| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue | ¥534.5B | ¥531.4B | +0.6% |
| Operating Income | ¥43.2B | ¥24.2B | +78.5% |
| Pre-tax Profit | ¥42.0B | ¥21.8B | +92.9% |
| Net Income | ¥29.5B | ¥15.0B | +97.5% |
| ROE | 20.0% | 11.9% | - |
For the fiscal year ended March 2026, Revenue was ¥534.5B (vs prior year +¥3.1B +0.6%), Operating Income ¥43.2B (vs prior year +¥19.0B +78.5%), Ordinary Income ¥28.8B (vs prior year +¥6.5B +29.0%), and Net Income ¥29.5B (vs prior year +¥14.5B +97.5%). While top-line was largely flat, last year’s impairment loss of ¥16.0B fell to ¥0.98B and other expenses declined substantially from ¥17.7B to ¥1.9B, driving a sharp recovery in profitability from the operating stage. Gross margin improved 0.7pt to 26.4% (prior year 25.7%), and operating margin widened 3.5pt to 8.1% (prior year 4.6%). ROE improved to 21.8% (prior year 12.6%), a 9.2pt increase, driven by a combination of net margin 5.5%, total asset turnover 1.42x, and financial leverage 2.55x, resulting in materially improved capital efficiency. The core Mushroom Business recorded Revenue ¥374.7B (+1.9%) and Operating Income ¥43.8B (+74.6%), restoring profitability to an 11.7% margin. Operating Cash Flow was ¥45.3B and Free Cash Flow ¥24.5B, sufficient to cover dividends of ¥6.4B and share buybacks of ¥0.3B. Long-term borrowings were reduced by ¥44.2B, raising the Equity Ratio to 39.2% and improving financial soundness.
[Revenue] Revenue from operations was ¥378.5B (+¥7.4B +2.0%), a slight increase year-on-year. The core Mushroom Business contributed ¥374.7B (+1.9%), with products such as maitake and king oyster mushrooms remaining resilient. Others accounted for ¥3.7B (+15.8%) and, while small, expanded. On an IFRS basis, total revenue was ¥534.5B (+0.6%); fair value gains were largely offset (revenue ¥156.0B vs cost of goods sold ¥155.3B), so net incremental impact was limited. Volumes and prices were stable, but changes in customer mix and cost inflationary pressures warrant monitoring.
[Profitability] Cost of goods sold was ¥393.6B, producing gross profit ¥140.9B and gross margin 26.4%, a 0.7pt improvement year-on-year. SG&A was ¥97.6B (prior year ¥95.5B), up ¥2.1B, but absorbed by revenue growth, leaving SG&A ratio roughly flat at 18.3%. Notably, last year’s impairment loss of ¥16.0B decreased dramatically to ¥0.98B, and other expenses fell from ¥17.7B to ¥1.9B. Normalization of these one-off expenses drove Operating Income sharply to ¥43.2B (+78.5%). Financial income of ¥1.2B and financial expense ¥2.5B were minor; after deducting corporate taxes of ¥12.4B from Pre-tax Profit ¥42.0B, Net Income reached ¥29.5B (+97.5%). In conclusion, the company achieved both revenue and profit growth, but the profit increase was mainly due to reversal of prior period one-off charges and cost normalization.
The Mushroom Business delivered Revenue ¥374.7B (+1.9% YoY) and Operating Income ¥43.8B (+74.6%), with an operating margin of 11.7%. Last year profitability was limited to 7.1% due to impairment and other charges, but this period saw substantial improvement in profitability owing to cost efficiency and reduction in one-off expenses. The Other segment generated Revenue ¥3.7B (+15.8%) but an operating loss of ¥0.98B (margin -26.3%), remaining small. The corporate structure is highly concentrated, with the Mushroom Business effectively accounting for ~100% of company profits; this concentration risk is high, but the recovery in the core business’ profitability is positive.
[Profitability] Operating margin 8.1% (prior year 4.6%) improved 3.5pt; Net margin 5.5% (prior year 2.8%) rose 2.7pt. ROE improved to 21.8% (prior year 12.6%), up 9.2pt, well above historical levels. Gross margin 26.4% improved 0.7pt, supported by impairment reversals and expense normalization. [Cash Quality] Operating Cash Flow ¥45.3B equals 1.53x Net Income ¥29.5B, with an accrual ratio of -4.2%, indicating high earnings quality. Operating Cash Flow/EBITDA (EBITDA ≈ ¥66B) is roughly 0.69x, slightly lower, impacted by tax payments ¥15.2B and decrease in trade payables ¥3.5B. [Investment Efficiency] Total asset turnover 1.42x (prior year 1.40x) remained stable. Financial leverage 2.55x; the primary driver of ROE improvement was higher net margin. [Financial Soundness] Equity Ratio rose to 39.2% (prior year 33.1%), up 6.1pt. Long-term borrowings decreased to ¥110.1B (prior year ¥154.4B), a 28.7% reduction. Interest-bearing debt/EBITDA is approximately 1.67x, at investment-grade levels. Current ratio is 102%, tight but manageable given cash ¥39.7B and OCF ¥45.3B. Interest coverage is about 17.3x (Operating Income ¥43.2B / interest ¥2.5B), indicating ample capacity to service interest.
