¥62.6B at the end, +¥15.2B; including foreign exchange translation adjustments ¥2.4B, net increase ¥15.3B (difference vs reported figures ¥0.1B). EBITDA (adding depreciation ¥30.0B) was ¥62.8B, with OCF/EBITDA ratio 1.25x, favorable. Working capital efficiency: DSO 73 days, DIO 108 days, DPO 42 days, Cash Conversion Cycle (CCC) 139 days (DSO + DIO - DPO); CCC has contracted due to inventory reduction relative to prior year but remains long with room for improvement.

収益の質

Recurring earnings were driven by Paper Chemicals margin 8.8% and substantial recovery in Resins & Chemical Products (margin 6.9%), accounting for roughly 80% of Operating Income ¥32.8B. Non-operating income ¥13.8B (1.3% of revenue) includes dividend income ¥1.0B, foreign exchange gains ¥0.7B, and equity-method investment income ¥5.0B. The equity-method turnaround from a ¥-3.1B loss to a ¥5.0B gain (¥8.1B swing) materially uplifted Ordinary Income but is influenced by associate performance and contains transitory elements. Non-operating expenses ¥16.7B (1.6% of revenue) include interest expense ¥11.0B (prior year ¥9.9B, +¥1.1B), foreign exchange losses ¥1.6B and other ¥3.0B, reflecting higher interest burden from increased interest-bearing debt. Extraordinary gains ¥5.1B (0.5% of revenue) comprise gain on sale of fixed assets ¥3.2B and gain on sale of investment securities ¥1.8B; Extraordinary losses ¥3.3B (0.3% of revenue) include impairment losses ¥3.0B, valuation losses on investment securities ¥1.5B, and loss on disposal of fixed assets ¥1.1B. Net extraordinary items +¥1.8B represent about 18.8% of Net Income attributable to owners of the parent ¥9.6B—material but not dominant; prior year included large investment securities sale gains ¥11.8B and extraordinary gains ¥12.8B, so current-year bottom-line decline reflects that reversal. The gap between Ordinary Income ¥30.0B and Net Income attributable to owners of the parent ¥9.6B (a 68.0% divergence) is explained by tax burden ¥8.3B (effective tax rate 26.2%) and net extraordinary items +¥1.8B. Comprehensive Income ¥44.8B greatly exceeds Net Income ¥9.6B; Other Comprehensive Income ¥35.2B comprises foreign currency translation adjustments ¥16.4B, retirement benefit adjustments ¥3.0B, and valuation difference on investment securities ¥2.0B—many non-cash items. OCF being 8.2x Net Income and OCF subtotal ¥91.5B being 2.8x Operating Income ¥32.8B indicates solid cash backing of profits. Accrual ratio +6.7% reflects working capital improvement and depreciation contribution; quality of earnings is judged good. Excluding one-off items (extraordinary items and equity-method gains/losses), recurring profit estimate is Operating Income ¥32.8B + non-operating excluding equity-method adjustment approx. -¥8.8B ≈ ¥24B, representing a sustainable earnings baseline.

業績予想・ガイダンス

Company plan for FY2027 (year ending March 2027) forecasts Revenue ¥1,100.0B (vs this year +6.0%), Operating Income ¥35.0B (+6.6%), Ordinary Income ¥28.0B (-6.6%), Net Income attributable to owners of the parent ¥26.5B (EPS forecast ¥109.07, DPS forecast ¥21). Progress toward the plan at fiscal year-end corresponds to 94.3% for revenue and 93.7% for Operating Income; since these are not Q2 figures, direct progress assessment is difficult, but the plan assumes full-year revenue and operating income growth. The Operating Income target implies an increase of ¥2.2B from ¥32.8B; assuming gross margin and SG&A ratio hold, feasibility is high. Ordinary Income is planned at ¥28.0B (-¥2.0B vs this year), likely conservatively assuming reduction in equity-method gains and higher interest burden. Net Income target ¥26.5B (vs this year ¥9.6B, +¥16.9B) assumes normalization from this year's one-off compression (prior-year large asset sale gain reversal). EPS forecast ¥109.07 is calculated on outstanding shares 26,080 thousand - treasury stock 1,770 thousand = year-end shares 24,310 thousand (¥2.65B ÷ 24,310 thousand ≒ ¥109.0). DPS forecast ¥21 may indicate only interim dividend; current year actual DPS ¥42 (interim ¥21 + year-end ¥21) matching prior year suggests full-year dividend could remain ¥42 if company maintains the full-year payout. Using Net Income ¥26.5B and shares 24,310 thousand, DPS ¥42 would imply payout ratio 38.5%, whereas DPS ¥21 implies 19.2%. This year's payout ratio is roughly 134% by simple calculation (total dividends ¥10.2B ÷ Net Income ¥9.6B) because Net Income was depressed by one-offs; next year is expected to normalize. Order backlog and contract liability data are not disclosed, so evaluation for manufacturing/defense orders cannot be performed. Regional sales and geographic risk details are not disclosed; guidance assumptions for exchange rates and raw material prices are not specified. Company notes state: "Statements regarding future outlook are based on currently available information and certain assumptions deemed reasonable, and actual results may differ significantly due to various factors," recognizing market, FX and raw material price volatility as risk factors.

