Mitsubishi Paper Mills (3864) Q4 2026 earnings summary

Executive summary

• FY2025 net sales declined 10.5% to ¥157.5 billion, operating profit dropped 94.2% to ¥0.3 billion, and profit attributable to owners of parent fell 56.2% to ¥1.9 billion, mainly due to earthquake impacts, equipment failures, and weak European demand.

• Profit attributable to owners of parent exceeded forecasts due to gains from sale of cross-shareholdings.

• The company implemented a new Medium-term Management Plan focused on technological sophistication, environmental initiatives, and governance reforms.

• Structural reforms included business restructuring in Germany, equipment consolidation, and the launch of major transformation projects at key mills.

• FY2026 is forecast to see significant recovery in sales and profits, driven by structural reforms and operational stabilization.

Financial highlights

• FY2025 net sales: ¥157.5 billion, down ¥18.4 billion year-over-year; operating profit: ¥0.3 billion, down ¥4.3 billion; profit attributable to owners of parent: ¥1.9 billion, down ¥2.4 billion.

• Gross profit fell to ¥20.2 billion from ¥25.2 billion year-over-year.

• Ordinary profit decreased 62.2% to ¥1.72 billion.

• Comprehensive income rebounded to ¥18.63 billion from a loss of ¥5.24 billion, mainly due to remeasurements of defined benefit plans.

• FY2026 forecast: net sales ¥175.0 billion (+¥17.5 billion YoY), operating profit ¥6.0 billion (+¥5.7 billion YoY), profit attributable to owners of parent ¥6.5 billion (+¥4.6 billion YoY).

Outlook and guidance

• FY2026 expects growth from expanded functional materials sales, German business reforms, and Hachinohe Mill stabilization.

• FY2027 forecast: net sales of ¥175.0 billion (+11.1%), operating profit of ¥6.0 billion, ordinary profit of ¥6.0 billion, and profit attributable to owners of parent of ¥6.5 billion.

• Raw material and fuel prices are expected to rise due to Middle East instability.

• Annual dividend forecast to increase to ¥20 per share in FY2026.