Oji Holdings Swings to Q1 Profit on Currency Gains as Printing Paper Losses Widen

The swing is a currency story, not an operating one

Oji Holdings Corporation (TSE: 3861), Japan's largest paper and packaging group, published consolidated results for the three months to June 30, 2026 on August 5, 2026 under Japanese GAAP. Net sales rose 2.4% to ¥468,508 million and operating profit 4.8% to ¥3,881 million, leaving the operating margin at a thin 0.8%. Below the operating line the picture changes: ordinary profit swung to a ¥5,629 million profit from a ¥3,554 million loss and net profit to a ¥3,162 million profit from a ¥5,157 million loss, for earnings per share of ¥3.68 against a ¥5.57 loss.

The company is explicit about the cause. Ordinary profit improved because of foreign-exchange gains arising on the revaluation of foreign-currency denominated receivables and payables. That is a translation effect on the balance sheet, not a change in trading, and it is worth separating from the ¥178 million of genuine operating improvement the quarter delivered.

Revenue growth came from three named sources: price revisions in the domestic containerboard business, the contribution of AustroCel Hallein, acquired last financial year, and a weaker yen on translation of overseas subsidiaries. By geography, domestic sales were ¥276.3 billion against ¥262.8 billion and overseas ¥192.2 billion against ¥194.6 billion; domestic operating profit was ¥4.8 billion against ¥4.2 billion while overseas remained a ¥0.9 billion loss, against ¥0.5 billion a year earlier.

Two segments up sharply, printing paper deepening its loss

Household & Industrial Materials, the largest segment, grew external revenue 3.4% to ¥219,174 million while its profit jumped from ¥228 million to ¥5,831 million — the corrugated price revisions landing on a near-zero base. Functional Materials lifted revenue 2.1% to ¥55,242 million and profit 41.8% to ¥4,021 million.

Against that, Forest Resources & Environment grew revenue 1.7% to ¥85,952 million but saw profit fall 32.4% to ¥1,595 million, and Printing & Communications Media lost ground on both lines: revenue down 10.7% to ¥47,946 million and the segment loss widening from ¥254 million to ¥3,303 million. That is a structural decline the group is managing rather than reversing — it closed the paperboard converting plant of subsidiary Oji Fibre Solutions in June 2026, having exited the containerboard business and sold its Australian packaging operations in the prior year.

A hundred million shares cancelled, and a guidance shape that needs reading carefully

Total assets rose 1.5% from the March year-end to ¥2,727,262 million while net assets fell 1.5% to ¥1,119,876 million, taking the equity ratio down to 39.8% from 41.0%. Behind that sits a capital action: the company cancelled 100 million treasury shares, cutting shares issued from 1,014.4 million to 914.4 million and treasury shares from 137.7 million to 65.1 million. Book value per share still rose, to ¥1,276.80 from ¥1,257.44.

Guidance is unchanged: net sales of ¥1,940,000 million (+4.2%), operating profit of ¥60,000 million (+73.5%), ordinary profit of ¥45,000 million (+11.0%) and net profit of ¥35,000 million (−37.0%), for earnings per share of ¥38.47. The combination is unusual and worth stating plainly: operating profit is guided to rise sharply while net profit is guided to fall by more than a third, which points to prior-year items below the operating line rather than to trading. The quarter has delivered only 6.5% of that full-year operating-profit target, though the first quarter is seasonally the group's weakest. Longer term, its Mid-term Management Plan 2027 targets ¥120 billion of operating profit, ¥80 billion of net profit and an 8% return on equity by FY2027. The annual dividend is held at ¥36.00, split ¥18.00 interim and ¥18.00 final.

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.