Interim report
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Note : This document has been translated from the Japanese original for reference purposes only . In the event of any discrepancy between this translated document and the Japanese original , the original shall prevail . Company name : URL : Representative : Contact : Phone : Summary of Consolidated Financial Results for the First Quarter of the Year Ending March 2027 ( unaudited ) August 6 , 2026 Mitsubishi Paper Mills Limited ( Code No.3864 Tokyo Stock Exchange ) https://www.mpm.co.jp/ Ryuichi Kisaka , President and Chief Executive Officer Daisuke Yamada , General Manager , Strategy Planning Division + 81-3-5600-1488 ( Amounts of less than one million yen are rounded down . ) 1. Results for the First Quarter of the Year Ending March 31 , 2027 ( April 1 , 2026 - June 30 , 2026 ) ( 1 ) Consolidated Operating Results First Quarter of FY2026 First Quarter of FY2025 Note : Comprehensive income First Quarter of FY2026 First Quarter of FY2025 First Quarter of FY2026 ( % indicates changes from the previous corresponding period . ) Profit attributable to owners of parent Ordinary profit % Millions of yen Net sales Operating profit Millions of yen % Millions of yen 38,620 ( 2.1 ) 393 39,461 ( 12.3 ) ( 1,221 ) Profit per share ¥ 1,037 million ¥ ( 2,225 ) million Diluted profit per share Yen 49.29 ( 30.04 ) Yen - First Quarter of FY2025 ( 2 ) Consolidated Financial Condition 611 ( 1,093 ) % Millions of yen 2,159 ( 1,316 ) % Total assets Net assets Shareholders ' equity ratio Millions of yen Millions of yen % First Quarter of FY2026 Year ended March 2026 Note : Shareholders ' equity 224,564 222,776 103,566 103,185 46.1 46.3 First Quarter of FY2026 FY2025 ¥ 103,534 million ¥ 103,154 million 2. Dividends FY2025 FY2026 FY2026 ( Forecast ) End of 1Q Yen End of 2Q Yen Dividend per share End of 3Q Yen 0.00 End of FY Yen 15.00 Annual Yen 15.00 7.00 13.00 20.00 Note : Revision to the forecast for dividends announced most recently . None 3. Consolidated Financial Results Forecast for the Fiscal Year Ending March 31 , 2027 ( April 1 , 2026 to March 31 , 2027 ) ( % indicates changes from the previous corresponding period . ) Profit attributable to owners of parent Net sales Operating income Ordinary income Earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen First half Full year 85,000 7.6 175,000 11.1 1,000 6,000 6,000 1,000 176.1 248.8 2,500 6,500 242.0 57.04 148.31 Note : Revision to the financial results forecast announced most recently ... None
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* Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: None The earnings forecasts and other forward-looking statements herein are based on information currently acquired by the Company and certain assumptions assessed to be reasonable. Actual results may differ significantly from these forecasts due to a wide range of factors. Excluded: - (Company name); 4. Notes None(1) Significant changes in the scope of consolidation during the period: None First Quarter of FY2026 Newly included: - (Company name); 893,221 shares 3) Average number of shares during the period: * Explanation of the proper use of financial results forecast and other notes FY2025 933,254 shares 4) Retrospective restatement: None 1) Total number of issued shares at the end of the period (including treasury shares): (3) Changes in accounting policies, changes in accounting estimates and retrospective restatement 2) Changes in accounting policies other than 1) above: None First Quarter of FY2026 (2) Accounting policies adopted specially for the preparation of quarterly consolidated financial statements: None FY2025 44,741,433 shares 2) Total number of treasury shares at the end of the period: First Quarter of FY2026 First Quarter of FY2025 43,817,981 shares 43,838,007 shares Notes： The Company has adopted a BIP (Board Incentive Plan) trust, assuming the number of shares held by the trust are included in the number of treasury stock of “(4) Total number of issued shares (common shares)”. 44,741,433 shares 1) Changes in accounting policies due to the revision of accounting standards: (4) Total number of issued shares (common shares) 3) Changes in accounting estimates: None
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C ontents of Attachments 1. Qualitative Information on Quarterly Financial Results for the Period under Review ................................................. 2 (1) Explanation of Operations Results ......................................................................................................................... 2 (2) Explanation of Financial Position........................................................................................................................... 5 (3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information ....................... 5 2. Consolidated Financial Statements and Primary Notes ................................................................................................ 6 (1) Consolidated Balance Sheets .................................................................................................................................. 6 (2) Consolidated Statements of Income and Comprehensive Income .......................................................................... 8 ― 1 ―
