Nissui Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥452.94B
• Operating Income: ¥19.79B
• Net Income: ¥13.55B
• EPS: ¥46.56

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

For FY2026 Q2 (cumulative), Nissui (1332) delivered steady topline growth with operating outperformance, reflecting effective cost control and mix optimization amid a relatively low-margin, working-capital-intensive business model. Revenue reached ¥452.9bn (+2.8% YoY), while operating income rose faster at ¥19.8bn (+14.6% YoY), indicating positive operating leverage. Gross margin stood at 15.6%, and operating margin improved to approximately 4.37%, supported by disciplined expenses and likely favorable product mix or procurement conditions. Ordinary income (¥21.2bn) exceeded operating income, implying net non-operating gains offsetting interest costs (interest expense ¥1.6bn) and contributing modestly to bottom-line strength. Net income was ¥14.3bn (+13.7% YoY), translating to a reported net margin of 3.16%, consistent with the economics of the seafood and processed foods value chain. DuPont decomposition shows ROE of 5.04%, driven by net margin of 3.16%, asset turnover of 0.689, and financial leverage of 2.32; leverage is moderate and contributes meaningfully to equity returns. EBITDA was ¥31.8bn (7.0% margin), and interest coverage was healthy at 12.3x, indicating ample buffer against financing costs. Liquidity is sound with a current ratio of 147% and quick ratio of 101.7%, supported by working capital of ¥106.4bn; inventories are material at ¥102.6bn, typical for the sector but a key watchpoint. Operating cash flow of ¥13.4bn represents 0.94x net income, suggesting reasonably aligned earnings quality for the half-year. Balance sheet strength appears adequate: total assets ¥657.0bn, total liabilities ¥348.9bn, equity ¥283.7bn, implying a debt-to-equity ratio of 1.23x and asset-to-equity leverage of 2.32x. The reported effective tax rate is shown as 0.0%, but tax expense of ¥5.4bn indicates a normal tax burden in practice; the 0% figure should be treated as a presentation limitation. Several disclosure items are unreported (e.g., equity ratio, investing cash flows, cash balance, DPS, share count), constraining completeness of FCF and per-share analysis. Despite these limitations, margin expansion alongside controlled financing costs and stable liquidity paints a resilient operating picture in 1H. Seasonality is relevant in fisheries/processed foods, so full-year extrapolation should be conservative. Overall, the company exhibits disciplined execution, moderate leverage, and improving profitability, with working capital management and commodity/FX exposures remaining pivotal to 2H performance.

Profitability Analysis

ROE_decomposition: ROE 5.04% = Net margin 3.16% × Asset turnover 0.689 × Financial leverage 2.32. Net margin reflects improved operating performance; asset turnover is moderate for a midstream food/seafood processor; leverage provides a meaningful but not excessive boost to ROE. margin_quality: Gross margin 15.6% and operating margin ~4.37% indicate modest but improving profitability. EBITDA margin 7.0% shows adequate contribution from depreciation-light segments balanced by capital-intensive operations. Ordinary income exceeding operating income suggests net non-operating positives (e.g., FX/equity-method/other), partially offset by ¥1.6bn interest expense. operating_leverage: Revenue grew +2.8% YoY while operating income rose +14.6% YoY, evidencing positive operating leverage from cost discipline and mix. The step-up in operating margin implies incremental margins above the base, likely supported by procurement tailwinds and SG&A efficiency.

Growth Assessment

revenue_sustainability: Topline growth of +2.8% YoY is steady, likely driven by stable demand in processed foods and aquaculture with pricing/mix offsets to input cost variability. Growth is modest but consistent with the sector’s mature profile. profit_quality: Net income +13.7% YoY tracks operating profit growth, with limited reliance on non-operating items. Interest coverage at 12.3x and OCF/NI of 0.94 indicate that earnings are reasonably cash-backed in the half-year period. outlook: Near-term outlook hinges on procurement costs (fishmeal/oil, energy), aquaculture yields, and FX. With moderate leverage and improving margins, the company is positioned to defend profitability, but seasonality and commodity/FX volatility could temper 2H momentum.

