Interim report
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Note : This document has been translated from the Japanese original for reference purposes only . In the event of any discrepancy between this translated document and the Japanese original , the original shall prevail . August 7 , 2026 Consolidated Financial Results for the First Three Months of the Fiscal Year Ending March 31 , 2027 ( Under Japanese GAAP ) Tokyo Stock Exchange https://www.denka.co.jp/eng Company name : Denka Co. , Ltd. Listing : Securities code : 4061 URL : Representative : Inquiries : Telephone : Ikuo Ishida , Representative Director , President Hiroyuki Yamamoto , General Manager , Corporate Communications Dept. + 81-3-5290-5511 Scheduled date to commence dividend payments : Preparation of supplementary material on financial results : Holding of financial results briefing : Yes Accounting Standards F FASF MEMBERSHIP Yes ( for equity analysts and institutional investors ) ( Yen amounts are rounded down to millions , unless otherwise noted . ) 1. Consolidated financial results for the first three months of the fiscal year ending March 31 , 2027 ( from April 1 , 2026 to June 30 , 2026 ) ( 1 ) Consolidated operating results ( cumulative ) ( Percentages indicate year - on - year changes . ) Profit attributable to Net sales Three months ended Millions of yen % Operating profit Millions of yen Ordinary profit owners of parent % Millions of yen % Millions of yen % June 30 , 2026 June 30 , 2025 96,977 94,067 3.1 ( 1.2 ) 10,993 2,302 377.6 9,475 466.8 2,843 ( 43.2 ) ( 51.2 ) 1,671 ( 53.7 ) 5,001 122.2 Note : Comprehensive income For the three months ended June 30 , 2026 : For the three months ended June 30 , 2025 : ¥ 2,986 million [ 271.1 % ] ¥ 804 million [ ( 90.4 ) % ] Basic earnings per share Diluted earnings per share Three months ended Yen Yen June 30 , 2026 June 30 , 2025 32.98 58.04 ( 2 ) Consolidated financial position Total assets Net assets Equity ratio As of June 30 , 2026 March 31 , 2026 Reference : Millions of yen 698,793 681,006 Millions of yen 336,864 338,826 Equity As of June 30 , 2026 : As of March 31 , 2026 : ¥ 309,778 million ¥ 310,709 million % 44.3 45.6
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2. Cash dividends Annual dividends per share First quarter-end Second quarter-end Third quarter-end Fiscal year-end Total Yen Yen Yen Yen Yen Fiscal year ended March 31, 2026 – 50.00 – 50.00 100.00 Fiscal year ending March 31, 2027 – Fiscal year ending March 31, 2027 (Forecast) 50.00 – 50.00 100.00 Note: Revisions to the forecast of cash dividends most recently announced: None 3. Forecasts for consolidated financial results for the fiscal year ending March 31, 2027 (from April 1, 2026 to March 31, 2027) (Percentages indicate year-on-year changes.) Net sales Operating pr ofit Ordinary profit Profit attributable to owners of parent Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen First half 205,000 4.2 17,000 74.5 11,000 62.0 0 (100) 0.00 Full fiscal year 450,000 17.1 30,000 14.4 20,000 3.7 16,000 1.9 185.67 Note: Revisions to the most recently announced earnings forecast: Yes For details on the earnings forecast, please refer to the Results Presentation of FY2026 1Q (The 1st 3 Months of the Fiscal year ending March 2027) and Notice Regarding Revision of Consolidated Financial Forecasts for the First Half of the Fiscal Year Ending March 31, 2027, which were announced today. Please note that the full-year consolidated financial results forecast shown above refers to the one announced on May 13, 2026, and has not been revised at this time. The Company plans to revise it at the time of the announcement of the consolidated financial results for the first six months of the fiscal year ending March 31, 2027.
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* Notes (1) Significant changes in the scope of consolidation during the period: None Newly included: 0 companies (Company name) Excluded: 0 companies (Company name) (2) Adoption of accounting treatment sp ecific to the preparation of quarterly consolidated financial statements: None (3) Changes in accounting policies, change s in accounting estimates, and restatement (i) Changes in accounting po licies due to revisions to accounting standards and other regulations: None (ii) Changes in accounting polici es due to other reasons: None (iii) Changes in accounting estimates: None (iv) Restatement: None (4) Number of issued shares (common shares) (i) Total number of issued shares at the end of the period (including treasury shares) As of June 30, 2026 88,555,840 shares As of March 31, 2026 88,555,840 shares (ii) Number of treasury shar es at the end of the period As of June 30, 2026 2,355,271 shares As of March 31, 2026 2,356,126 shares (iii) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year) Three months ended June 30, 2026 86,200,406 shares Three months ended June 30, 2025 86,176,092 shares * Review of the Japanese-language originals of the attached quarterly consolidated financial statements by certified public accountants or an audit firm: Yes (voluntary) * Proper use of earnings forecasts, and other special matters (Notes on statements about the future) Earnings forecasts and other forward-looking statements in this report are based on information presently available to management and assumptions that management deems reasonable. Actual earnings and other forecasts may differ significantly from those in this report in accordance with numerous factors.