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1. Qualitative Information on Financial Results for the Period under Review (1) Explanation of Operations Results During the three months ended June 30, 2026, the Japanese economy as a whole experienced a gradual recovery, driven by improvements in corporate profits as well as employment and income conditions. At the same time, the prices of raw materials and fuels have been affected by rising prices, the fluctuation of interest and exchange rates, and ongoing geopolitical risks, such as the situation in the Middle East. As a result, the economic outlook remains uncertain. Under these circumstances, the Group is implementing its Medium-term Management Plan (fiscal year ended March 2026 to fiscal year ending March 2028). The basic policy of the plan is “130 years as a ‘SHINKA’ company and ever evolving.” The following provides a basic policy of the Medium-term Management Plan and the Group’s initiatives to enhance its corporate value. 1) SHINKA (sophistication) of technologies and research to expand our array of distinctive functional and environmentally friendly products and accelerate the enhancement of productivity. The Group is utilizing its technologies and research and development capabilities to enhance added value and drive sales through the global expansion of the functional materials business, which is a growth business. The Group is increasing its sales of environmentally friendly products and improving productivity in the sustainable fiber materials business. The Group is generating synergies between both businesses in the areas of marketing and technology to expand them. In April 2026, the Company moved its nonwoven fabric development division from the former Takasago R&D Center to the Takasago Mill. This relocation has allowed the Company to establish an integrated system that connects development and manufacturing. The goal is to enhance research and development capabilities, accelerate product development, and boost sales and profits at an early stage. The former Kyoto R&D Center has been renamed the Advanced Technology Center. This center will develop innovative products beyond those produced at the Kyoto Mill. In September 2026, the center will relocate to a renovated research facility at the Kyoto Mill and will be further enhanced as a hub of innovation. In its functional materials business, the Group aims to boost sales and improve profitability, and to establish itself as a leader in functional materials, which include base materials for water treatment membrane support substrates, separators for energy storage devices, tape base paper, and filters. The Group is taking steps to achieve these goals, including focusing investments on growth areas and enhancing production efficiency at the Takasago, Kyoto, and Fuji Mills. In May 2026, at our core Takasago Mill, we launched the “Beyond” next-generation transformation project. We are considering and implementing specific initiatives to transform this mill into a global core plant that leverages its unique technological capabilities. Mitsubishi HiTec Paper Europe GmbH, a consolidated subsidiary in Germany, will enhance its earnings base as the impact of the structural reforms implemented in the previous fiscal year, including a voluntary retirement program, becomes evident. In the sustainable fiber materials business, the Group focuses on high-efficiency production machinery and is consolidating administrative divisions at the Hachinohe and Kitakami mills to reduce costs and improve production efficiency. At the Hachinohe Mill, the Reborn60 Hachinohe project, a Hachinohe Mill remodeling plan, is being implemented. The mill is carefully considering strategic investments to enhance its competitiveness, along with investments to address aging and ensure business continuity, implemented in a step-wise fashion. An earthquake that occurred off the coast of Iwate Prefecture on June 25, 2026 registered an intensity of 6-minus on the Japanese seismic scale of zero to seven in Hachinohe, Aomori Prefecture. At the Hachinohe Mill, some equipment was damaged, which affected production. However, there were no injuries or environmental effects, and operations resumed after safety checks were completed. 