This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.
Japan Pulp & Paper Co., Ltd. (brand name OVOL) reported FY2025 (fiscal year ended March 31, 2026) consolidated revenue of ¥606,779 million (109.4% of the previous fiscal year), driven by the Non-Japan Wholesaling segment on the back of complementary M&As in Oceania and full-year contributions from German and French subsidiaries that joined the group in the previous fiscal year. However, ordinary profit fell to ¥10,887 million (68.8% of the previous fiscal year) mainly due to a delayed recovery in business performance at the German subsidiaries, foreign exchange losses, and deteriorating profitability in the woody biomass fuel business within the Raw Materials & Environment segment. Profit attributable to owners of the parent fell to ¥4,720 million (62.4%) on business restructuring expenses at consolidated subsidiaries outside Japan and goodwill impairment losses booked as extraordinary losses. For FY2026 the company forecasts a significant profit recovery, and it raised its annual dividend for a fifth consecutive fiscal year to ¥34 per share, with a further increase to ¥36 forecast for FY2026.
Consolidated Results (Full-Year Actual)
Revenue increased for the third consecutive fiscal year on business-scale expansion through the steady accumulation of M&As outside Japan. Gross profit rose to ¥105,442 million (115.3% of the previous fiscal year). Operating profit fell to ¥10,848 million (72.0%) and ordinary profit fell to ¥10,887 million (68.8%), which the company attributes to declining profitability at non-Japan subsidiaries in addition to a structural decline in demand for paper in key markets both within and outside Japan.
| Item (millions of yen) | FY2025 | FY2024 | Year-on-Year Comparison |
|---|---|---|---|
| Revenue | 606,779 | 554,524 | 109.4% |
| Gross Profit | 105,442 | 91,466 | 115.3% |
| Operating Profit | 10,848 | 15,071 | 72.0% |
| Ordinary Profit | 10,887 | 15,822 | 68.8% |
| Profit Attributable to Owners of Parent | 4,720 | 7,569 | 62.4% |

Segment Results
Revenue and ordinary profit remained steady in the Japan Wholesaling and Real Estate Leasing segments. Profit in the Paper Manufacturing & Processing segment increased thanks to higher sales prices in the recycled household paper business. Overall revenue maintained an upward trend, driven by growth in the Non-Japan Wholesaling segment; however, the Non-Japan Wholesaling segment swung to an ordinary loss and profitability also deteriorated in the Raw Materials & Environment segment, which pulled down consolidated ordinary profit. Non-Japan Wholesaling revenue grew to ¥338,078 million (122.7%) on the acquired French and German companies and complementary M&As in Oceania, but the segment posted an ordinary loss of ¥549 million as the German subsidiaries’ recovery was delayed and sales competition intensified in key markets amid foreign exchange losses. In Raw Materials & Environment, ordinary profit fell to ¥561 million (27.9%) on deteriorating profitability in the woody biomass power generation business and an impairment loss on non-current assets at an equity-method affiliate.
| Segment | Metric (millions of yen) | FY2025 | FY2024 |
|---|---|---|---|
| Japan Wholesaling | Revenue from External Customers | 193,118 | 200,627 |
| Japan Wholesaling | Ordinary Profit | 5,698 | 6,000 |
| Non-Japan Wholesaling | Revenue from External Customers | 338,078 | 275,488 |
| Non-Japan Wholesaling | Ordinary Profit | -549 | 3,195 |
| Paper Manufacturing & Processing | Revenue from External Customers | 51,409 | 51,597 |
| Paper Manufacturing & Processing | Ordinary Profit | 7,260 | 6,761 |
| Raw Materials & Environment | Revenue from External Customers | 20,044 | 22,650 |
| Raw Materials & Environment | Ordinary Profit | 561 | 2,012 |
| Real Estate Leasing | Revenue from External Customers | 4,130 | 4,161 |
| Real Estate Leasing | Ordinary Profit | 1,511 | 1,553 |
| Adjustments | Ordinary Profit | -3,595 | -3,698 |
| Total | Revenue from External Customers | 606,779 | 554,524 |
| Total | Ordinary Profit | 10,887 | 15,822 |

