On February 7, Kansai Paint Co., Ltd. (hereinafter "Kansai Paint") announced its financial performance for the third quarter of the 2025 fiscal year. The group achieved a sales revenue of ￥444.752 billion (approximately USD 2.942 billion or RMB 20.590 billion) in the first three quarters, a year-on-year increase of 5.3%. The growth in sales was driven by the Japanese shipbuilding sector, Indian automotive industry, and European industrial sectors. Despite a decrease in raw material prices and efforts to reduce costs, operating profit fell by 5.2% year-on-year to ￥39.247 billion due to increased fixed costs in Europe. Although there was foreign exchange gain, the operating profit decreased by 5.4% year-on-year to ￥41.795 billion due to reduced equity-method investment income. Net profit stood at ￥32.917 billion, down 39.0% from the previous year, partly due to the disappearance of a one-time special profit recorded last year.
Kansai Paint noted that the global economic outlook remains uncertain due to factors such as exchange rate fluctuations resulting from changes in interest rates in the U.S. and Japan, and rising geopolitical risks. Under these conditions, Japan's economy is slowly recovering overall, but the economic outlook remains uncertain due to factors such as interest rate increases, the Ukraine crisis, the Middle East situation, and exchange rate fluctuations. In India, despite price increases and high interest rates, growth is slowing, but strong growth is expected to continue, driven by domestic demand. In Europe, with the gradual easing of inflationary pressures and interest rate cuts, there are signs of recovery in the economy, although some regions are still experiencing stagnation. In China, while there are signs of economic recovery, concerns over stagnation in the real estate market are raising fears of an economic downturn.
In the automotive sector, production levels were lower than last year due to some automakers halting production and shipments. However, sales revenue only slightly decreased compared to last year due to efforts to improve sales prices. In the industrial, construction, automotive (maintenance), and anti-corrosion sectors, sales could not expand due to factors such as a sluggish market, and total sales were lower than last year. In the shipbuilding sector, the foreign ship market performed well, and sales were higher than the previous year. Profits exceeded those of the previous year, driven by efforts to improve sales prices, a partial decrease in raw material prices, and contributions from increased revenue in the shipbuilding sector. As a result, the division's sales amounted to ￥124.358 billion, an increase of 1.1% from the previous year, and the division's profit was ￥17.378 billion, up 5.9% year-on-year.
In the construction sector, despite promotional activities, sales were lower than last year due to worsening market conditions and a shift to lower-priced products. On the other hand, India's automotive production remained stable, and sales in the automotive sector significantly exceeded those of the previous year. Overall sales in India were higher than last year, partly due to the impact of yen depreciation on exchange rate conversion. In terms of profits, while efforts were made to improve sales prices, they were lower than last year due to an increase in fixed costs such as labor costs. As a result, the division's sales amounted to ￥109.887 billion, an increase of 4.4% year-on-year, and the division's profit was ￥11.68 billion, down 6.9% year-on-year.
In Turkey, despite a decrease in automotive production, sales remained flat compared to last year due to efforts to improve sales prices. In other European countries, sales exceeded last year due to strong demand centered around the industrial sector and new connections. On the other hand, although raw material prices remained stable, profits were lower than last year due to the impact of inflation leading to increased fixed costs and a significant expansion of equity-method investment losses. As a result, the division's sales amounted to ￥118.29 billion, an increase of 15.0% year-on-year, and the division's profit was ￥97 million, down 97.5% year-on-year.
In China, automotive production was higher than last year, but sales were lower than the previous year due to stagnant demand from major clients. In Thailand and Indonesia, sales were lower than last year due to reduced automotive production. In Malaysia, due to steady growth in automotive production, sales increased, and efforts to improve sales prices also contributed to higher sales compared to last year. However, profits were lower than last year, affected by the decline in automotive sales. As a result, the division's sales amounted to ￥50.88 billion, a decrease of 4.7% from the previous year, and the division's profit was ￥7.583 billion, down 13.8% year-on-year.
In South Africa and neighboring countries, the economy remains sluggish due to prolonged power shortages and inflationary pressures, but sales activities have been promoted, and sales exceeded last year. In East Africa, although there were impacts from protests and unusual weather, sales efforts in the construction sector led to sales exceeding the previous year. Although measures such as cost-cutting were implemented, profits were slightly lower than last year. As a result, the division's sales amounted to ￥33.568 billion, an increase of 8.1% year-on-year, and the division's profit was ￥2.812 billion, down 1.7% year-on-year.
In North America, automotive production exceeded last year, and sales significantly exceeded those of the previous year. In terms of profits, due to the increase in revenue, operating profit improved, and equity-method investment income also increased, leading to significant growth compared to the previous year. As a result, the division's sales amounted to ￥7.847 billion, an increase of 15.7% from the previous year, and the division's profit was ￥2.89 billion, an increase of 29.7% year-on-year.
Kansai Paint has revised its previous performance guidance. For the full 2025 fiscal year, the group expects sales to reach ￥580.0 billion, a 3.2% increase year-on-year. Operating profit is expected to be ￥52.0 billion, a 0.8% increase; operating profit is expected to be ￥58.0 billion, a 0.5% increase; and net profit is expected to be ￥40.0 billion, a 40.4% decrease year-on-year. The company stated that due to changes in the market environment in India, Europe, and Asia, as well as weak demand, sales are expected to be lower than previously expected. Regarding profits, efforts are being made to reduce total costs, including cost reduction activities, but due to the decline in sales and the increase in fixed costs, as well as the impact of hyperinflationary accounting in Turkey, both operating profit and operating income are expected to be lower than the previous forecast.
