| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1574.5B | ¥1759.4B | -10.5% |
| Operating Income / Operating Profit | ¥2.6B | ¥45.7B | -94.2% |
| Ordinary Income | ¥17.2B | ¥45.5B | -62.2% |
| Net Income / Net Profit (attributable to owners of parent) | ¥-3.1B | ¥93.6B | -103.4% |
| ROE | -0.3% | 11.0% | - |
For the fiscal year ended March 2026, Revenue was ¥1574.5B (YoY ▲¥184.9B ▲10.5%), Operating Income was ¥2.6B (YoY ▲¥43.1B ▲94.2%), Ordinary Income was ¥17.2B (YoY ▲¥28.3B ▲62.2%), and Net Income attributable to owners of parent was a loss of ¥-3.1B (YoY ▲¥96.7B ▲103.4%), reflecting revenue and profit declines and a rapid deterioration in operating earning power. The operating margin contracted from 2.6% in the prior year to 0.2% (▲2.4pt), bringing the company close to an operating deficit. Ordinary Income remained positive due to non-operating income of ¥25.5B—including equity-method investment income ¥6.6B, foreign exchange gains ¥9.1B, and dividend income ¥5.8B—but Net Income attributable to owners of parent turned to a loss of ¥-3.1B despite recording special gains of ¥41.3B, primarily investment securities disposal gains of ¥41.2B. By segment, the Functional Products Business maintained profitability with Revenue ¥784.5B (▲11.0%) and Operating Income ¥23.7B (▲29.0%, margin 3.0%), while the Paper Materials Business fell into a structural loss with Revenue ¥800.3B (▲10.3%) and Operating Loss ¥-21.1B (turning from a prior-year profit of ¥13.5B, margin ▲2.6%), pressuring consolidated earnings. The earnings structure’s dependence on non-operating and special items has become evident, making a recovery in core operating profitability an urgent issue.
[Revenue] Revenue totaled ¥1574.5B (YoY ▲10.5%), a double-digit decline. By segment, Functional Products Business recorded ¥784.5B (▲11.0%) and Paper Materials Business ¥800.3B (▲10.3%), with both segments experiencing around a 10% decline. The decrease is presumed to be due to a combination of demand weakness and price corrections. The Engineering Business, though small, increased sales to ¥9.2B (+39.3%). Regional revenue breakdowns were not disclosed in detail, but company-wide demand weakness and delayed pass-through of price increases pressured the top line. Gross profit was ¥202.4B (gross margin 12.9%, down ▲1.4pt from 14.3% a year earlier), indicating a notable deterioration in cost of goods sold ratio.
[Profitability] Against gross profit of ¥202.4B, SG&A amounted to ¥199.8B (SG&A ratio 12.7%, up +1.0pt from 11.7% in the prior year), nearly offsetting gross profit and leaving Operating Income at ¥2.6B (operating margin 0.2%). SG&A decreased only ▲3.0% YoY and failed to absorb the ▲10.5% sales decline, producing negative operating leverage. By segment, Functional Products maintained Operating Income of ¥23.7B (margin 3.0%) but saw profits decline ▲29.0% YoY, while Paper Materials swung to an Operating Loss of ¥-21.1B (from ¥+13.5B prior year), driven by persistent energy and logistics costs and weak demand, resulting in a ¥34.6B YoY profit decline. Ordinary Income of ¥17.2B was supported by non-operating income of ¥25.5B (equity-method investment income ¥6.6B, FX gains ¥9.1B, dividend income ¥5.8B, etc.), offsetting weak operating performance. Special items comprised special gains of ¥41.3B—mainly investment securities disposal gains of ¥41.2B—less special losses of ¥30.2B, including impairment losses ¥2.7B and disaster losses ¥7.5B, yielding a net special items gain of ¥+11.0B. From profit before tax ¥28.2B, income taxes ¥9.2B and non-controlling interests ¥0.1B were deducted, resulting in Net Income attributable to owners of parent of ¥-3.1B. Comprehensive income was ¥186.3B (prior year ▲¥52.4B), a large positive primarily due to other comprehensive income (OCI) of ¥167.2B including retirement benefit-related adjustments of ¥163.2B, meaning valuation gains far exceeded the period’s net loss. In conclusion, revenue and profit declined with a substantial deterioration in operating earning power; the results depended on temporary non-operating/special items and valuation-based OCI.
