Rengo Co., Ltd. (TSE: 3941), Japan's largest manufacturer of paperboard and corrugated packaging — containerboard, boxes, flexible packaging and heavy-duty packaging, alongside a growing overseas footprint — posted record full-year revenue for FY2026 (April 2025 – March 2026) on May 14, 2026. Consolidated revenue rose 1.5% year-on-year to ¥1,008,337 million, crossing the ¥1 trillion threshold for the first time in the company's history. Operating profit, however, edged down 0.9% to ¥37,090 million, and ordinary profit fell 4.5% to ¥37,419 million. Profit attributable to owners of the parent dropped 27.5% to ¥21,005 million from ¥28,979 million the prior year. Earnings per share came in at ¥84.70, down from ¥116.94, while return on equity eased to 4.4%.
What pressured profit despite record revenue
The headline disconnect — record top line, sharply lower bottom line — reflects two forces. At the operating level, margins narrowed slightly as input, energy and logistics costs rose faster than Rengo could pass through in price, leaving operating profit broadly flat despite the higher volume base. Below the operating line, the decline steepened: ordinary profit fell 4.5% as non-operating items contributed less than a year earlier, and net profit fell a far steeper 27.5% as the prior year's larger extraordinary gains did not recur and the effective tax burden weighed on the result. Comprehensive income fell 23.2% to ¥36,707 million, while equity-method investment income contributed ¥1,306 million. In short, the profit drop is driven by the absence of one-off items rather than a deterioration in the core packaging business, whose revenue continued to grow.
Balance sheet expands; operating cash flow holds firm
Total consolidated assets expanded to ¥1,313,086 million from ¥1,243,116 million a year earlier, while net assets rose to ¥528,554 million from ¥500,244 million. The equity ratio stood at 37.3%, and net assets per share reached ¥1,972.64. Cash generation remained solid: operating cash flow was ¥78,164 million (up from ¥77,008 million), comfortably funding investing outflows of -¥70,739 million as Rengo continued to invest in capacity and overseas operations. Financing activities provided ¥8,769 million, and period-end cash and equivalents stood at ¥89,388 million. The combination of steady operating cash flow and disciplined investment underpins the higher payout described below.
Dividend raised to ¥40; FY2027 guided for a strong rebound
Rengo raised its annual dividend to ¥40 per share for FY2026 (¥20 interim + ¥20 year-end), up from ¥30 the prior year, with total dividends of approximately ¥9,982 million and a payout ratio of 47.2%. For FY2027 (ending March 2027), management guided for a sharp profit recovery: revenue of ¥1,090,000 million (+8.1%), operating profit of ¥46,000 million (+24.0%), ordinary profit of ¥44,000 million (+17.6%), and net profit of ¥31,000 million (+47.6%), equivalent to EPS of ¥124.98. The company also forecast a higher annual dividend of ¥50 per share (¥25 interim + ¥25 year-end), signalling confidence that the FY2026 profit dip is transitory and that margin recovery and volume growth will drive earnings well above FY2026 levels.
| Metric | FY2026 | FY2025 | YoY |
|---|---|---|---|
| Revenue (¥ million) | 1,008,337 | 993,251 | +1.5% |
| Operating profit (¥ million) | 37,090 | 37,408 | −0.9% |
| Ordinary profit (¥ million) | 37,419 | 39,178 | −4.5% |
| Net profit attrib. to owners (¥ million) | 21,005 | 28,979 | −27.5% |
| EPS (¥) | 84.70 | 116.94 | −27.6% |
| ROE | 4.4% | 6.3% | −1.9pp |
| Total assets (¥ million) | 1,313,086 | 1,243,116 | +5.6% |
| Equity ratio | 37.3% | 37.7% | −0.4pp |
| Operating cash flow (¥ million) | 78,164 | 77,008 | +1.5% |
| Annual dividend (¥) | 40 | 30 | +33.3% |
| FY2027 guidance — revenue (¥ million) | 1,090,000 | — | +8.1% |
| FY2027 guidance — operating profit (¥ million) | 46,000 | — | +24.0% |
| FY2027 guidance — net profit (¥ million) | 31,000 | — | +47.6% |
| FY2027 guidance — EPS (¥) | 124.98 | — | — |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.