| Metric | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥9632.1B | ¥9225.2B | +4.4% |
| Operating Income | ¥520.0B | ¥342.6B | +51.8% |
| Ordinary Income | ¥582.7B | ¥371.8B | +56.7% |
| Net Income | ¥221.0B | ¥24.7B | +795.8% |
| ROE | 3.0% | 0.4% | - |
The FY2026 (year ended March 2026) results show revenue of ¥9,632B (YoY +¥407B, +4.4%), Operating Income of ¥520B (YoY +¥177B, +51.8%), Ordinary Income of ¥583B (YoY +¥211B, +56.7%), and Net Income attributable to owners of parent of ¥221B (YoY +¥196B, +795.8%), representing year-over-year revenue and profit growth. Operating margin improved to 5.4% (from 3.7% a year earlier, +1.7pt), indicating an improved profit structure. The large increase in Net Income was largely due to ¥208B of extraordinary gains (¥180B gain on sale of investment securities, ¥28B gain on sale of fixed assets), creating a ¥190B gap between Ordinary Income and Net Income. Non-operating contributions included dividend income ¥33B, foreign exchange gains ¥26B, and equity-method investment profit ¥31B. ROE was 3.0% (prior year figure not comparable), and BPS was ¥4,639.87, reflecting accumulation of shareholders’ equity. Total return (dividends + share buybacks) was ¥273B, equal to 76% of Net Income attributable to owners of parent, indicating an active return policy. The forecast for the next fiscal year is Revenue ¥10,300B (＋6.9%) and Operating Income ¥300B (－42.3%); profit decline is expected due to the fall-off of extraordinary gains, but core earnings remain solid, suggesting potential for sustained growth.
Revenue: Revenue was ¥9,632B (YoY +4.4%). By segment, Packaging (packaging containers) was ¥6,073B (－0.1%) essentially flat; Engineering / Filling / Logistics was ¥2,291B (+16.4%) posting strong growth; Steel Sheet-related was ¥1,143B (+1.7%); Functional Materials-related was ¥579B (+11.4%); Real Estate-related was ¥99B (+2.8%), all increasing. By region, Japan was ¥7,216B (¥7,217B prior year) flat; Asia was ¥1,561B (¥1,278B prior year, +22.1%); Other regions were ¥856B (¥730B prior year, +17.3%), with overseas markets driving growth. The core Packaging segment accounts for 63.0% of revenue but growth has slowed; double-digit growth in Engineering and Functional Materials drove group revenue. Gross margin improved to 14.6% (prior year 13.3%, +1.3pt), aided by realized price pass-through and stabilization of raw material costs.
Profitability: Operating Income was ¥520B (YoY +¥177B, +51.8%). SG&A was ¥885B (¥883B prior year) nearly flat, demonstrating leverage from controlling fixed costs against higher sales. Segment Operating Income: Packaging ¥268B (margin 4.4%, prior year 4.5%) roughly flat; Engineering / Filling / Logistics ¥33B (margin 1.4%, +134.1%) returned to profitability; Steel Sheet-related ¥99B (margin 8.6%, +28.1%); Functional Materials-related ¥68B (margin 11.8%, +12.0%); Real Estate-related ¥50B (margin 50.6%, +10.3%), all improving. Non-operating income was ¥157B (dividend income ¥33B, FX gains ¥26B, equity-method investment profit ¥31B, etc.), non-operating expenses were ¥95B (interest expense ¥39B, etc.), resulting in Ordinary Income of ¥583B (+56.7%). Extraordinary gains of ¥208B (gain on sale of investment securities ¥180B, gain on sale of fixed assets ¥28B) less extraordinary losses ¥18B (impairment loss ¥18B, loss on disposal of fixed assets ¥16B) yielded Profit before Income Taxes of ¥773B. After income taxes of ¥206B and non-controlling interests of ¥17B, Net Income attributable to owners of parent was ¥221B (+795.8%). In summary, revenue and profit rose, but the large increase in Net Income depends on one-off extraordinary gains; improvement in core earnings (Operating Income) underpins sustainable growth.
