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Introduction & Market Context
Sekisui Chemical Co Ltd (TYO:4204) reported record first-quarter results for fiscal year 2025 in a presentation delivered by Representative Director Ikusuke Shimizu on July 31, 2025. The company achieved all-time high Q1 net sales and operating profit despite facing significant foreign exchange challenges and mixed market conditions across its business segments.
The presentation revealed that automobile manufacturing was slightly below expectations, while smartphone shipments exceeded forecasts. Housing visitors declined to 98% year-over-year compared to 105% in Q1 FY2024, reflecting softening conditions in the residential market. The company also noted that the direct impact of recent US tariff measures is expected to be minimal on its operations.
Quarterly Performance Highlights
Sekisui Chemical reported record Q1 net sales of ¥305.1 billion, an increase of ¥6.3 billion year-over-year. Operating profit also reached a record high of ¥21.2 billion, up ¥1.0 billion from the previous year. However, ordinary profit decreased to ¥20.2 billion (down ¥6.3 billion) due to foreign exchange losses, while profit attributable to owners fell to ¥13.1 billion (down ¥10.6 billion).
As shown in the following financial overview:
The company’s performance was impacted by currency fluctuations, with the yen strengthening against major currencies. The Q1 FY2025 forex rate was ¥145/US$ and ¥164/€, compared to ¥156/US$ and ¥168/€ in Q1 FY2024. The company noted that each ¥1 depreciation in the value of the yen against the USD increases operating profit by approximately ¥500 million per year.
For the first half of FY2025, Sekisui Chemical forecasts net sales of ¥639.2 billion (up ¥10.1 billion year-over-year) and operating profit of ¥48.9 billion (up ¥0.2 billion), both expected to reach record highs despite falling slightly below initial plans.
Segment Analysis
The High Performance Plastics (HPP) segment is projected to expand primarily in the Mobility field in Q2, with net sales forecast to increase from ¥221.1 billion to ¥225.4 billion year-over-year for the first half. Despite a partial slowdown in market conditions, the segment expects year-on-year increases in sales volumes and product mix, with efforts to control raw material costs and fixed expenses offsetting foreign exchange losses.
The Housing segment is benefiting from increased unit prices and growth in the Renovation Business, which is helping to offset a projected decrease in new houses sold in Q2. The company reported that smart house-related indicators remain strong at 103% for detached housing and unit prices.
The Urban Infrastructure & Environmental Products (UIEP) segment is projecting record high operating profit in the first half despite weak domestic housing and non-residential market conditions. This performance is driven by efforts to secure margins through new pricing strategies, with a focus on expanding sales of prioritized products such as earthquake-resistant polyethylene pipes and water storage tanks in Japan, and new CPVC products in Europe.
The Medical segment faces challenges, with net sales decreasing due to weak demand for infectious disease testing kits in Japan and the US, as well as deteriorating market conditions in China. However, the company reports strong trends in pharmaceutical ingredients and drug development solution orders.
Strategic Initiatives & Outlook
Sekisui Chemical is focusing on three strategic fields across its business units: Electronics, Mobility, and Industrial. The company provided detailed KPIs for each area, showing positive trends in non-LCD applications, labor-saving products, and other growth drivers.
In the capital investment area, the company plans to increase expenditures significantly, with projections showing a rise from ¥70.3 billion in FY2024 to ¥105 billion in FY2025 (a ¥34.7 billion increase). Research and development spending is also set to increase from ¥43.8 billion to ¥45 billion.
Financial Position & Shareholder Returns
Sekisui Chemical maintains a strong balance sheet, with the presentation detailing changes in assets, liabilities, and cash flows. The company generated improved cash flows from operating activities, which increased from ¥4.9 billion to ¥8.3 billion year-over-year in Q1. However, cash flows from investing activities decreased from -¥6.0 billion to -¥14.4 billion, reflecting increased capital investments.
The company announced plans to increase its interim dividend to ¥40 per share, up ¥3 from the previous year, demonstrating confidence in its financial outlook despite challenges in certain segments. This aligns with Sekisui Chemical’s track record of 34 consecutive years of dividend payments, as noted in recent market analysis.
Looking ahead, management expects the company to maintain its record-setting performance trajectory through the first half of FY2025, though they acknowledge potential production shortfalls in Q2 and ongoing challenges from foreign exchange fluctuations. The company’s stock closed at ¥2,739.5 on October 15, 2025, near its 52-week high of ¥2,939.5, suggesting continued investor confidence despite these challenges.
Full presentation:
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