The Functional Products Business recorded Revenue ¥784.5B (YoY ▲11.0%) and Operating Income ¥23.7B (YoY ▲29.0%, margin 3.0%). Despite reduced revenue and profit, it remained profitable and was the main contributor to consolidated operating income. The Paper Materials Business posted Revenue ¥800.3B (▲10.3%) and an Operating Loss of ¥-21.1B (turning from ¥+13.5B previously, margin ▲2.6%), falling into a structural deficit. A combination of demand decline, intensified price competition, and persistently high energy/logistics costs impaired fixed-cost absorption, resulting in a YoY profit decrease of ▲¥34.6B. The Engineering Business recorded Revenue ¥9.2B (+39.3%) and Operating Income ¥1.7B (up from ¥0.7B), small but showing revenue and profit growth. Consolidated Operating Income ¥2.6B effectively reflects Functional Products’ profit ¥23.7B offset by Paper Materials’ loss ¥-21.1B; improving profitability in Paper Materials is key to a consolidated recovery.
[Profitability] Operating margin 0.2% (down ▲2.4pt from 2.6% prior year), Net margin ▲0.2% (prior year 5.3%), ROE ▲0.3% (prior year 4.9%)—profitability metrics worsened across the board. The decline in gross margin to 12.9% (from 14.3%) and the rise in SG&A ratio to 12.7% (from 11.7%) significantly compressed operating profitability. Comprehensive-income-based ROE is 18.0%, but this depends on OCI valuation gains such as retirement benefit remeasurement gain of ¥163.2B and does not reflect core operating profitability. [Cash Quality] Operating Cash Flow was ¥52.2B, substantially exceeding Net Income attributable to owners of parent of ¥-3.1B, supported by Depreciation ¥55.2B and working capital improvement (decrease in trade receivables ¥77.3B). The OCF/EBITDA ratio is 0.90x (EBITDA ¥57.9B), at threshold levels, indicating limited cash conversion. Inventory turnover days 114, trade receivables days 61, and CCC 128 days show working capital stagnation constraining cash generation. [Investment Efficiency] ROIC 0.1% (prior 1.9%), CapEx ¥36.9B is 67% of depreciation ¥55.2B, indicating restrained renewal investment and weak momentum for medium-term productivity improvements. Proceeds from disposal of investment securities ¥54.3B were a main driver of FCF ¥68.2B; on a normal basis, investment cash flow is around ▲¥36.9B. [Financial Soundness] Equity Ratio 46.3% (improved +5.4pt from 40.9%) was mainly due to an increase in net assets from retirement benefit remeasurement gains (¥1031.8B, prior ¥852.8B), i.e., valuation-driven improvement. Interest-bearing debt ¥615.7B yields Debt/EBITDA 10.6x and interest coverage (EBIT / interest expense) 0.36x, indicating weak debt-servicing capacity. Current ratio 99.6% and quick ratio 74.5% show short-term liquidity below 100%; cash ¥49.0B versus short-term borrowings ¥420.1B + CP ¥30.0B gives cash/short-term-liabilities ratio 0.12x, extremely tight. Short-term debt ratio 68% is high, leaving refinancing risk.
Operating Cash Flow was ¥52.2B (YoY +7.6%), a slight increase and substantially exceeding Net Income attributable to owners of parent of ¥-3.1B, indicating cash generation. Breakdown: pre-tax profit before tax adjustments ¥28.2B plus non-cash expenses including Depreciation ¥55.2B and impairment losses ¥2.7B, with working capital changes contributing via decrease in trade receivables +¥77.3B while decreases in accounts payable ▲¥42.0B, increase in retirement benefit assets ▲¥30.9B (net), and tax payments ▲¥17.4B were deducted, resulting in an operating CF subtotal of ¥70.2B and adjusted OCF of ¥52.2B. Investing CF was +¥16.0B—unusually positive—because proceeds from disposal of investment securities ¥54.3B exceeded CapEx ¥36.9B, representing a one-off cash inflow. FCF was ¥68.2B but was driven by investment securities disposals; on a normal basis, FCF is estimated at ~¥15B (Operating CF ¥52.2B − CapEx ¥36.9B). Financing CF was ▲¥83.0B, driven by long-term debt repayments ▲¥87.4B, net decrease in commercial paper ▲¥70.0B, and dividend payments ▲¥6.7B, partly offset by long-term borrowings +¥83.0B and net increase in short-term borrowings +¥1.3B. Ending cash was ¥48.9B (from beginning cash ¥62.4B, ▲¥13.4B), meaning cash declined despite investment securities disposals. CCC remained long at 128 days, indicating scope to compress inventory and receivables. Sustainability of operating CF depends on recovery in core earnings and working capital efficiency; establishing autonomous cash generation not reliant on one-off investment securities disposals is a key challenge.