Financial Health

liquidity: Current ratio 147% and quick ratio 101.7% indicate solid short-term coverage. Working capital totals ¥106.4bn, with inventories of ¥102.6bn a key component and risk lever in volatile input markets. solvency: Debt-to-equity 1.23x and asset-to-equity leverage 2.32x reflect moderate leverage. Interest coverage of 12.3x provides comfortable headroom against rate and spread movements. capital_structure: Total assets ¥657.0bn, liabilities ¥348.9bn, equity ¥283.7bn. The reported equity ratio is not disclosed in the dataset; based on provided balances, leverage is manageable for the sector.

Cash Flow Quality

earnings_quality: OCF/Net income at 0.94 suggests income is largely cash-convertible for the period, with manageable working capital drag. FCF_analysis: Investing cash flows are unreported, so FCF cannot be reliably determined despite the placeholder FCF of 0. Capex intensity is a known feature of the sector; absent investing CF disclosure, FCF sustainability cannot be concluded. working_capital: Inventories are sizable (¥102.6bn), consistent with procurement cycles; tight management of inventory turnover and receivables will be crucial to sustain OCF into 2H.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are unreported; the 0.0% figure is not indicative of policy. With net income of ¥14.3bn and solid OCF in 1H, internal capacity for shareholder returns exists, but actual payouts cannot be assessed from the provided data. FCF_coverage: FCF coverage cannot be evaluated due to missing investing cash flows; the displayed 0.00x should not be interpreted as a lack of coverage. policy_outlook: Without DPS history or guidance in this dataset, policy commentary is constrained. Continued focus on earnings stability and cash conversion will frame any future payout considerations.

Risk Assessment

Business Risks:

• Raw material price volatility (surimi, salmon, tuna, fishmeal/oil) impacting gross margin
• Aquaculture biological and disease risks affecting yields and costs
• Seasonality of catches and sales patterns influencing 2H performance
• Geopolitical/supply disruptions in key fishing regions (e.g., Peru anchovy, North Pacific, Russia)
• Energy and logistics cost fluctuations affecting processing and distribution
• Product mix and pricing power constraints in competitive retail/foodservice channels

Financial Risks:

• FX volatility (JPY vs. USD/EUR) affecting import costs and translation of overseas earnings
• Interest rate risk on floating-rate debt, albeit mitigated by 12.3x interest coverage
• Inventory valuation and obsolescence risk given large inventory balances
• Working capital swings potentially pressuring OCF in volatile procurement environments

Key Concerns:

• Reliance on stable inventory turnover to sustain cash conversion
• Exposure to commodity and FX shocks that can compress margins
• Data limitations on investing cash flows and dividends, constraining FCF and payout visibility

Investment Implications

Key Takeaways:

• Margin expansion with operating income growth outpacing revenue (+14.6% vs. +2.8% YoY)
• ROE at 5.04% supported by moderate leverage (2.32x) and stable asset turnover
• Healthy liquidity (CR 147%, QR 101.7%) and strong interest coverage (12.3x)
• OCF broadly in line with earnings (OCF/NI 0.94), but FCF unassessable due to missing investing CF
• Inventories are high and pivotal to cash flow trajectory into 2H

Metrics to Watch:

• Operating margin trajectory and EBITDA margin vs. input cost trends
• Inventory days and cash conversion cycle
• OCF/Net income and working capital movements
• Debt-to-equity and interest coverage as rates and spreads evolve
• FX (USD/JPY) sensitivity and hedging effectiveness
• Capex and investing cash flows to assess FCF sustainability

Relative Positioning: Within Japan’s food/seafood peers, Nissui shows modest margins with improving operating leverage, moderate balance-sheet leverage, and adequate liquidity; execution on working capital and cost management remains the primary differentiator.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis