Nippon Paper Industries Co (3863) Q2 2025 earnings summary

Executive summary

• Net sales for the first half of FY2025/3 were ¥584.5 billion, up 0.1% year-over-year, driven by growth in household paper, healthcare, and chemicals, offsetting declines in graphic paper demand.

• Operating income dropped 57.6% year-over-year to ¥2.1 billion, mainly due to large-scale maintenance at Nippon Dynawave Packaging.

• Net income attributable to owners was a loss of ¥12.4 billion, deepening from a ¥9.4 billion loss in the prior year.

• Extraordinary losses included business structure improvement expenses and impairment losses from planned mill shutdowns.

• Ordinary income fell 69.0% year-over-year to ¥1.8 billion.

Financial highlights

• Gross profit increased slightly to ¥86.7 billion from ¥86.0 billion year-over-year.

• Net sales increased by ¥0.6 billion year-over-year, despite lower domestic paper and paperboard sales volumes.

• Net loss per share was ¥107.04, compared to ¥81.18 in the prior year.

• Comprehensive income decreased to ¥10.6 billion from ¥23.9 billion year-over-year.

• Adjusted net D/E ratio rose to 2.07 from 1.95 at the end of March 2024.

Outlook and guidance

• Full-year net sales forecast is ¥1,200.0 billion, up 2.8% year-over-year.

• Operating income is projected to rise 33.2% to ¥23.0 billion, with ordinary income up 30.6% to ¥19.0 billion.

• Net income is forecast to fall sharply to ¥3.0 billion from ¥22.7 billion in FY2024/3.

• Dividend forecast maintained at ¥10 per share for both Q2 and year-end.

• Segment operating income forecasts revised to reflect first-half trends, with significant improvement expected in Daily-Life Products (Overseas) in H2.