Operating Income ¥2.6B (operating margin 0.2%) was supported by non-operating income ¥25.5B (equity-method investment income ¥6.6B, FX gains ¥9.1B, dividend income ¥5.8B, etc.), resulting in Ordinary Income ¥17.2B and indicating extremely fragile core earnings. Special items comprised special gains from investment securities disposals ¥41.2B less special losses ¥30.2B (impairment ¥2.7B, disaster losses ¥7.5B, etc.), netting ¥+11.0B—these are temporary and low in sustainability. FX gains ¥9.1B are about 3.5x Operating Income ¥2.6B, showing material profit sensitivity to currency movements, whereas equity-method investment income ¥6.6B and dividend income ¥5.8B are relatively stable revenue sources. Most of the comprehensive income ¥186.3B stems from retirement benefit-related adjustment ¥163.2B (OCI), reflecting valuation gains from improved pension asset performance and discount-rate movements. The gap of ¥189.4B between Net Income ¥-3.1B and Comprehensive Income ¥186.3B is almost entirely valuation gains that do not involve cash flows. Operating CF ¥52.2B results from subtotal ¥70.2B (including depreciation ¥55.2B) adjusted for working capital changes; while decrease in trade receivables +¥77.3B contributed, decrease in accounts payable ▲¥42.0B offset part of that, so working capital efficiency delivered limited cash. Accrual (Net Income − Operating CF) is ¥-3.1B − ¥52.2B = ¥-55.3B, a large negative indicating cash generation exceeding accounting profit, but this depends on one-off working capital improvements and investment securities disposals. The quality of earnings is judged to be highly dependent on non-operating/special items and valuation OCI; without a recovery in recurring operating earnings, sustainability is low.
Full Year guidance plans Revenue ¥1750.0B (YoY +11.1%), Operating Income ¥60.0B (operating margin 3.4%), Ordinary Income ¥60.0B (+248.8%), Net Income attributable to owners of parent ¥65.0B, EPS 148.31円, and dividend ¥7.00円. Versus current results, this implies Revenue +¥175.5B (+11.1%), Operating Income improvement +¥57.4B (effectively more than 22x), and operating margin improvement from 0.2% to 3.4% (+3.2pt). Progress rates (6 months / full-year assumption) are Revenue 90.0%, Operating Income 4.3%, Ordinary Income 28.7%, indicating very low progress at the operating level and a plan that assumes substantial earnings improvement in the second half. Achieving guidance requires elimination of the Paper Materials Business loss (¥-21.1B → profitable) and a recovery in Functional Products profitability, predicated on price revisions, production efficiency improvements, and energy-cost reductions—i.e., structural reforms. The dividend forecast ¥7.00円 is a cut from this year’s ¥15.00円, reflecting a conservative return policy given uncertainty in recovery and financial capacity. No disclosure of FX or raw material price assumptions was provided; the plan is bullish on an improving business environment, making quarterly progress monitoring important.
A year-end dividend of ¥15.00円 (interim dividend ¥0) was paid, totaling dividend payments of ¥6.69B. Dividends were paid despite Net Income attributable to owners of parent being a loss of ¥-3.1B, funded from retained earnings. Payout ratio cannot be computed on a profit basis (loss) but the company maintained dividend continuity. With FCF ¥68.2B, dividends ¥6.69B imply an FCF coverage of about 10.2x this year, but this was due to one-off FCF expansion from investment securities disposals ¥54.3B. On a normal FCF basis (Operating CF ¥52.2B − CapEx ¥36.9B ≈ ¥15B), dividend capacity is limited. Share repurchases were minor at ¥0.85B, so dividends are the main shareholder return. Next-year dividend forecast is ¥7.00円 (down from ¥15.00円), reflecting a conservative capital allocation prioritizing recovery and liquidity. The payout ratio against forecast EPS 148.31円 at ¥7.00円 is about 4.7%, low, leaving scope for gradual increases if earnings improve; however, near-term priority appears to be restoring financial soundness. Dividend sustainability depends on recovery of operating CF, reduction of interest-bearing debt, and improved working capital efficiency; the company must transition to autonomous cash-flow generation not reliant on investment securities disposals.
