Japan Pulp and Paper Company (8032) Q2 2024 earnings summary

Executive summary

• H1 FY2024 revenue rose 1.9% YoY to ¥271,375m, but ordinary profit fell 13.3% to ¥8,909m as overseas wholesale sales and margins weakened; net income fell to ¥5,324m.

• Domestic price revisions and paper-processing profit growth partly offset overseas inventory adjustments; FY ordinary-profit guidance remains ¥17,000m.

Financial highlights

• Revenue ¥271,375m, up 1.9% YoY; gross profit ¥43,633m, up 3.6%; operating profit ¥8,867m, down 7.0%.

• Ordinary profit ¥8,909m, 86.7% of prior-year level; net income attributable to owners of parent ¥5,324m, 29.9% of prior-year level.

• Domestic wholesale and paper-processing price revisions supported revenue despite lower sales volumes in several product lines.

Outlook and guidance

• FY2024 forecast: operating profit ¥18,000m, ordinary profit ¥17,000m and net income attributable to owners of parent ¥11,000m; respectively 88.8%, 80.1% and 43.3% of FY2023 results.

• Forecast assumes soft paper and paperboard demand, with prior-year selling prices maintained to offset lower volumes.

• Ordinary-profit forecasts were revised by +¥900m for domestic wholesale, -¥2,400m for overseas wholesale and +¥1,600m for paper processing.

• Annual dividend forecast is ¥130 per share, the third consecutive annual increase.