Packaging (packaging containers): Revenue ¥6,073B (－0.1%), Operating Income ¥268B (－0.8%), margin 4.4% — low and stable. It is the primary segment with 63.0% revenue composition, but growth has slowed and margin improvement opportunities remain. Engineering / Filling / Logistics: Revenue ¥2,291B (+16.4%), Operating Income ¥33B (+134.1%), margin 1.4% — low margin but turned profitable from a prior loss, with rapid improvement in profitability. Steel Sheet-related: Revenue ¥1,143B (+1.7%), Operating Income ¥99B (+28.1%), margin 8.6% — high level. Functional Materials-related: Revenue ¥579B (+11.4%), Operating Income ¥68B (+12.0%), margin 11.8% — maintains the highest profitability. Real Estate-related: Revenue ¥99B (+2.8%), Operating Income ¥50B (+10.3%), margin 50.6% — exceptionally high and stable income source. Other segments: Revenue ¥313B (+1.3%), Operating Income ¥22B (+40.3%), margin 6.9%. Consolidated Operating Income after corporate cost allocation was ¥520B. The low-margin structure of the core Packaging business suppresses group margins, while high growth and high-margin Engineering, Functional Materials, and Real Estate contribute to revenue diversification.
Profitability: Operating margin improved to 5.4% (prior year 3.7%, +1.7pt), and gross margin rose to 14.6% (prior year 13.3%, +1.3pt) as price pass-through and cost stabilization progressed. SG&A ratio was 9.2% (prior year 9.6%), evidencing operating leverage. ROE was 3.0%; while prior-year comparables are limited, it is calculated approximately as Net Income margin 2.3% × Total Asset Turnover 0.78 × Financial Leverage 1.70 ≈ 3.0%, with margin improvement the main driver. ROA (on Ordinary Income basis) improved to 4.8% (prior year 3.1%). Cash quality: Operating Cash Flow (OCF) was ¥890B, 4.0x Net Income ¥221B, and 84.1% of EBITDA (Operating Income ¥520B + Depreciation ¥539B = ¥1,059B), indicating a healthy cash conversion rate though working capital buildup (Accounts receivable increase ¥121B, Inventories increase ¥66B) partially offset this. Free Cash Flow (FCF) was ¥684B (OCF ¥890B − Investing CF ¥206B) and remained robust after absorbing capital expenditures of ¥467B. Investment efficiency: Total Asset Turnover was 0.78x (prior year 0.77x). ROIC (Operating Income ¥520B × (1 − effective tax rate 26.6%) ÷ (Shareholders’ Equity ¥7,276B + Interest-bearing Debt ¥1,844B)) is approximately 4.2%, indicating modest capital efficiency. Financial soundness: Equity Ratio 58.6% (prior year 55.5%, +3.1pt) improved; Current Ratio 195.7%, Quick Ratio 156.9% indicate sufficient liquidity. Debt/EBITDA was 1.74x (Interest-bearing debt ¥1,844B ÷ EBITDA ¥1,059B), and Interest Coverage was 13.5x (Operating Income ¥520B ÷ Interest expense ¥39B), demonstrating strong debt tolerance.
OCF was ¥890B (YoY −5.4%). Starting from Profit before Income Taxes ¥773B, add back non-cash charges including Depreciation ¥539B, adjust for working capital changes (Accounts receivable increase −¥121B, Inventories increase −¥66B, Accounts payable increase +¥21B), and subtract income taxes paid −¥73B. The OCF subtotal was ¥930B but was burdened by working capital increases −¥167B; nevertheless, OCF remained roughly in line with the prior year due to profit growth. Investing CF was −¥206B: CapEx −¥467B (prior year −¥336B) increased, offset by proceeds from sale of investment securities +¥246B, keeping net outflow moderate. FCF was ¥684B (prior year ¥429B), a substantial improvement and comfortably covering dividend payments −¥159B. Financing CF was −¥661B, driven by share buybacks −¥258B, long-term debt repayments −¥309B, and dividend payments −¥159B. Cash and cash equivalents at end of period were ¥1,149B (beginning ¥1,100B, net increase +¥49B), supporting strong liquidity. Working capital days: DSO 86 days (Accounts receivable ¥2,272B ÷ Revenue ¥9,632B × 365), DIO 92 days (Inventories ¥1,226B ÷ Cost of Sales ¥8,227B × 365), DPO 50 days (Accounts payable ¥1,128B ÷ Cost of Sales ¥8,227B × 365), resulting in CCC 128 days — long and indicating scope for efficiency improvement.