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1 Table of Contents – Attachments 1. Qualitative Information on Financial Results for the Period under Review .............................................. 2 (1) Operating Results ......................................................................................................... ......................... 2 (2) Financial Position .................................................................................................................................. 3 (3) Consolidated Financial Results Forecast and Other Forward-Looking Information ............................. 3 2. Quarterly Consolidated Financial Statements and Principal Notes .......................................................... 5 (1) Quarterly Consolidated Balance Sheet ................................................................................................. 5 (2) Quarterly Consolidated Statements of Income and Comprehensive Income ....................................... 7 Quarterly Consolidated Statement of Income Three Months Ended June 30 ............................................................................................................. 7 Quarterly Consolidated Statement of Comprehensive Income Three Months Ended June 30 ............................................................................................................. 8 (3) Notes to Quarterly Consolidated Financial Statements ......................................................................... 9 Notes on going concern assumption ................................................................................................... 9 Notes in case of significant changes in shareholders’ equity ............................................................. 9 Segment information, etc. ................................................................................................................. 10 Notes on statement of cash flows ...................................................................................................... 11
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2 1. Qualitative Information on Financial Results for the Period under Review (1) Operating Results During the three months ended June 30, 2026, the Japanese economy experienced a moderate recovery as personal consumption and capital investment showed signs of improvement while market prices for crude oil and petroleum products soared due to escalating tensions in the Middle East. The global economy as a whole showed a rebound. However, the outlook is uncertain due to factors such as developments in U.S. trade policy and the situation in the Middle East. Amid such circumstances, the Group has launched Phase 2 of its “Mission 2030” management plan starting this fiscal year. This involves a review of the “Mission 2030” management plan, which began in FY2023, in light of rapid changes in the business environment and other factors. The three-year period from FY2026 to FY2028 has been designated as Phase 2, during which we will focus our resources on select priority areas and work to "rebuild our earning power" and "strengthen foundations for a new growth stage" to drive further growth. For the three months ended June 30, 2026, net sales were ¥96,977 million, up ¥2,910 million, or 3.1%, year on year mainly due to higher sales volumes, particularly in electronics and innovative products, as well as sales price reviews in response to soaring raw material and fuel prices, and increased proceeds resulting from the depreciation of the yen. In terms of earnings, in addition to these factors, there was a temporary profit- boosting effect from inventory effects. Consequently, operating profit was ¥10,993 million (up ¥8,691 million, or 377.6%, year on year), and ordinary profit was ¥9,475 million (up ¥7,803 million, or 466.8%, year on year). Profit attributable to owners of parent was ¥2,843 million (down ¥2,158 million, or 43.2%, year on year), mainly due to the recording of an extraordinary loss related to Denka Performance Elastomer LLC, a U.S.- based subsidiary that has elected not to restart production at its chloroprene rubber manufacturing facilities for an indefinite period. [Electronics & Innovative Products Division] Demand for products in this division continued to increase for AI-related applications and power infrastructure. Sales of spherical silica and spherical alumina remained strong with the expansion of demand for semiconductors for AI applications. Sales of high-performance film also increased, supported by a gradual recovery in demand for electronic component applications. In addition, sales of acetylene black increased due to rising demand for high-voltage cable applications and energy storage systems (ESS) applications for data centers, and sales of ALSINK, a high-reliability heat dissipating plate, increased due to a recovery in demand for electric railway applications and growth in demand for direct current transmission applications. Sales of SNECTON, a low-dielectric organic insulating resin, also remained strong. As a result, division net sales increased ¥2,766 million, or 11.7%, year on year to ¥26,377 million, and operating profit increased ¥1,213 million, or 49.2%, year on year to ¥3,680 million. [Life Innovation Division] Sales volume of POCT test reagents declined year on year due to a decline in the number of tests conducted. Sales of other test reagents resulted in a year-on-year increase, supported by a gradual recovery in demand and the addition of KAINOS Laboratories, Inc. as a consolidated subsidiary. As a result, division net sales increased ¥409 million, or 6.2%, year on year to ¥6,994 million, and operating profit decreased ¥11 million, or 5.0%, year on year to ¥210 million. [Elastomers & Infrastructure Solutions Division] Demand for chloroprene rubber remained roughly on par with the previous fiscal year’s level. However, profitability improved as high-cost manufacturing facilities at a U.S.-based subsidiary remained suspended. In addition, sales of corrugated pipes for agricultural and civil engineering applications increased, but sales of special cement additives fell below the previous fiscal year’s level due to construction delays and other factors.
