| Indicator | This Period | Prior-Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥2240.9B | ¥2196.1B | +2.0% |
| Operating Income / Operating Profit | ¥113.8B | ¥93.6B | +21.6% |
| Ordinary Income | ¥114.5B | ¥94.0B | +21.7% |
| Net Income / Net Profit | ¥62.4B | ¥48.9B | +27.5% |
| ROE | 6.1% | 5.2% | - |
For the fiscal year ended March 2026, Revenue was ¥2,240.9B (YoY +¥44.8B +2.0%), Operating Income was ¥113.8B (YoY +¥20.2B +21.6%), Ordinary Income was ¥114.5B (YoY +¥20.5B +21.7%), and Net Income attributable to owners of the parent was ¥62.4B (YoY +¥13.5B +27.5%). The company delivered revenue and profit growth, with price pass-through and efficiency gains contributing to a gross margin of 18.1% (prior 16.8%, improvement +1.3pt) and an operating margin of 5.1% (prior 4.3%, improvement +0.8pt), reflecting improved profitability. The core Corrugated Board (段ボール) business led company-wide profit growth with Operating Income of ¥104.5B (+21.7%), Transportation & Warehousing delivered a solid ¥10.8B (+14.5%), and the Housing Business, despite lower sales, improved profitability to Operating Income of ¥10.2B (+10.7%).
[Revenue] Revenue was ¥2,240.9B (YoY +2.0%), a modest increase. By segment, Corrugated Board was ¥1,247.3B (+4.1%) and drove results as the core segment (55.6% of total). Stabilization of recovered paper and energy prices enabled price revisions to take hold and manufacturing efficiency improvements led to gains in both volume and price. Housing was ¥551.9B (-4.6%) with softer demand, while Transportation & Warehousing was ¥504.8B (+4.7%) benefitting from recovery in cargo movements and logistics efficiency improvements.
[Profitability] Operating Income rose sharply to ¥113.8B (YoY +21.6%). Gross margin improved to 18.1% (prior 16.8%, +1.3pt) as price pass-through and cost control were effective. Selling, general & administrative expenses (SG&A) were ¥292.2B (SG&A ratio 13.0%), up +0.4pt from ¥27,582 million (12.6%) in the prior year, but the increase was absorbed by growth in gross profit (¥406.0B, prior ¥369.4B, +9.9%), delivering operating leverage. Non-operating items included dividend income ¥2.8B and foreign exchange gains ¥2.0B; interest expense increased to ¥8.5B (prior ¥5.5B) but was absorbed, resulting in Ordinary Income of ¥114.5B (+21.7%). Extraordinary gains included gain on sale of available-for-sale securities ¥2.6B and gain on sale of fixed assets ¥1.9B; impairment losses ¥2.0B were recorded but impact was limited. Profit before income taxes was ¥112.2B (prior ¥95.2B, +17.9%); after deducting income taxes of ¥37.5B, Net Income was ¥62.4B (+27.5%). In conclusion: revenue and profit growth.
The Corrugated Board business posted Revenue ¥1,247.3B (YoY +4.1%), Operating Income ¥104.5B (+21.7%), and margin 8.4% (prior 7.2%, +1.2pt). Penetration of price revisions and improved manufacturing yields substantially lifted profitability, and as the core business accounting for 91.8% of consolidated Operating Income it drove the company’s profit growth. The Housing business saw Revenue ¥551.9B (-4.6%) due to softer demand but Operating Income improved to ¥10.2B (+10.7%) and margin 1.8% (prior 1.6%, +0.2pt). Transportation & Warehousing reported Revenue ¥504.8B (+4.7%), Operating Income ¥10.8B (+14.5%), and margin 2.1% (prior 1.9%, +0.2pt) as cargo recovery and logistics efficiencies contributed. All segments achieved profit increases, delivering balanced growth.
