Dynapac Co.,Ltd. Full-Year Earnings Flash
Operating income surged +68.1%, driven by Vietnam M&A and price revisions, with profitability approaching mid-term plan targets
Key Positives From The Results
Operating income reached JPY 2.88B (+68.1% YoY), approaching the mid-term plan's final-year target of JPY 3.0B. Gross profit margin improved to 20.4% (+1.5pt YoY), with productivity gains and price pass-throughs functioning as dual growth drivers.
- Revenueof JPY 67.08B (+7.3% YoY), marking the fifth consecutive year of top-line growth. Domestic processed food segment volumes came in at 100.5% YoY, outperforming the broader industry (99.3% YoY)
- OPMexpanded to 4.3% (+1.6pt YoY), hitting the mid-term plan target of 4.3% one year ahead of schedule. Productivity improvements and product price revisions absorbed rising labor and transportation costs
- Vietnam Revenueof JPY 12.23B (+29.4% YoY). Contribution from the TKT and Hoang Hai acquisitions kicked in, with the overseas growth engine now fully operational
- Operating CFrecovered to JPY 5.23B (vs. JPY 1.07B in the prior year), driven by pre-tax profit expansion and improved working capital management
- DPSof JPY 80 (+JPY 10 YoY), with a payout ratio of 25.0%. This marks the third consecutive year of dividend increases
Key Concerns From The Results
Equity ratio declined to 55.2% (−4.5pt YoY) as bridge financing for M&A activity drove short-term borrowings up sharply to JPY 6.77B (+90.5% YoY). Goodwill has accumulated to JPY 4.94B, warranting close attention to future impairment risk.
- Net Incomeof JPY 3.17B (+6.6% YoY), with earnings growth significantly lagging operating income expansion. The primary driver was the lapping of JPY 1.96B in gains on fixed asset sales in the prior year, highlighting the need to move away from reliance on extraordinary gains
- Next-FY Guidancecalls for net income of JPY 2.5B (−21.3% YoY), reflecting a decline. The drop stems from the non-recurrence of gains on sales of investment securities
- Comprehensive Incomeof JPY 2.22B (−38.8% YoY). Unrealized gains on available-for-sale securities fell JPY 0.9B, and foreign currency translation adjustments declined JPY 0.31B, compressing latent gains
- Southeast Asia (ex-Vietnam) Revenueof JPY 1.9B (−7.1% YoY), as geopolitical risks and the China economic slowdown weighed on results
- Investing CFof −JPY 5.75B, primarily driven by −JPY 5.95B in subsidiary share acquisitions, underscoring the need to monitor the investment payback cycle
Focus Areas / Items To Monitor Going Forward
- Achievability of mid-term plan final-year targets (FY12/2026) of JPY 73.0B in revenue and JPY 3.1B in operating income. Scrutinizing the breakdown between full consolidation contributions from Hoang Hai and Marunaka Shiko versus organic growth is key
- Progress on integration synergies across the three Vietnam entities (TKT / Hoang Hai / Hanoi operations). Whether profit contribution justifies the goodwill amortization burden of JPY 4.94B (over JPY 300M annually)
- Refinancing strategy for JPY 6.77B in short-term borrowings. Specific timeline for balance sheet improvement through terming out interest-bearing debt and reducing cross-shareholdings
- Post-acquisition PMI progress and quantifiable synergies for Hoang Hai and Marunaka Shiko, respectively
- Concrete plans for business restructuring and functional allocation across the three Vietnam sites
- Medium- to long-term sales strategy to counter the domestic corrugated market volume decline trend (industry at 99.3% YoY)
- Reduction plan and expected disposal pace for cross-shareholdings (investment securities of JPY 19.31B)
- Timeline for converting JPY 6.77B in short-term borrowings to long-term debt
- Degree of conservatism embedded in next-FY net income guidance (−21.3% YoY) and upside potential
- Sustainability of flexible packaging revenue growth at JPY 8.07B (+30.3% YoY) and breakdown of TKT contribution
- Revenue inflection timeline and investment payback plan for the digital printing business
- Policy on continued share buybacks (JPY 500M this fiscal year) and total shareholder return ratio targets
- Earnings sensitivity to FX fluctuations (VND/JPY, etc.) and hedging policy
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Revenue | JPY 67,083M | +7.3% |
| └ Cost of Goods Sold | JPY 53,383M | +5.3% |
| └ Gross Profit | JPY 13,699M | +15.7% |
| Gross Profit Margin | 20.4% | +1.5pt YoY |
| SG&A | JPY 10,817M | +6.8% |
| Operating Income | JPY 2,881M | +68.1% |