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3 As a result, division net sales decreased ¥2,134 million, or 8.3%, year on year to ¥23,669 million, and operating profit was ¥2,741 million, an increase of ¥4,137 million year on year (operating loss in the corresponding period of the previous fiscal year was ¥1,395 million). [Polymer Solutions Division] In response to soaring raw material and fuel costs, the division revised the selling price of each product. In terms of sales volume, sales of polystyrene resins contributed as a result of the addition of TOYO STYRENE Co., Ltd. as a consolidated subsidiary. On the other hand, sales of MS resins by Denka Singapore Pte. Ltd. fell below the previous fiscal year’s level due to a delayed recovery in demand. Shipments of styrene monomer declined due to scheduled maintenance, and sales of AS and ABS resins fell below the previous fiscal year’s level. Also, sales of sheets for food wrapping materials and their processed products remained roughly on par with the previous fiscal year’s level. As a result, division net sales increased ¥2,287 million, or 6.8%, year on year to ¥36,083 million, and operating profit increased ¥3,221 million, or 805.3%, year on year to ¥3,621 million due partly to a temporary profit-boosting effect from inventory effects. [Others Division] Transaction volumes of Akros Trading Co., Ltd. and other trading companies remained roughly unchanged year on year. As a result, division net sales decreased ¥418 million, or 9.8%, year on year to ¥3,852 million, and operating profit increased ¥153 million, or 26.0%, year on year to ¥743 million. (2) Financial Position Total assets at the end of the three months ended June 30, 2026 increased by ¥17,786 million from the end of the previous fiscal year to ¥698,793 million. Current assets increased by ¥8,016 million from the end of the previous fiscal year to ¥268,092 million, mainly due to an increase in inventories. Non-current assets increased by ¥9,769 million from the end of the previous fiscal year to ¥430,700 million, mainly due to an increase in property, plant and equipment. Liabilities increased by ¥19,748 million from the end of the previous fiscal year to ¥361,929 million, mainly due to an increase in interest-bearing debt. Net assets, including non-controlling interests, decreased by ¥1,962 million from the end of the previous fiscal year to ¥336,864 million. As a result, the equity ratio decreased from 45.6% at the end of the previous fiscal year to 44.3%. (3) Consolidated Financial Results Forecast and Other Forward-Looking Information We have revised the consolidated financial results forecast for the first six months of the fiscal year ending March 31, 2027 (from April 1, 2026 to September 30, 2026), which was previously announced on May 13, 2026, taking into account recent performance trends and other factors, as follows.
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4 A. Forecasts for consolidated financial results for the first six months of the fiscal year ending March 31, 2027 Net sales Operating profit Ordinary profit Profit attributable to owners of parent Basic earnings per share Previous forecast (A) Millions of yen Millions of yen Millions of yen Millions of yen Yen 210,000 12,000 7,000 0 0.00 Revised forecast (B) 205,000 17,000 11,000 0 0.00 Amount of change (B−A) (5,000) 5,000 4,000 – Change (%) (2.4)% 41.7% 57.1% – (Reference) Previous consolidated results (first six months of fiscal year ended March 31 , 2026) 196,699 9,740 6,791 3,902 45.28 Note: The above forecasts are based on information currentl y available to the Company and certain assumptions deemed reasonable. Actual results may differ significantly due to various factors. B. Reasons for revising the forecasts Regarding the consolidated financial forecasts for the first half of the fiscal year ending March 31, 2027, while demand for Electronics & Innovative Products remains steady, the Company anticipate a temporary positive impact on inventory valuation due to sales price revisions implemented in Polymer Solutions products and others to address the rapid rise in raw material and fuel prices caused by the situation in the Middle East, demand for Life Innovation products is expected to fall below initial projections. As a result, net sales are expected to be lower than the previously announced forecast, while operating income and ordinary income are expected to exceed the previously announced forecast. In addition, net income attributable to owners of the parent is expected to remain unchanged from the previously announced forecast, as the Company anticipate recording an extraordinary loss, such as a loss on liquidation of business, for Denka Performance Elastomer LLC, a U.S.-based subsidiary that has elected not to restart production at its facilities for an indefinite period. Note that the full-year consolidated financial forecasts have not been revised at this time. The Company plan to review the forecasts at the time of the second-quarter financial results announcement.