[Profitability] Operating margin 5.1% (prior 4.3%, +0.8pt) and Net Income margin 2.8% (prior 2.2%, +0.6pt) both improved. ROE was 6.1% (prior 7.2%), which declined slightly because the increase in shareholders’ equity (¥1,029.7B, prior ¥933.7B, +10.3%) outpaced Net Income growth (+27.5%); DuPont decomposition: Net Income margin 2.8% × Total Asset Turnover 1.00 × Financial Leverage 2.18 ≈ 6.1%. [Cash Quality] Operating Cash Flow (OCF) was ¥151.7B, 2.43x Net Income ¥62.4B, indicating high quality; interest coverage on an EBIT basis was 13.4x (Operating Income ¥113.8B ÷ Interest expense ¥8.5B), showing adequate resilience to interest burden. [Investment Efficiency] Total Asset Turnover was 1.00x (prior 1.06x), a slight decline; capital expenditures were ¥98.0B, exceeding depreciation ¥84.6B, signaling a growth investment stance. [Financial Soundness] Equity Ratio 46.0% (prior 44.8%, +1.2pt), D/E ratio 1.17x (interest-bearing debt ¥584.1B ÷ shareholders’ equity ¥1,029.7B), and current ratio 146.7% (current assets ¥964.5B ÷ current liabilities ¥657.4B) indicate a stable financial base.
Operating Cash Flow (OCF) was ¥151.7B (prior ¥181.4B, -16.4%), a decline, but OCF before working capital changes totaled ¥184.9B (prior ¥215.6B), showing solid earnings-generated cash. Working capital increases (inventory -¥16.8B, accounts receivable improvement +¥6.7B, accounts payable increase +¥12.9B) resulted in a net cash absorption of -¥33.2B, which contributed to the YoY decline. Investing Cash Flow was -¥106.5B, driven by capital expenditures of ¥98.0B (prior ¥103.4B) as growth investment continued; proceeds from sale of fixed assets ¥14.7B partially offset outflows. Free Cash Flow was ¥45.2B (prior ¥73.9B), a decline but sufficient to cover dividends ¥19.7B and share buybacks ¥0.0B. Financing Cash Flow was -¥21.8B, reflecting net repayment with long-term borrowings raised ¥60.6B and repayments -¥81.7B, and an increase in short-term borrowings ¥22.0B to manage liquidity. Cash and cash equivalents rose to ¥238.3B (beginning balance ¥208.7B, +14.2%), maintaining liquidity headroom.
The gap between Ordinary Income ¥114.5B and Net Income ¥62.4B is mainly due to income taxes ¥37.5B and non-controlling interests ¥1.1B; the effective tax rate was 33.4%, within an appropriate range. Of non-operating income ¥12.6B, dividend income ¥2.8B and foreign exchange gains ¥2.0B are recurring, while gain on sale of available-for-sale securities ¥2.6B and gain on sale of fixed assets ¥1.9B are one-time factors; impairment losses ¥2.0B are also one-off and largely offset these gains. Comprehensive income ¥114.2B far exceeded Net Income ¥62.4B; other comprehensive income ¥39.5B comprised valuation difference on available-for-sale securities ¥17.9B, actuarial gains/losses related to retirement benefits ¥15.0B, and foreign currency translation adjustments ¥6.6B. OCF before working capital changes ¥184.9B is 2.96x Net Income ¥62.4B, indicating high accrual quality and strong cash backing of earnings.
Full Year guidance is Revenue ¥2,205.0B (YoY -1.6%), Operating Income ¥127.0B (+11.6%), Ordinary Income ¥119.0B (+4.0%), EPS ¥491.01. Revenue guidance is conservative, while profit targets assume continued focus on profitability. The FY forecast Revenue ¥2,205.0B is ¥35.9B below actual Revenue ¥2,240.9B, likely reflecting a conservative plan that factors in second-half demand adjustments. Operating Income guidance of ¥127.0B versus current operating income ¥113.8B implies an additional ¥13.2B in the second half, assuming continued price pass-through and efficiency gains. Forecast dividend ¥85 per share is lower than the current year dividend ¥130 (interim ¥65 + year-end ¥65), but based on FY EPS ¥491.01 the payout ratio is 17.3%, indicating ample capacity and interpreted as normalization toward a steady level.
