Zeon raises earnings outlook on stronger elastomer performance

Tokyo – Zeon Corp. has raised its full-year earnings forecast, citing stronger-than-expected performance in its Elastomers business, alongside higher demand for speciality materials.

In a 29 Oct announcement, the Japanese group revised its consolidated operating profit forecast for the year ending 31 March 2027 upwards by 19.7% to Yen45.5 billion (€262 million).

Full-year sales are now expected to reach Yen430 billion, up 6.2% from the previous forecast, Zeon added.

Within the Elastomers business, Zeon raised its annual sales forecast to Yen231.5 billion, from Yen219.5 billion previously.

Operating income for the division is now expected to reach Yen11.5 billion, compared with the earlier forecast of Yen8.5 billion.

The upward revision follows a 66% year-on-year increase in first-half Elastomers operating income to Yen10.8 billion, on 7% higher sales of Yen120.4 billion.

Zeon said sales growth reflected selling price revisions in response to higher raw-material prices and yen depreciation.

The higher selling prices, it added, offset shipment adjustments linked to feedstock availability and scheduled maintenance.

Operating income benefited from these factors and the "impact of inventories at FY2025 year-end," according to the company.

For the second quarter ended 30 Sept, Elastomers operating income more than doubled to Yen5.2 billion, from Yen2.3 billion a year earlier.

Quarterly sales increased 14% year-on-year to Yen62.3 billion.

Within the division, synthetic rubber sales rose 13% to Yen47.9 billion, while operating income increased 73% to Yen5.5 billion.

Zeon attributed the improvement to "selling price revisions reflecting higher raw material prices," with demand remaining firm, particularly for speciality rubbers.

Demand for speciality rubbers was supported mainly by domestic automotive applications, the company said.

In general-purpose rubbers, however, cumulative shipments declined as Zeon curtailed "one-off sales" to address raw-material procurement risks.

Looking ahead, Zeon expects raw-material prices and utility costs to remain elevated in the second half, amid continued uncertainty in the Middle East.

The company also warned of the impact of inventories reflecting higher first-half costs.

To address these pressures, Zeon plans to pass through higher costs, including fixed costs not covered by pricing formulas, through surcharge mechanisms.