FY2026 Financial Results Forecast
The company forecasts significant profit increases for FY2026, driven by improved profitability in the Non-Japan Wholesaling and Raw Materials & Environment segments, while the Japan Wholesaling and Paper Manufacturing & Processing segments are expected to remain firm. The forecast assumes exchange rates of JPY 156.56 to USD 1, JPY 184.33 to EUR 1, JPY 211.43 to GBP 1 and JPY 104.82 to AUD 1 (as of December 31, 2025). The company also notes it is likely to be difficult to achieve the final-year targets of its Medium-term Business Plan 2026, due to a JPY 3.8 billion shortfall caused by a greater-than-expected decrease in demand and sluggish sales prices in the Non-Japan Wholesaling segment, as well as the impact of head office relocation expenses.
| Item (millions of yen) | FY2026 Forecast | FY2025 (Actual) | Year-on-Year Comparison |
|---|---|---|---|
| Operating Profit | 15,500 | 10,848 | 142.9% |
| Ordinary Profit | 15,000 | 10,887 | 137.8% |
| Profit Attributable to Owners of Parent | 8,000 | 4,720 | 169.5% |
| Segment (ordinary profit, millions of yen) | FY2025 Results | FY2026 Forecast | Year-on-Year Comparison | Medium-term Business Plan 2026 Final Year Plan |
|---|---|---|---|---|
| Japan Wholesaling | 5,698 | 6,000 | 105.3% | 7,000 |
| Non-Japan Wholesaling | -549 | 4,200 | – | 8,000 |
| Paper Manufacturing & Processing | 7,260 | 7,800 | 107.4% | 7,500 |
| Raw Materials & Environment | 561 | 1,500 | 267.4% | 2,000 |
| Real Estate Leasing | 1,511 | 1,300 | 86.0% | 1,500 |
| Adjustments | -3,595 | -5,800 | -4,000 | |
| Consolidated Ordinary Profit | 10,887 | 15,000 | 137.8% | 22,000 |

Shareholder Returns
The company increased its annual dividend for a fifth consecutive fiscal year in FY2025, to ¥34 per share (¥14 interim, ¥20 year-end), against a consolidated payout ratio of 86.1% and a consolidated dividend on equity (DOE) ratio of 3.1%. For FY2026 it forecasts a further increase to ¥36 per share (¥18 interim, ¥18 year-end), implying a payout ratio of 49.5%. The company revised its dividend policy to progressive dividends with a consolidated payout ratio of 30% or more and a consolidated DOE ratio of 3% or more, effective from the FY2025 year-end dividend. On capital returns, the company retired 30,000,000 shares of treasury stock (19.97% of total shares issued prior to the retirement) on November 28, 2025, and disclosed on February 9, 2026 a treasury share buyback program for up to 5,000,000 shares (4.3% of shares outstanding excluding treasury shares) for a maximum total cost of ¥5,500,000,000, to run from February 10, 2026 to August 7, 2026; as of April 30, 2026 the company had acquired 3,451,400 shares for a total cost of ¥3,757,595,400 under this program. Cross-shareholdings continued to be reduced, with the balance-sheet amount falling to ¥22,228 million (15.8% of consolidated net assets) at the end of FY2025 from ¥25,530 million (17.5%) a year earlier.
| Fiscal Year | Interim Dividend | Year-end Dividend | Total Dividend | Payout Ratio |
|---|---|---|---|---|
| FY2023 | 6.5 yen | 6.5 yen | 13 yen | 16.5% |
| FY2024 | 12.5 yen | 12.5 yen | 25 yen | 40.7% |
| FY2025 | 14 yen | 20 yen | 34 yen | 86.1% |
| FY2026 (Forecast) | 18 yen | 18 yen | 36 yen | 49.5% |

OVOL Medium-term Business Plan 2026
The company positions its results within the OVOL Medium-term Business Plan 2026, part of its longer-term OVOL Vision 2030 (“Paper, and beyond”). The plan’s fundamental principles include fully utilizing M&As to rapidly expand the business in new and existing markets outside Japan; the presentation notes that these overseas M&As, including the German and French subsidiaries and the complementary acquisitions in Oceania, are regarded as essential strategic investments toward realizing OVOL Vision 2030, even though profitability at the German subsidiaries has not yet recovered as planned. As noted above, the company expects to fall JPY 3.8 billion short of the plan’s FY2026 final-year consolidated ordinary profit target of ¥22,000 million and states it will work to further expand earnings across all segments to achieve OVOL Vision 2030.
This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.