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5 2. Quarterly Consolidated Financial Statements and Principal Notes (1) Quarterly Consolidated Balance Sheet (Millions of yen) As of March 31, 2026 As of June 30, 2026 Assets Current assets Cash and deposits 35,270 37,004 Notes and accounts receivable - trade, and contract assets 88,299 83,277 Merchandise and finished goods 84,661 87,802 Work in process 7,235 10,622 Raw materials and supplies 35,500 37,076 Other 9,367 12,582 Allowance for doubtful accounts (258) (273) Total current assets 260,075 268,092 Non-current assets Property, plant and equipment Buildings and structures, net 87,304 87,918 Machinery, equipment and vehicles, net 106,783 106,074 Tools, furniture and fixtures, net 5,264 5,392 Land 61,412 61,409 Leased assets, net 3,424 6,317 Construction in progress 78,997 85,572 Total property, plant and equipment 343,187 352,684 Intangible assets Goodwill 2,246 2,218 Patent right 264 257 Software 1,701 1,856 Other 841 786 Total intangible assets 5,053 5,117 Investments and other assets Investment securities 47,463 45,862 Long-term loans receivable 980 981 Retirement benefit asset 9,032 8,609 Deferred tax assets 6,822 8,331 Other 8,670 9,393 Allowance for doubtful accounts (278) (278) Total investments and other assets 72,690 72,898 Total non-current assets 420,930 430,700 Total assets 681,006 698,793
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6 (Millions of yen) As of March 31, 2026 As of June 30, 2026 Liabilities Current liabilities Notes and accounts payable - trade 43,005 46,275 Short-term borrowings 51,797 58,347 Commercial papers 20,000 24,000 Current portion of long-term borrowings 150 15,250 Current portion of bonds payable 15,000 15,000 Income taxes payable 7,520 3,699 Accrued consumption taxes 491 395 Provision for bonuses 3,647 6,445 Other 43,484 41,475 Total current liabilities 185,096 210,889 Non-current liabilities Bonds payable 10,000 10,000 Long-term borrowings 124,766 115,279 Deferred tax liabilities 5,341 5,949 Deferred tax liabilities for land revaluation 8,524 8,524 Retirement benefit liability 1,895 1,894 Provision for share awards 141 128 Other 6,414 9,263 Total non-current liabilities 157,083 151,039 Total liabilities 342,180 361,929 Net assets Shareholders’ equity Share capital 36,998 36,998 Capital surplus 49,415 49,260 Retained earnings 174,127 172,685 Treasury shares (7,716) (7,714) Total shareholders’ equity 252,825 251,229 Accumulated other comprehensive income Valuation difference on available-for-sale securities 14,258 12,919 Deferred gains or losses on hedges 760 836 Revaluation reserve for land 10,176 10,176 Foreign currency translation adjustment 26,934 29,014 Remeasurements of defined benefit plans 5,752 5,601 Total accumulated other comprehensive income 57,883 58,548 Non-controlling interests 28,117 27,085 Total net assets 338,826 336,864 Total liabilities and net assets 681,006 698,793
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7 (2) Quarterly Consolidated Statements of Income and Comprehensive Income Quarterly Consolidated Statement of Income Three Months Ended June 30 (Millions of yen) For the three months ended June 30, 2025 For the three months ended June 30, 2026 Net sales 94,067 96,977 Cost of sales 73,912 68,002 Gross profit 20,155 28,975 Selling, general and administrative expenses 17,853 17,981 Operating profit 2,302 10,993 Non-operating income Interest income 262 36 Dividend income 329 453 Share of profit of entities accounted for using equity method 858 413 Other 357 223 Total non-operating income 1,808 1,126 Non-operating expenses Interest expenses 614 614 Foreign exchange losses 167 46 Loss on disposal of non-current assets 492 53 Cost during the suspension of plant operation 567 1,125 Other 597 804 Total non-operating expenses 2,439 2,645 Ordinary profit 1,671 9,475 Extraordinary income Gain on sale of non-current assets 8,188 – Total extraordinary income 8,188 – Extraordinary losses Loss on liquidation of business 2,201 4,844 Total extraordinary losses 2,201 4,844 Profit before income taxes 7,658 4,630 Income taxes – current 2,943 2,693 Profit 4,714 1,937 Profit (loss) attributable to non-controlling interests (287) (905) Profit attributable to owners of parent 5,001 2,843
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8 Quarterly Consolidated Statement of Comprehensive Income Three Months Ended June 30 (Millions of yen) For the three months ended June 30, 2025 For the three months ended June 30, 2026 Profit 4,714 1,937 Other comprehensive income Valuation difference on available-for-sale securities 1,269 (1,982) Deferred gains or losses on hedges 245 (32) Foreign currency translation adjustment (5,292) 2,393 Remeasurements of defined benefit plans, net of tax 1 (103) Share of other comprehensive income of entities accounted for using equity method (133) 774 Total other comprehensive income (3,909) 1,049 Comprehensive income 804 2,986 Comprehensive income attributable to Comprehensive income attributable to owners of parent 1,571 3,508 Comprehensive income attributable to non-controlling interests (766) (521)
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9 (3) Notes to Quarterly Consolidated Financial Statements Notes on going concern assumption Not applicable. Notes in case of significant changes in shareholders’ equity Not applicable.