| Operating Income Margin | 4.3% | +1.6pt YoY |
| Recurring Profit | JPY 3,557M | +44.1% |
| Net Income Before Tax | JPY 4,954M | +11.4% |
| Net Income Attributable to Owners of Parent Company | JPY 3,178M | +6.6% |
| EPS | JPY 320.18 | +6.8% |
| BPS | JPY 4,805.56 | +4.3% |
| ROE | 6.9% | +0.2pt YoY |
| Operating CF | JPY 5,232M | +387.1% |
| Investing CF | −JPY 5,756M | - |
| Financing CF | +JPY 1,909M | - |
Performance By Business Segment
- Flexible Packaging: Revenue +30.3% YoY, primarily driven by the full-year consolidation of TKT (Vietnam plastic packaging)
- Vietnam Region: Revenue +29.4% YoY, supported by capacity expansion through TKT and Hoang Hai acquisitions and a recovery in local sales
- Domestic Processed Food Segment: Sales volumes at 100.5% YoY, gaining market share despite the broader industry contracting to 99.3% YoY
- Southeast Asia (ex-Vietnam): Revenue −7.1% YoY, impacted by geopolitical risks and the China economic slowdown
Changes To Guidance
New guidance for FY12/2026 calls for revenue of JPY 73,000M (+8.8% YoY), operating income of JPY 3,100M (+7.6% YoY), and net income of JPY 2,500M (−21.3% YoY). The net income decline is primarily attributable to the non-recurrence of gains on sales of investment securities (JPY 1.71B in the current period).
Commentary On Shareholder Returns
FY12/2025 year-end dividend was set at JPY 80 per share (up JPY 10 from JPY 70), marking the third consecutive year of increases. Payout ratio stood at 25.0% (vs. 23.4% prior year). FY12/2026 dividend is also planned at JPY 80 per share (payout ratio of 31.2%). The mid-term plan (2024–2026) targets a cumulative JPY 2.5B in shareholder returns via dividends plus buybacks. The company executed JPY 500M in share repurchases during the period (treasury shares of 571,927 at period-end, +202,816 shares YoY).
Financial Position
Total assets expanded alongside M&A activity (consolidation of Hoang Hai and Marunaka Shiko), with bridge financing driving up short-term borrowings. While the equity ratio declined to 55.2%, the company holds JPY 19.31B in investment securities, suggesting substantial latent financial flexibility.
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Cash and Cash Equivalents | JPY 5,100M | +30.1% YoY |
| Total Assets | JPY 84,874M | +10.5% YoY |
| └ Total Current Assets | JPY 30,613M | +11.3% YoY |
| └ Total Non-Current Assets | JPY 54,261M | +10.1% YoY |
| Shareholders' Equity | JPY 46,857M | +2.2% YoY |
| Interest-Bearing Debt | JPY 7,259M | Short-term borrowings 6,775 + current portion of long-term debt 484 |
| └ Short-Term Borrowings | JPY 6,775M | +90.5% YoY |
| └ Current Portion of Long-Term Debt | JPY 484M | +4,598.6% YoY |
| Goodwill | JPY 4,943M | +170.1% YoY |
| Investment Securities | JPY 19,318M | −10.1% YoY |
| EBITDA | JPY 5,091M | Operating income 2,881 + D&A 2,209 |
News Released Alongside The Earnings Announcement
- 2026/02/13Announcement regarding change in representative director
- 2026/02/13Announcement regarding nomination of director candidates and alternate director candidates, and personnel changes
Major Announcements During The Quarter
- 2026/01/27Completion of payment for treasury share disposal to the employee stock ownership plan; number of shares disposed adjusted to 16,899 Announcement regarding completion of payment and partial forfeiture of treasury share disposal via third-party allotment for restricted stock grants through the employee stock ownership plan
- 2025/11/14Acquired 209,600 treasury shares via ToSTNeT off-auction purchase at a total cost of JPY 507,651,200 Announcement regarding results and completion of treasury share acquisition via off-auction trading (ToSTNeT-3)
- 2025/11/13Resolved to conduct ToSTNeT off-auction purchase; upper limit of 230,000 shares, maximum acquisition cost of JPY 557,060,000 Announcement regarding treasury share purchase via off-auction trading (ToSTNeT-3)
- 2025/11/13Organizational restructuring including merger of HR and General Affairs departments into a new HR & General Affairs department, along with executive personnel changes Announcement regarding organizational restructuring and personnel changes
Large-Shareholding Filings / Material Proposals Over The Past Year
No new filings or amendments to large-shareholding reports for Dynapack Inc. were submitted during the past year (February 2025 – February 2026). For reference, major historical filings are noted below.
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