Nippon Paper Industries Co (3863) Q2 2027 earnings summary

Executive summary

• H1 FY2027 sales rose 7.3% YoY to ¥632,319mn, while operating profit fell 92.1% to ¥715mn; profit attributable to owners rose to ¥5,266mn.

• FY2027 forecast: sales ¥1,220bn, operating loss ¥5bn and net loss ¥40bn, reflecting earthquake damage, facility-accident losses and restructuring.

• Medium-Term Business Plan 2030 execution continued through balance-sheet optimization, structural reforms and profitability initiatives, amid Yatsushiro Mill and NDP disruptions.

Financial highlights

• H1 gross profit was ¥92,913mn versus ¥96,071mn; ordinary profit was ¥636mn, down 92.6% YoY.

• Profit attributable to owners was ¥5,266mn versus ¥754mn; basic EPS was ¥45.67 versus ¥6.54.

• Comprehensive income was ¥21,813mn versus a loss of ¥10,411mn in the prior-year period.

• H1 extraordinary income included a ¥38,040mn investment-securities sale gain; extraordinary losses included ¥15,159mn for the earthquake and ¥7,035mn in restructuring expenses.

Outlook and guidance

• FY2027 forecast: sales ¥1,220bn (+2.3%), operating loss ¥5bn, ordinary loss ¥13bn, net loss ¥40bn and EPS -¥346.90.

• Expected extraordinary items include a ¥38bn securities-sale gain, ¥3bn insurance proceeds, ¥24bn structure-improvement costs, ¥11bn disaster losses and ¥20bn earthquake losses.

• NDP is forecast to incur a ¥21bn operating loss from the tank collapse, including H1 ¥6.4bn and H2 ¥14.6bn impacts.

• Domestic volume assumptions include newsprint -13%, printing paper -10%, business communication paper -19% and containerboard +1%; key assumptions include ¥160/USD, coal at US$150/t and Dubai crude at US$100/bbl.

• FY2027 dividend forecast remained ¥15 per share: ¥5 interim and ¥10 year-end.