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10 Segment information, etc. [Segment information] I. Three months ended June 30, 2025 (from April 1, 2025 to June 30, 2025) 1. Information on net sales and income or loss by reportable segment ( M i l l i o n s o f y e n ) Reportable segment Other businesses (Note 1) Total Adjustments (Note 2) Amount in quarterly consolidated statement of income (Note 3) Electronics & Innovative Products Life Innovation Elastomers & Infrastructure Solutions Polymer Solutions Total Net sales Sales to external customers 23,611 6,585 25,803 33,795 89,796 4,271 94,067 – 94,067 Intersegment sales or transfers – – 4 26 31 1,240 1,271 (1,271) – Total 23,611 6,585 25,808 33,821 89,827 5,511 95,338 (1,271) 94,067 Segment profit (loss) 2,467 221 (1,395) 400 1,693 590 2,284 17 2,302 Notes: 1. The other businesses category refers to business segments not included in the reportable segments, including plant engineering business and trading company business, etc. 2. Adjustments to segment profit (loss) of ¥17 million we re due to elimination of intersegment transactions. 3. Segment profit (loss) is adjusted with operating pr ofit in the quarterly consolidated statement of income. 2. Information on net sales by region (Millions of yen) Japan Overseas Total Asia Others Total Net sales 52,674 26,129 15,263 41,393 94,067 Percentage of consolidated net sales (%) 56.0 27.8 16.2 44.0 100.0 Note: Net sales are classified by country or region based on the location of customers.
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11 II. Three months ended June 30, 2026 (from April 1, 2026 to June 30, 2026) 1. Information on net sales and income or loss by reportable segment (Millions of yen) Reportable segment Other businesses (Note 1) Total Adjustments (Note 2) Amount in quarterly consolidated statement of income (Note 3) Electronics & Innovative Products Life Innovation Elastomers & Infrastructure Solutions Polymer Solutions Total Net sales Sales to external customers 26,377 6,994 23,669 36,083 93,124 3,852 96,977 – 96,977 Intersegment sales or transfers – – 5 26 31 1,547 1,578 (1,578) – Total 26,377 6,994 23,674 36,109 93,156 5,399 98,556 (1,578) 96,977 Segment profit (loss) 3,680 210 2,741 3,621 10,255 743 10,999 (5) 10,993 Notes: 1. The other businesses category refers to business segments not included in the reportable segments, including plant engineering business and trading company business, etc. 2. Adjustments to segment profit (loss) of ¥5 million are due to elimination of intersegment transactions. 3. Segment profit (loss) is adjusted with operating pr ofit in the quarterly consolidated statement of income. 2. Information on net sales by region (Millions of yen) Japan Overseas Total Asia Others Total Net sales 56,264 24,079 16,633 40,713 96,977 Percentage of consolidated net sales (%) 58.0 24.8 17.2 42.0 100.0 Note: Net sales are classified by country or region based on the location of customers. Notes on statement of cash flows We have not prepared quarterly consolidated statement of cash flows for the three months ended June 30, 2026. Depreciation (including amortization of intangible assets except goodwill) and amortization of goodwill for the three months ended June 30, 2026 are as follows: (Millions of yen) For the three months ended June 30, 2025 For the three months ended June 30, 2026 Depreciation 7,177 7,755 Amortization of goodwill 9 28