Nippon Paper Industries Co (3863) Q2 2026 earnings summary

Executive summary

• Net sales for the first half of FY2026/3 rose 0.8% year-over-year to ¥589.2 billion, driven by growth in Daily-Life Products, despite declines in paper and paperboard sales.

• Operating income surged to ¥9.0 billion from ¥2.1 billion, reflecting recovery at Opal and Japan Dynawave Packaging after prior maintenance disruptions.

• Net income turned positive at ¥0.8 billion, a significant improvement from a ¥12.4 billion loss in the prior year.

• Comprehensive income turned negative at ¥(10,411) million, down from ¥10,550 million last year.

• Extraordinary losses included boiler repairs at Yatsushiro Mill and labor dispute-related suspensions at Opal.

Financial highlights

• Daily-Life Products segment net sales increased by ¥14.5 billion year-over-year, with operating income up ¥11.5 billion, mainly from overseas recovery.

• Paper and Paperboard segment saw net sales drop ¥8.9 billion and operating income fall by ¥5.0 billion due to lower export volumes and higher costs.

• Energy business revenue declined by ¥2.0 billion, but operating profit remained flat.

• Wood Products and Construction Related segment posted higher revenue and profit, supported by domestic biomass fuel demand.

• Total assets stood at ¥1,682.3 billion as of September 30, 2025; net interest-bearing debt increased by ¥15.9 billion.

Outlook and guidance

• Full-year FY2026/3 net sales forecast revised to ¥1,200.0 billion, up 1.5% year-over-year but down ¥5.0 billion from initial guidance.

• Operating income forecast lowered to ¥30.0 billion (from ¥34.0 billion), and net income to ¥10.0 billion (from ¥12.0 billion), reflecting weaker packaging demand in Australia and export markets.

• Dividend forecast maintained at ¥10.00 per share for the fiscal year.

• Second half expected to benefit from reduced fixed costs and expanded price adjustments.

• Basic earnings per share forecast at ¥86.63 for the full year.