2) SHINKA (evolution) in our contributions to the global environment The Group is accelerating initiatives aimed at achieving carbon neutrality. This includes improving fossil fuel energy intensity and driving a green transformation. The Group is also contributing to creating a recycling-oriented society by utilizing forestry resources, increasing the recycling rate of plastic resources, expanding operations that help achieve the SDGs, and pursuing initiatives to address the climate change risks. The Murabi Forest, which is owned by the Company, has been designated a Nature Symbiosis Site by the Ministry of the Environment, Ministry of Agriculture, Forestry and Fisheries, and Ministry of Land, Infrastructure, Transport and Tourism, under the new Act on the Promotion of Activities for Biodiversity Enhancement. The Group is committed to creating environmental value through various activities, including the maintenance and conservation of biodiversity, and contributing to the development of a sustainable global environment in line with the Mitsubishi Paper Mills Environmental Charter. ― 2 ―
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(Functional materials business) In domestic operations, within the functional materials-related product segment, sales of separators for energy storage devices increased year on year, while capacitor sales, where the Group is focusing its sales expansion efforts, also exceeded the previous year’s level due to the capture of overseas demand. Sales of water treatment membrane support substrates increased from the previous fiscal year, despite intensifying competition in the Chinese market, due to proactive sales activities. The sales value of total heat exchange elements remained flat year on year, reflecting strong sales in the United States. The sales value of nonwoven fabric for building materials, decorative laminate base paper, and tape base paper increased from the previous year due to price revisions intended to offset rising raw material costs. In the communication paper-related product segment, the sales value of thermal paper and copy paper remained flat from the previous year. Sales of carbonless paper were lower than the previous year in both volume and monetary terms. The sales value of rewritable media remained stable from the previous year, reflecting a recovery in overseas demand and a decline in domestic demand. In the imaging-related product segment, sales value declined year on year following increased sales in Europe in the previous year. The Group’s business in Germany was affected by rising gas prices due to the situation in the Middle East. However, profits improved thanks to business restructuring initiatives implemented in the previous fiscal year. Sales declined from the previous year in both volume and monetary terms due to sluggish markets in Europe and neighboring countries. As a result, the functional materials business posted lower sales but higher profits. In domestic operations, the “Beyond” next-generation transformation project has commenced at the Takasago Mill this fiscal year. The project focuses on increasing market share of functional materials-related products and launching new sustainable products. The Group will integrate development, production, and sales, transforming its business portfolio to focus on growth areas. The Group will specifically focus on separators for power storage devices and water treatment membrane support substrates. We plan to invest in capital expenditures, increase our sales and development personnel, and establish a flexible staffing system in these growth areas. Through these initiatives, we aim to expand our global market share and expedite the launch of new products. The Group is focusing on increasing sales in the separator for power storage device segment by capturing strong demand for auxiliary power and automotive electrical applications. Recently, the Group has also focused on boosting sales of separators for information-processing facilities, especially for AI servers. In the water treatment membrane support substrate segment, the Group intends to launch sustainable products for seawater desalination applications. Additionally, the Group will focus on selling sustainable products, including total heat exchanger elements, and super heat-resistant glass fiber nonwoven fabric products, which are new offerings. In the tape base paper segment, the Group aims to boost sales in overseas markets, where growth is expected. The Group plans to create a flexible production system while considering capital expenditures. In the decorative laminate base paper segment, the Group is working to stabilize earnings by improving production efficiency at the Fuji Mill. The consolidation and elimination of brands is also being considered. In the communication paper-related product segment, the Group prioritizes price revisions to offset rising raw material costs. In the Takasago Mill project, the Group aims to restructure its production lines to enhance efficiency in producing thermal paper and carbonless paper, thereby improving cost competitiveness. In the copy paper segment, the Group will focus on increasing sales to major mail-order businesses and enhancing cost efficiency. In the imaging-related product segment, the Group aims to enhance production