Denka Elastomers Profit Rises as DPE Suspension Lifts Earnings

Denka Co.’s elastomers and infrastructure solutions unit has reported higher operating income in the first quarter of fiscal 2026, which started on 1 April. The gains were supported by the suspension of chloroprene rubber production at the group’s US subsidiary Denka Performance Elastomer (DPE). According to Denka, the elastomers business reported operating income of Yen2.7 billion (€14.7 million) in the three months ended 30 June, compared with a loss of Yen1.4 billion a year earlier. The improvement was attributed to the impact of the DPE production suspension, which contributed Yen3 billion to operating income. Volumes and pricing also contributed Yen1 billion and Yen1.5 billion respectively, while costs and other factors had a negative Yen1.3 billion impact. Demand for chloroprene rubber was level year-on-year, while shipments from Denka’s Omi plant in Japan increased due to substitution for DPE products. Pricing was also favourable, with a positive foreign-exchange impact and an improvement in export unit prices. However, rising raw material and fuel prices continued to weigh on costs. For the first half, Denka revised up its forecast for the segment’s operating income by Yen1 billion to Yen5.0 billion, while maintaining its full-year outlook. DPE has nearly completed the removal of raw materials and intermediates from its manufacturing facilities and is currently cleaning the equipment and carrying out post-treatment work. The subsidiary is also continuing to optimise its workforce, with employee numbers falling from 140 at the end of December 2025 to 80 at the end of July.