There is a ¥362B gap between Ordinary Income ¥583B and Net Income ¥221B, primarily due to temporary extraordinary gains of ¥208B (gain on sale of investment securities ¥180B, gain on sale of fixed assets ¥28B). Excluding these, a substantive Net Income equivalent would be approximately ¥413B, suggesting that Ordinary Income-based profitability reflects sustainable performance. Of non-operating income ¥157B, dividend income ¥33B and equity-method investment profit ¥31B are sustainable financial incomes, whereas FX gains ¥26B are volatile. Non-operating expenses ¥95B are mainly interest expense ¥39B and represent recurring burdens. Extraordinary losses ¥18B (impairment loss ¥18B, loss on disposal of fixed assets ¥16B) are non-recurring. Comprehensive income ¥752B comprises Net Income ¥221B plus OCI items such as foreign currency translation adjustments ¥52B, valuation differences on available-for-sale securities ¥51B, and retirement benefit adjustments ¥87B, with total OCI +¥531B boosting equity on the balance sheet. The large divergence between Net Income and OCI reflects realization of valuation gains on investment securities (recognized as extraordinary gains on sale) this period. OCF ¥890B is 4.0x Net Income ¥221B but 84% of EBITDA ¥1,059B, with working capital increases limiting cash conversion. Overall, quality of earnings shows clear improvement in core income (Operating Income), but Net Income is dependent on one-off extraordinary gains and is expected to normalize in the next fiscal year.
The forecast for the next fiscal year (FY2027, year ending March 2027) is Revenue ¥10,300B (YoY +6.9%), Operating Income ¥300B (−42.3%), Ordinary Income ¥350B (−39.9%), and Net Income attributable to owners of parent ¥220B (−0.5%). The decline in Operating Income reflects the absence of this period’s extraordinary factors and conservative raw material and FX assumptions. The expected revenue increase (+¥668B) assumes overseas business expansion and domestic demand recovery, but Operating Income is projected to decline by ¥220B, incorporating either lower gross margin or increased costs. Ordinary Income is projected to fall ¥233B, considering deterioration in non-operating items (e.g., FX gain reversal risk). Net Income is forecast to be almost flat (−¥1B), as the loss of extraordinary gains (assumed ¥208B → ¥0B) is offset by lower tax burden and adjustments for non-controlling interests. EPS is forecast ¥199.51 (current period ¥361.63), and dividend forecast is ¥93 (current period ¥132), implying a dividend cut; payout ratio is 46.6% which remains within a sustainable range, but total return is expected to shrink YoY. At the half-year stage, progress toward the full-year forecast was Revenue 93.5% and Operating Income 173.3%, indicating front-loaded results and significant downside risk in the second half. The company’s plan is conservative, while continued strength in core earnings and improvements in working capital efficiency could provide upside.
Dividends were interim ¥57 and year-end ¥75 for an annual dividend of ¥132 (prior year ¥45, +¥87, +193.3%), a substantial increase. Payout ratio is 36.5% (Dividend ¥132 ÷ EPS ¥361.63; the stated figure 67.6% may be based on forecast EPS) and is within a sustainable range. FCF coverage is 4.3x (FCF ¥684B ÷ total dividends ¥159B), indicating ample capacity. Share buybacks amounted to −¥258B in Financing CF, and combined with dividends ¥159B, total shareholder returns were ¥417B, equivalent to 189% of Net Income attributable to owners of parent ¥221B — an aggressive return policy exceeding profit but funded within FCF ¥684B. Next fiscal year dividend forecast is ¥93 (annual), a decrease of ¥39 YoY; based on forecast EPS ¥199.51, payout ratio would be 46.6%, maintaining an appropriate level. Total return ratio (dividends + buybacks) was high this period, but is expected to be adjusted next period to balance profit normalization and investment capacity. The shareholder return policy centers on stable dividends, supplemented by opportunistic share buybacks to enhance capital efficiency.