Annual dividend ¥130 (interim ¥65 + year-end ¥65, same as prior year), payout ratio 25.3% (based on basic EPS ¥446.46) is at a sustainable level. Total dividends amounted to ¥19.7B (based on weighted average shares outstanding 16,488 thousand), providing 2.3x coverage versus Free Cash Flow ¥45.2B and indicating stability. No share buybacks were executed (¥0.0B), so Total Return Ratio equals the payout ratio at 25.3%. Next year’s dividend guidance ¥85 (based on EPS ¥491.01, payout ratio 17.3%) implies a cut, but given earnings growth and financial flexibility the risk to dividend sustainability is low. DOE (dividend on equity) is 1.8%, approximately consistent with ROE 6.1% × payout ratio 25.3%.
Raw material price volatility: Risk of increases in recovered paper and energy prices used in corrugated board production. While price pass-through and efficiency improvements achieved a gross margin of 18.1% (+1.3pt) this term, gross margin remains below 20% and is vulnerable. A rapid rise in raw material costs could compress margins due to passthrough lag. Inventory valuation losses or rising purchase prices could also deteriorate cash flows.
Segment concentration risk: High concentration with Corrugated Board accounting for 55.6% of Revenue and 91.8% of Operating Income. Deterioration in this segment’s market environment (demand decline, intensified competition, price erosion) would directly affect consolidated performance. The Housing business recorded -4.6% revenue and Transportation & Warehousing +4.7%; diversification benefits are limited and high dependency on Corrugated Board increases volatility.
Financial leverage and interest rate risk: Interest-bearing debt ¥584.1B (D/E ratio 1.17x) and interest expense ¥8.5B (prior ¥5.5B, +54.5%) indicate rising interest burden. While interest coverage is 13.4x, an increase in short-term borrowings to ¥128.2B (+27.0%) raises the risk that rising interest rates could increase refinancing costs or worsen funding conditions. Continued working capital increases pressuring OCF (-16.4%) could raise borrowing dependence if sustained.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.1% | 7.8% (4.6%–12.3%) | -2.7pt |
| Net Income Margin | 2.8% | 5.2% (2.3%–8.2%) | -2.4pt |
Both operating margin and net income margin are below the industry median, indicating room for profitability improvement relative to the manufacturing sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 2.0% | 3.7% (-0.4%–9.3%) | -1.7pt |
Revenue growth lags the industry median by 1.7pt, indicating a slower top-line expansion pace compared with peers.
※ Source: Company compilation
Sustainability of profitability improvements from price pass-through and efficiencies: Gross margin 18.1% (+1.3pt) and operating margin 5.1% (+0.8pt) improved, with Operating Income up +21.6%. The core Corrugated Board business improved margin to 8.4% (+1.2pt), helped by stabilization in recovered paper and energy prices and implementation of price revisions. Continued management of price-cost spreads could sustain profit growth, but gross margin remains below 20% and is vulnerable to raw material price upswings that could rapidly compress profitability.
Quality of OCF and cash generation capacity: OCF ¥151.7B is 2.43x Net Income ¥62.4B, indicating high quality, and Free Cash Flow ¥45.2B supports both dividends and growth investment. Interest coverage 13.4x and D/E ratio 1.17x point to financial stability, but OCF slowed YoY (-16.4%) due to working capital increases (inventory -¥16.8B, etc.). If inventory turnover and receivables management do not improve, future cash generation could weaken and reliance on borrowings could increase; this should be monitored.
This report is an earnings analysis automatically generated by AI from XBRL financial statement data. It is not a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your own responsibility; consult professional advisors as needed.