ENVALITH
三菱マテリアル株式会社 logo

MITSUBISHI MATERIALS CORPORATION

5711・Prime Market・Nonferrous Metals

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三菱マテリアル株式会社 logo
MITSUBISHI MATERIALS CORPORATION5711

Business

Mitsubishi Materials is an integrated materials manufacturer whose core business is Metals, encompassing the smelting and sale of copper, gold, silver, lead, tin, palladium and other metals. In addition, the company operates High-Performance Products (Copper Processed Products (Copper & Copper Alloy Products, etc.) and Electronic Materials & Functional Materials), Processing (Cemented Carbide Tools (Cutting Tools) and Tungsten Products), Renewable Energy, and Other Businesses such as Cement and Engineering. The group, comprising 113 subsidiaries and 24 affiliated companies, maintains a value chain spanning from Home Appliance Recycling to copper processed products both domestically and internationally, and in December 2024 acquired Germany's H.C. Starck Holding to secure one of the world's largest processing capacities in the tungsten recycling field. Major customers span a wide range of industries, including automotive, semiconductors, electronic components, and construction.

Business Model

The company operates a vertically integrated business spanning smelting of primary raw materials (copper concentrate, etc.), recycling processing of secondary raw materials (E-Scrap, etc.), and the manufacturing and sale of high-value-added products such as Copper Processed Products (Copper & Copper Alloy Products, etc.) and Cemented Carbide Tools (Cutting Tools). In addition to the smelting business, whose earnings are directly affected by metal prices, foreign exchange rates, and ore purchase terms (TC/RC), the company has a multi-layered earnings structure supported by dividends and investment gains from equity-method mining companies as well as equity-method income from UBE Mitsubishi Cement, all of which underpin recurring profit.

Company Strengths

The company operates an integrated value chain spanning from Home Appliance Recycling to Copper Processed Products (Copper & Copper Alloy Products, etc.) both domestically and internationally, and through the December 2024 acquisition of Germany's H.C. Starck Holding GmbH, it also gained one of the world's largest scrap processing capacities in tungsten recycling. The expansion of E-Scrap processing and the strengthening of the resource recycling network function as the company's own unique competitive advantage.

The company has accumulated smelting, recycling, and materials technologies since it began mine operations in 1873 and established its Mining Research Institute (now the Innovation Center) in 1917. R&D expenses for FY2026 (ending March 2026) amounted to ¥8,541 million, with continued investment in strengthening core technologies and creating new technologies across the Metals, High-Performance Products, and Processing segments.

The company disperses dependence on any specific business or region through a multi-segment structure comprising Metals (net sales of ¥940,464 million), High-Performance Products (¥567,972 million), Processing (¥230,591 million), and Other Businesses including Renewable Energy. Its global operations through Luvata (European copper processing) and cemented carbide tool sales subsidiaries in the United States and Europe also constitute the company's own unique strength.

ENVALITH's Perspective

Operating profit for FY2026 (ending March 2025) achieved a major improvement, reaching ¥60,502 million (up 63.0% year on year); however, an impairment loss of ¥30,335 million associated with fundamental structural reforms (the largest component being ¥20,361 million tied to the decision to halt operations at the Onahama Smelting & Refining Co. plant) was recorded as an extraordinary loss, limiting profit attributable to owners of parent to ¥40,581 million (up 19.1% year on year). It should be noted that while structural reform costs continue to be recorded, improvements in operating profit are less likely to translate directly into net profit.

The consolidated earnings forecast for FY2027 (ending March 2026) calls for net sales of ¥1,990,000 million (up 7.9% year on year) and operating profit of ¥36,000 million (down 40.5% year on year), indicating a significant decline in profit. This is likely mainly attributable to operating costs and transition expenses associated with the planned suspension of operations at the Onahama Smelting & Refining Co. plant (targeted for around the end of March 2027). On the other hand, ordinary profit is forecast to increase to ¥73,000 million (up 25.2% year on year) and net profit to ¥49,000 million (up 20.7% year on year), premised on continued contributions from equity-method income and dividend income. Whether the improvement in earnings structure following the structural reforms can be realized will be key to the medium-term assessment.

At the end of FY2026 (ending March 2025), total assets expanded sharply to ¥2,999,744 million (up 26.1% year on year), while the equity ratio declined to 24.5% (from 28.5% in the previous fiscal year). Gold bullion loans receivable increased significantly from ¥463,727 million to ¥813,829 million, and the corresponding gold bullion deposits received also swelled from ¥773,036 million to ¥1,239,178 million. The interest coverage ratio also declined from 6.7x to 4.2x, and continuous monitoring is needed regarding the expansion of the balance sheet and the rise in financial leverage accompanying the growing scale of gold bullion transactions.

Growth Strategy

Under the medium-term management strategy for FY2026-2028 (ending March 2028), the company is accelerating global expansion across the four domains of Materials, Products, Resources, and Renewable Energy

As part of the shift in management focus from quantity to quality, the company decided to withdraw from the copper concentrate processing business, which has continued to face deteriorating TC/RC terms. Operations at the copper concentrate processing and related smelting facilities at the Onahama Smelting & Refining Plant are scheduled to be suspended by the end of March 2027, aiming for a fundamental reduction in fixed costs and improvement in the profit structure. In FY2026 (ending March 2026), the company already recorded an impairment loss of ¥20,361 million and other business structural reform expenses of ¥3,989 million.

Based on the medium-term management strategy (FY2026-2028), the company is transitioning from the former four-category structure of Metals, High-Performance Products, Processing, and Renewable Energy to a new five-category structure consisting of the Materials domain, Products domain (Cemented Carbide Tools (Cutting Tools) and High-Performance Products), Resources, and Renewable Energy. The company aims to improve profitability through expansion of the resource circulation loop and tungsten recycling, and by providing high-value-added products and solutions.

The company is advancing the integration of H.C. Starck Holding GmbH, which became a consolidated subsidiary in December 2024. In FY2026 (ending March 2026), the provisional accounting treatment was finalized (goodwill of ¥18,073 million), and external sales of the Processing segment expanded to ¥230,591 million (up 59.9% year on year), with ordinary income growing to ¥14,980 million (up 75.5% year on year). The company aims for further profitability improvement through price increase effects, growth in Tungsten Products sales, and strengthening of its global sales network.

During the medium-term management strategy period of FY2026-2028, the dividend policy has been changed from the previous target payout ratio of 30% to a target dividend on equity (DOE) ratio of 2.5%. The annual dividend forecast for FY2027 (ending March 2027) is ¥116 (interim ¥58, year-end ¥58), representing a 16% increase from ¥100 in FY2026 (ending March 2026). The payout ratio is expected to be 30.9%.

In April 2026, a portion of the lump-sum retirement benefit plan was transitioned to a defined contribution pension plan. In the following consolidated fiscal year (FY2027, ending March 2027), the company expects to record an extraordinary gain of ¥11,033 million, which will serve as a factor boosting net income. Improvement in the financial structure through the reduction of retirement benefit obligations is also expected.

Last updated: July 19, 2026