Daio Paper Returns to Profit in FY2026 as Operating Profit Surges 145% to ¥24bn

Daio Paper Corporation (TSE: 3880), one of Japan's major integrated paper-and-pulp makers and the company behind the "Elleair" household-paper brand, reported a sharp earnings recovery for its full year ended March 2026 on May 15, 2026. Consolidated revenue was essentially flat, slipping 0.3% to ¥666,770 million, but the profit lines turned decisively: operating profit jumped 145.0% to ¥24,032 million, ordinary profit soared 371.0% to ¥21,339 million, and the company returned to a net profit of ¥8,886 million, reversing a ¥11,197 million loss the prior year. Earnings per share swung to ¥53.73 from −¥67.29.

The turnaround was driven by a combination of price revisions on its products, sustained cost-reduction efforts and the absence of the prior year's one-off losses, which had pushed the company into the red. Return on equity recovered to 3.8% and the operating margin widened to 3.6%, restoring the group to clear profitability after a difficult year. Operating cash flow was robust at ¥57,304 million, underscoring the strength of the underlying cash generation behind the headline recovery.

Price revisions and cost cuts power the recovery

Daio Paper is one of Japan's leading integrated paper-and-pulp manufacturers, producing paperboard, packaging materials and household and hygiene paper. Its consumer-facing "Elleair" brand spans tissues, kitchen towels and diapers, anchoring a portfolio that ranges from industrial-grade paperboard to everyday hygiene products. During the year the company divested its Turkish subsidiary, Elleair International Turkey, removing it from the scope of consolidation and streamlining its international footprint. Management attributed the profit rebound primarily to price revisions that restored margins eroded by earlier input-cost inflation, alongside ongoing cost reductions across its manufacturing base — and to the clean comparison against a prior year weighed down by one-off charges.

Dividend held at ¥14; FY2027 outlook calls for steady profit

Daio Paper maintained its annual dividend at ¥14.00 per share (¥7 interim + ¥7 year-end), a payout ratio of 26.1%, and guided for the same ¥14.00 dividend in the year ending March 2027. For FY3/2027 the company forecasts revenue of ¥680,000 million (+2.0%) and operating profit broadly flat at ¥24,000 million (−0.1%), while net profit is guided 35.0% higher to ¥12,000 million, equivalent to EPS of ¥77.81. Notably, ordinary profit is guided 20.3% lower to ¥17,000 million, reflecting expectations of higher financing and other non-operating costs even as operating profit holds steady — a reminder that the group's below-the-line items remain a swing factor for reported earnings.

Balance sheet anchored by ¥854bn asset base

The group's balance sheet reflects its capital-intensive manufacturing footprint. Total assets stood at ¥853,930 million at year-end, with net assets of ¥242,757 million and an equity ratio of 26.6% — a structure typical of an integrated paper producer carrying significant fixed plant and working capital. Book value per share was ¥1,471.37. With strong operating cash flow restored and profitability re-established, the year marks a return to a more stable financial footing for the household-paper and paperboard maker after the prior-year setback.

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.