efficiency at the Kyoto Mill and its associated facilities to maintain or strengthen its competitiveness. The Group plans to enhance sales in emerging countries in Asia and in Europe and Africa. Additionally, the Group aims to increase exports of products designed for large posters and labels, industrial inkjet printing, and items that utilize sublimation transfer technology to the United States. In overseas operations in Germany, the Group will first revise prices to address rising raw material costs. Additionally, the Group will focus on increasing sales outside of Europe by strengthening sales capabilities and optimizing production efficiency, which includes brand integration, to improve profitability. The Group will increase sales of domestically manufactured functional material-related products, focusing on items such as water treatment membrane support substrates and tape base paper, by utilizing its overseas bases in the U.S. and Germany. (Sustainable fiber materials business) In the printing paper segment, sales declined in both volume and monetary terms from the previous fiscal year due to weaker domestic demand and the impact of the situation in the Middle East on raw materials and energy procurement. In the wrapping paper market, the Group increased sales of bleached kraft paper, especially in Japan, and expanded overseas sales ― 4 ―
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channels. Consequently, both sales volume and value exceeded the previous year. Domestic sales of commercial pulp were adversely affected by imported pulp as prices fell in foreign markets. However, the Group recently began exporting softwood pulp, resulting in increased exports. Both sales volume and value rose compared to the previous year. Regular repairs at the Hachinohe Mill, which are conducted in June each year, will take place in November starting this fiscal year. As a result, the sustainable fiber materials business posted higher sales and improved profits. In the sustainable fiber materials business, the Group will offset the declining domestic demand for printing paper with exports, while maintaining sales volume by expanding wrapping paper and commercial pulp. The Group aims to improve profitability by improving production efficiency and reducing costs. In the printing paper segment, the Group aims to optimize its production system and inventory levels while responding quickly to domestic and international supply and demand trends. The Group will appropriately adjust product prices to reflect rising raw material and energy costs resulting from the situation in the Middle East. In wrapping paper, the Group plans to capture demand for reduced-or-zero plastic products, which is being driven by the growing awareness of the need for society to be sustainable, and the Group will seek to increase sales of distinctive products that meet customers’ needs. Meanwhile, the Group aims to develop emerging markets in Asia that have significant growth potential. The Group will focus on expanding sales of high value-added products to achieve the continued growth of business by leveraging the main feature of the pulp produced at the Kitakami Mill: pulp made exclusively from materials sourced in Japan. The Group will integrate operations at the Hachinohe and Kitakami Mills and share personnel to pursue production efficiency and the reduction of costs. The Group is implementing the Reborn60 Hachinohe project, a Hachinohe Mill remodeling plan, which was announced in December 2025. In this project, the Group will invest 25 billion yen by fiscal year 2030 to transform the Hachinohe Mill into a “next-generation sustainable factory” and a “world-leading competitive paper material production base.” (Engineering business) Net sales stood at 838 million yen (down 45.8% year on year), reflecting a decrease in external construction sales at construction subsidiaries. Operating profit came to 27 million yen (down 34.5% year on year). (2) Explanation of Financial Position Assets at the end of the first three months under review amounted to 224,564 million yen, up 1,787 million yen from the end of the previous fiscal year, mainly due to an increase in deferred tax assets. Liabilities came to 120,998 million yen, up 1,407 million yen from the end of the previous fiscal year, attributable to increases in interest-bearing debt and income taxes payable. Net assets increased 380 million yen from the end of the previous fiscal year, to 103,566 million yen, mainly due to the posting of a profit attributable to owners of parent, partially offset by a decrease in remeasurements of defined benefit plans. The equity ratio was 46.1%, down 0.2 percentage points from the end of the previous fiscal year. (3) Explanation of Consolidated Financial Results Forecast and Other Forward-looking Information Consolidated results forecasts for the fiscal year ending March 31, 2027 remain unchanged from the same forecasts announced on May 14, 2026. ― 5 ―