Fiscal Year Ending March 2027 Second Quarter (Interim) Financial Summary [Japanese GAAP] (Consolidated)

Business Performance Overview

Net sales for the interim period were 13,456 million yen, a slight increase year-on-year, but operating income, ordinary income and net income declined significantly. External factors such as higher raw material costs and increased logistics expenses impacted results; despite implementing price revisions, a decline in gross margin and increased depreciation from capital investment became burdens. By segment, the Paper Products segment recorded net sales of 6,821 million yen and operating income of 291 million yen; the Chemical Products segment recorded net sales of 3,064 million yen and operating income of 82 million yen, where strategic price pass-through contributed; the Other Businesses segment reported net sales of 3,571 million yen and operating income of 129 million yen, showing improvement. Interim cash flow turned negative, and cash flow from financing activities increased, resulting in a net increase in borrowings.

Outlook and Capital Structure

The full-year earnings forecast has been revised from the initial outlook. Forecasts are net sales of 29,000 million yen, operating income of 550 million yen, ordinary income of 590 million yen, net income attributable to owners of parent of 460 million yen, and earnings per share of 309.49 yen. The revision reflects interim results, and continued appropriate price pass-through for raw material and logistics cost increases and cost reduction measures are key. While the equity ratio is 38.8% and there is room for improvement, attention is needed on how to optimize the capital structure after deducting cash balances.