株主還元

Dividends: interim ¥21, year-end ¥21, total ¥42 (same as prior year). Against Net Income attributable to owners of the parent ¥9.6B, total dividends to owners ¥10.2B imply a payout ratio of about 106%. However, this reflects temporary suppression of Net Income; OCF ¥78.6B is about 7.7x total dividends, supporting dividend sustainability. With cash and deposits ¥62.6B and stable OCF generation, financial capacity to maintain dividends is adequate. If next fiscal year's DPS forecast ¥21 refers only to interim dividend, full-year dividend may remain ¥42 and payout ratio vs forecasted Net Income ¥26.5B would be 38.5%—a reasonable level. No share buybacks are confirmed; total return ratio equals payout ratio. With BPS ¥1,678.31 and DPS ¥42, dividend yield (book-value implied, stock price not disclosed) is approximately 2.5%. No historical series is provided to ascertain consecutive dividend increases; the company maintained prior-year level this year and plans to maintain it next year, indicating a stable dividend policy. Despite low ROE 2.3%, dividend continuity suggests a strategy to balance BPS growth and dividend stability.

リスク要因

1. Leverage risk: Interest-bearing debt ¥379.6B (short-term borrowings ¥209.8B + long-term borrowings ¥169.8B) vs equity ¥415.1B, Debt/Equity 0.91x, interest-bearing debt/EBITDA 6.05x (¥379.6B ÷ ¥62.8B)—a high leverage level. Interest expense ¥11.0B equals 33.5% of Operating Income ¥32.8B; rising interest rates could compress earnings. Short-term borrowings ¥209.8B account for 51.2% of current liabilities ¥409.6B; relative to cash and deposits ¥62.6B, refinancing capacity is limited. Although a shift from short-term to long-term borrowings progressed this year (short-term -¥72.3B, long-term +¥37.4B), short-term debt concentration remains and resilience to financial market volatility is weak.

2. Working capital efficiency risk: Trade receivables ¥206.7B, inventories ¥106.7B (finished goods ¥106.7B + raw materials ¥133.8B = ¥240.5B, though only ¥106.7B is recorded on the BS), trade payables ¥93.3B, resulting in CCC 139 days and prolonged working capital exposure. DIO 108 days and DSO 73 days indicate substantial room for improvement. In phases of working capital increase, OCF can be strained, making growth investments and dividend funding difficult. While this year working capital contributed positively (net +¥3.5B), this was driven by temporary inventory reduction and not yet structural efficiency improvement.

3. Segment earnings volatility: The Rotors business, while largest by revenue at ¥365.3B, generated only ¥0.4B operating income (0.1% margin), a 93.9% drop from ¥6.2B previously, showing fragility. Market fluctuations and weakening customer demand affected the business, making the company-wide profitability vulnerable if Rotor turnaround is delayed. Paper Chemicals and resins segments maintain high margins (8.8% and 6.9%), but volatility in raw material and energy costs directly impacts gross margin and could reverse this year’s improvement (22.1%).

業種ベンチマーク（参考・当社調べ）

収益性・リターン

Both operating margin and net margin are well below industry medians, placing the company in the lower tier on profitability.

成長性・資本効率

Revenue growth slightly trails the industry median and is around an average pace within the sector.

※Source: Company compilation

決算上の注目ポイント

1. Continued improvement in fundamental earning power and operating efficiency: Operating margin improved from 2.1% to 3.2% (+1.1pt), gross margin +0.5pt, SG&A ratio -0.6pt, indicating strengthening of the profit structure. Profitability improvements in Paper Chemicals (margin 8.8%) and Resins & Chemical Products (margin 6.9%, improved sharply from 1.9%) suggest successful price revisions and established cost pass-through. However, operating margin 3.2% remains 4.6pt below industry median 7.8%, with Rotor’s very low margin (0.1%) dragging down the consolidated average. Achievement of next-year plan (Operating Income ¥35.0B, margin steady at 3.2%) depends critically on Rotors turnaround and expanding share of high-margin segments.

2. Significant improvement in cash generation and securing financial flexibility: OCF ¥78.6B (prior year ¥61.5B, +27.9%), Free Cash Flow ¥61.5B (prior year ¥11.7B) substantially exceeds dividends ¥10.2B. OCF/Operating Income 2.4x and OCF/EBITDA 1.25x indicate solid cash backing and was aided by normalization of working capital (inventory decrease ¥5.3B). Nonetheless, interest-bearing debt/EBITDA 6.05x and short-term borrowings ¥209.8B vs cash ¥62.6B (cash/short-term borrowings 0.30x) highlight leverage and liquidity challenges. Although refinancing to long-term borrowings progressed (short-term -¥72.3B, long-term +¥37.4B), short-term debt ratio remains high at 51.2%; reducing refinancing risk should be a priority in next fiscal-year financial strategy. Continued cash generation should allow both debt reduction and dividend maintenance.

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