Low profitability risk in core Packaging segment: Packaging accounts for 63.0% of revenue but has Operating Income margin of 4.4%, below the group average 5.4% and well below Steel Sheet 8.6% and Functional Materials 11.8%. Gross margin of 14.6% falls short of industry benchmarks above 20%, and delayed price pass-through or intensifying competition could pressure profitability. Segment Operating Income ¥268B (−0.8%) was flat YoY, suggesting limited profit growth from revenue increases and representing a group-level bottleneck. Domestic revenue stagnation highlights slowing growth.
Cash conversion risk from weak working capital efficiency: CCC 128 days (DSO 86 + DIO 92 − DPO 50) is long; receivables and inventory buildup depress OCF. This period’s working capital increase −¥167B (Accounts receivable −¥121B, Inventories −¥66B) reduced OCF subtotal ¥930B by approximately 18%. OCF/EBITDA at 84% is below industry average (over 90%), indicating limited cash realization efficiency of sales and profits. Construction-in-progress (capital work in progress) +¥61B and an accumulating investment pipeline also pose future fixed-cost increase risks.
Dependence on extraordinary gains and next-period profit decline risk: Of Net Income ¥221B, extraordinary gains ¥208B (gain on sale of investment securities ¥180B, etc.) accounted for 94%, creating a large gap with core Ordinary Income ¥583B. Next period forecasts show Operating Income ¥300B (−42.3%) and Ordinary Income ¥350B (−39.9%), indicating profit decline and no recurrence of extraordinary gains; maintaining Net Income at ¥220B depends on tax adjustments. Short-term debt ratio 46.5% (short-term borrowings ¥854B ÷ total liabilities ¥5,131B) increases refinancing sensitivity, and rising interest rates could raise financing costs.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.4% | 7.8% (4.6%–12.3%) | -2.4pt |
| Net Profit Margin | 2.3% | 5.2% (2.3%–8.2%) | -2.9pt |
Operating margin trails the industry median 7.8% by 2.4pt, influenced by the low-margin structure of the core Packaging business. Net profit margin 2.3% also falls short of the median 5.2%; excluding extraordinary gains, the company’s underlying performance is around the industry median, but sustainable earnings power is below median.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 4.4% | 3.7% (-0.4%–9.3%) | +0.7pt |
Revenue growth exceeds the industry median 3.7%, driven by double-digit growth in Engineering and Functional Materials. However, the core Packaging segment is flat, so sustainability of growth depends on expansion of higher-margin segments.
※Source: Company compilation
Significant improvement in Operating Income and results of cost control: Operating Income ¥520B (+51.8%) reflects established price pass-through, stabilized raw material costs, and SG&A containment (+0.3%), demonstrating operating leverage. Gross margin 14.6% (+1.3pt) and Operating margin 5.4% (+1.7pt) indicate improved profit structure, and the return to profitability in Engineering / Filling / Logistics (+134.1%) supports the diversification effect of the business portfolio. Although next fiscal year guidance is for lower profits, continued strength in core earnings and potential working capital efficiency gains could provide upside.
Dependence on low-margin Packaging and on high-margin businesses: Packaging, comprising 63.0% of revenue, has a low Operating margin of 4.4%, creating a large gap versus Steel Sheet 8.6%, Functional Materials 11.8%, and Real Estate 50.6%. Group Operating margin 5.4% trails the industry median 7.8% by 2.4pt, making Packaging margin improvement a key medium-term evaluation point. Expansion of high-margin segments (Functional Materials +11.4% growth, Real Estate +10.3% profit growth) will drive portfolio improvement, but sustainable growth is limited without lifting the core business.
Working capital efficiency and scope to improve FCF generation: CCC 128 days (DSO 86, DIO 92) is long, and OCF/EBITDA 84% falls short of industry levels (over 90%). Working capital increase −¥167B reduced the OCF subtotal ¥930B by 18%, and weak cash conversion limits growth investment capacity. FCF ¥684B exceeds total shareholder returns ¥417B, supporting financial safety, but shortening CCC (target under 90 days) could be the next value-creation driver. Construction-in-progress +¥61B and the accumulating investment pipeline also require attention regarding future capacity utilization and increased depreciation burden.
This report is an earnings analysis document automatically generated by AI analyzing XBRL earnings release data. It does not constitute an investment recommendation for any specific security. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions are your own responsibility; please consult a professional advisor as necessary.