3103.T

Overall Interim Financial Performance

• Consolidated cumulative interim net sales increased 0.6 billion yen year-over-year to 62.1 billion yen, and operating profit increased 3.4 billion yen year-over-year to 5.6 billion yen, driven by profitability reform initiatives.
• Ordinary profit increased 3.7 billion yen year-over-year to 4.8 billion yen, despite higher interest payments. A 7.6 billion yen special loss for projected business structure improvement costs led to a net loss of 3.5 billion yen attributable to parent company shareholders.
• Cash and cash equivalents increased 25.9 billion yen year-over-year to 39.1 billion yen, after a third-party capital increase for Class C shares boosted assets and net equity.

Business Restructuring Plan Progress

• Business Exit Progress: Final business transfer agreements have been signed for 14 business entities, progressing broadly in line with plan. Priority is placed on protecting employee employment and inheriting existing technical expertise during negotiations, and work continues until all transfers are complete.

Core Operational Initiatives

• Establish Low-Cost Operating Structure:
  • Decommissioning of the large No. 4 nylon film machine at Emblem Asia was completed in the prior fiscal year; terms for sale of the machine and associated land are being finalized with multiple parties.
  • Switching to external procurement of polyester chips (after the Okazaki facility polyester chip business is transferred and exited), with the transition progressing smoothly as qualified alternatives are sampled and evaluated by customers.
  • Logistics cost revisions (route, rule, and contract renegotiations) are expected to deliver annual cost savings of several hundred million yen, with further efficiency reviews ongoing.
  • Headquarters office space has been consolidated from multiple floors to a single floor to cut overhead; further streamlining of headquarters functions will progress alongside business transfer activities.
• Expand Sales of High Value-Added Products:
  • Focus growth resources on high-margin products in core polymer (film/resin) and glass fiber businesses; high performance gas barrier material Emblem HG sees solid overseas sales, and expansion into new applications and capacity upgrades are under review.
  • Management is evaluating long-term strategies for all businesses including activated carbon fiber and glass beads, and will allocate resources to high-growth market segments to expand new application development.
  • R&D and production capacity expansion is prioritized for growth areas including next-generation energy and electrical/electronic materials to build long-term profitability and sustainable growth.
• Strengthen Organizational Governance:
  • A new management structure was launched this fiscal year, with improved approval authority management to strengthen corporate governance.
  • The Structural Reform Promotion Office leads a full group-wide structural reform (beyond just exiting unprofitable businesses) to define a new business portfolio focused on future growth, to build a "New Unitika".

• The full-year 2026 March fiscal year consolidated forecast was previously indeterminate due to uncertainty around business transfer timelines and scope; it is now published based on current available information:
  • Forecast full-year net sales: 110.0 billion yen, operating profit: 7.5 billion yen, ordinary profit: 6.0 billion yen.
  • Net sales will decline due to exit of unprofitable businesses, but ongoing core businesses are performing solidly and are expected to exceed the original restructuring plan targets.
  • Management forecasts that operating profit and ordinary profit will decline in the second half compared to the first half, due to seasonal factors for ongoing businesses, sales declines from exited businesses, and remaining shared overhead costs after exit; earnings from Q3 onward are expected to be less favorable than in H1.
  • Net income attributable to parent company shareholders remains indeterminate, as it cannot be reasonably calculated at this time.

1. Polymer Business Segment: Sales of 28.4 billion yen (slight year-over-year increase), contributed 45.7% of total interim revenue, with operating profit of 5.0 billion yen (a 2.3 billion yen year-over-year increase).
2. Functional Materials Business Segment: Sales of 19.0 billion yen (a 4% year-over-year increase), contributed 30.6% of total interim revenue, with operating profit of 0.9 billion yen (a 0.7 billion yen year-over-year increase).
3. Textile Business Segment: Sales of 14.7 billion yen, contributed 23.7% of total interim revenue, with an operating loss of 0.2 billion yen (a 0.4 billion yen year-over-year improvement in profitability, reduced operating loss from the prior year).
4. Other Business: Sales of 56 million yen, with an operating loss of 8 million yen.

• Price competition from low-cost Chinese products in overseas markets pressured sales volumes, requiring exit from unprofitable product lines to protect margins.
• Weak demand in general apparel, bedding, and sportswear, and reduced road construction projects and competition for glass beads, create ongoing downward pressure on sales in these segments.
• Uncertainty around finalization of remaining business transfer agreements creates uncertainty for full-year net profit calculation.
• Earnings in the second half are expected to be under pressure from seasonal factors, residual overhead after business exits, and lost sales from exited businesses.

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