Structural loss continuation risk in Paper Materials Business: Paper Materials recorded an Operating Loss of ¥-21.1B (margin ▲2.6%), turning from prior-year profit ¥+13.5B and significantly pressuring consolidated Operating Income ¥2.6B. Demand decline, intensified price competition, and persistently high energy/logistics costs combine to impair fixed-cost absorption. The next fiscal year’s plan assumes recovery to Operating Income ¥60.0B, but this depends on eliminating the Paper Materials loss via price revisions, production optimization, and cost reductions; delays in reforms pose material downside risk to consolidated results.
Short-term liquidity and refinancing risk: Current ratio 99.6% and cash ¥49.0B versus short-term borrowings ¥420.1B + CP ¥30.0B yield cash/short-term-liabilities ratio 0.12x, indicating very weak short-term liquidity. Interest-bearing debt ¥615.7B with interest coverage 0.36x and Debt/EBITDA 10.6x reflect low debt-service capacity. Net decrease in CP ▲¥70.0B suggests contraction of short-term funding, but short-term borrowing dependence remains high at 68%, leaving exposure to rising interest rates and poorer terms on refinancing. If stable operating CF and working capital compression or asset sales to reduce interest-bearing debt do not proceed, liquidity shocks are possible.
Dependence on valuation-driven net assets and reversal risk: The increase in Equity to ¥1031.8B (from ¥852.8B) was primarily due to retirement benefit remeasurement gain ¥163.2B (OCI) from pension asset improvements and discount-rate movements. Of comprehensive income ¥186.3B, only Net Income was ¥-3.1B, with ¥167.2B attributable to OCI valuation gains. If interest rates decline or pension asset performance deteriorates, OCI could reverse—reducing net assets and Equity Ratio. The improvement in financial soundness is valuation-dependent, and absence of accumulation of equity from core profits is a point of caution.
収益性・リターン
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 0.2% | 7.8% (4.6%–12.3%) | -7.6pt |
| Net Income Margin | -0.2% | 5.2% (2.3%–8.2%) | -5.4pt |
Profitability is well below industry median; operating and net margins rank at the lower end among manufacturers.
成長性・資本効率
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | -10.5% | 3.7% (-0.4%–9.3%) | -14.2pt |
Revenue growth rate is 14.2pt below the industry median, placing the company among the lower-growth manufacturers.
※Source: Company compilation
Progress of structural reforms in Paper Materials Business is key to consolidated recovery: Paper Materials swung to an Operating Loss of ¥-21.1B, substantially pressuring consolidated Operating Income ¥2.6B. The plan to recover to Operating Income ¥60.0B assumes an operating margin improvement from 0.2% to 3.4% (+3.2pt), making speed of revenue/price recovery, production optimization, and cost reductions in Paper Materials the catalyst for achieving targets. Functional Products maintains a positive margin of 3.0%, highlighting portfolio polarization. Quarterly margin improvement trends in Paper Materials and deepening of high-value-added mix in Functional Products are key watch items.
Progress in short-term liquidity and interest-bearing debt reduction: With current ratio 99.6%, cash/short-term-liabilities ratio 0.12x, and interest coverage 0.36x, both short-term liquidity and debt-service capacity are weak. Improving working capital efficiency (inventory days 114, CCC 128 days) and restoration of operating CF generation are essential. This year FCF of ¥68.2B was secured via investment securities disposals ¥54.3B, but normal FCF is estimated at ~¥15B, and repayment of interest-bearing debt ¥615.7B is proceeding slowly. Monitoring short-term borrowing/CP balances, OCF/EBITDA ratio (current 0.90x), and cash generation through asset efficiency will be important.
This report was automatically generated by AI analyzing XBRL financial statement data and is a financial analysis document. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by our firm based on public financial statements. Investment decisions should be made at your own responsibility; consult professional advisors as required.