Message from the President
Dear Shareholders and Investors
In the business environment for the first half of fiscal 2025, deceleration in demand in major markets became apparent from the second quarter due to U.S. tariff policies, further increasing uncertainty going forward. In Japan, stagnant demand overseas cast a shadow on prospects for economic recovery. In the United States, although the economy has remained stable thanks to domestic demand, projections are increasingly indicating that growth will slow due to the tariff policies. In Europe, the overall economy remained on a gradual expansion track, however, the outlook has become less clear. Meanwhile, despite being underpinned by personal consumption driven by government-led economic stimulus measures, the Chinese economy saw growth remain low, especially in the real estate market.
Amid these circumstances, our consolidated operating results for the first half of fiscal 2025 were as follows: net sales decreased ¥11.3 billion year on year to ¥400.0 billion; operating income decreased ¥19.2 billion to ¥26.3 billion; and net income attributable to owners of the parent decreased ¥16.4 billion to ¥14.0 billion. The decrease in net sales, higher raw material and fuel prices, and negative effect from inventory valuation differences resulted in the decreases in profit.
Based on the first half business results, current business trends, and increasingly uncertain economic environment, we revised the full-year forecast for fiscal 2025, which was announced on February 12, 2025. The forecasts are for net sales of ¥840.0 billion, operating income of ¥75.0 billion, and net income attributable to owners of parent of ¥33.0 billion.
The Kuraray Group is working on sophisticating its business portfolio under its Medium-Term Management Plan “PASSION 2026.” As progress in the first half of fiscal 2025, we have decided to expand production capacity for optical-use poval film. In addition, construction of the new plant in Singapore for EVAL™ EVOH resin is proceeding smoothly toward the start of operation by the end of 2026, and we are considering expansion of existing plants and construction of new plants in the United States for our activated carbon business. In addition, we have laid the groundwork for future growth by acquiring the American company Nelumbo Inc., which has unique surface modification technology. On the other hand, we have decided to terminate the production of KURARITY™ an acrylic block copolymer product, and polyester-related products. We will continue to allocate management resources in a disciplined manner, with the aim of transitioning to a more sustainable business structure and achieving growth.
We position the distribution of profits to all shareholders as a priority management issue. Our shareholder return policy is to ensure a total return ratio of at least 50% as a proportion of net income attributable to owners of the parent, hold steady or increase dividends per share, and aim for continually conduct share buybacks. Based on this policy, for fiscal 2025, we have decided to pay the interim dividend of ¥27 per share, as planned at the beginning of the year. The year-end dividend forecast is also ¥27 per share, and therefore the annual dividend per share is expected to be ¥54. In addition, we are conducting share buyback up to ¥30 billion or 22 million shares, and the total return ratio for fiscal 2025 is expected to be approximately 142%.
On behalf of Kuraray, I would like to extend our gratitude for your continued understanding and generous support.
Hitoshi Kawahara, President and Representative Director