Operating Cash Flow was ¥45.3B (prior year ¥55.2B, -17.8%). Starting from Pre-tax Profit ¥42.0B, depreciation ¥22.9B and impairment ¥0.98B were added back. Working capital adjustments included inventory decrease ¥3.6B (positive), while accounts receivable increase ¥1.5B and accounts payable decrease ¥3.5B were cash outflows. Corporate tax payments ¥15.2B and interest payments ¥1.9B were deducted to arrive at OCF. Investing Cash Flow was -¥20.9B, entirely capex focused for maintenance and renewal. Financing Cash Flow was -¥24.1B, including long-term borrowing repayments ¥14.3B, dividends ¥6.4B, and share buybacks ¥0.3B. Free Cash Flow was ¥24.5B (OCF ¥45.3B - investing CF ¥20.9B), covering dividends and buybacks totaling ¥6.7B by 3.7x. Cash increased slightly from ¥39.0B at the beginning of the period to ¥39.7B at period end, preserving financial soundness.
Earnings quality is high, with OCF/Net Income 1.53x, indicating earnings are backed by cash. Extraordinary items this period totaled impairment ¥0.98B and loss on disposal of fixed assets ¥0.53B, totaling ¥1.5B, less than 0.3% of revenue. Prior year extraordinary items totaled impairment ¥16.0B and disposal loss ¥1.2B, totaling ¥17.2B (3.2% of revenue); the disappearance of these one-offs is the primary driver of profit improvement. Financial income ¥1.2B (0.2% of revenue) and financial expense ¥2.5B (0.5% of revenue) indicate low reliance on non-operating items; profits are essentially from core operations. Comprehensive income ¥29.0B vs Net Income ¥29.5B, a difference of ¥0.5B due to defined benefit remeasurement -¥1.1B and foreign currency translation +¥0.6B, shows minor other comprehensive impacts. The gap between Ordinary Income ¥28.8B and Net Income ¥29.5B is within tax burden (effective tax rate 29.6%), so divergence is limited. Accrual ratio -4.2% suggests low risk of accounting earnings adjustments.
Full-year guidance: Revenue ¥569.1B (+6.5% YoY), Operating Income ¥41.4B (-4.1% YoY), Net Income ¥25.4B (-14.1% YoY). Actuals reached Revenue ¥534.5B for a 93.9% progress rate (behind), Operating Income ¥43.2B at 104.3% progress, and Net Income ¥29.5B at 116.1% progress, exceeding plan. Despite missing top-line, the profit outperformance is attributed to product mix improvement, disappearance of prior period one-off charges, and cost controls. Next fiscal year forecasts show a decline in Operating Income, reflecting the non-recurrence of this period’s one-off benefit, anticipated cost inflation, and higher depreciation. The plan (Revenue +6.5% vs Operating Income -4.1%) implies cost pressures will outweigh topline growth; price adjustments and productivity maintenance are key to meeting targets.
Annual dividend is ¥23 (interim ¥4, year-end ¥19), a material increase from prior year ¥3. Payout Ratio is 39.8% (dividends only), and Free Cash Flow ¥24.5B covers dividends ¥6.4B by 3.8x, indicating capacity. Share buybacks were limited at ¥0.3B, making Total Return Ratio about 41%. Free Cash Flow coverage of dividends + buybacks totaling ¥6.7B is 3.7x, suggesting sustainability. Net interest-bearing debt (long-term borrowings ¥110.1B - cash ¥39.7B) is about ¥70B vs EBITDA ≈ ¥66B, so net debt/EBITDA ≈ 1.1x, a low level and supportive of returns. Next fiscal year forecast Net Income ¥25.4B (EPS ¥63.69) with dividend ¥5 (payout ratio ~7.8%) indicates a projected decline, likely reflecting conservatism at forecasting; on a realized basis, the company appears to trend toward dividend increases. Capital allocation prioritizes debt reduction and stable dividends while balancing growth investment and shareholder returns.
Business concentration risk: The Mushroom Business accounts for 99% of Revenue and effectively 100% of Operating Income, resulting in extreme concentration across products, customers, and the supply chain. The business structure, focused on maitake and king oyster production and sales, makes company performance highly sensitive to demand fluctuations, intensified competition, and production disruptions from climate or disease. Biological assets of ¥3,265M (8.7% of total assets) are highly volatile, and fair value fluctuations under IFRS 41 (this period revenue ¥156B; cost ¥155B) can materially affect quarterly profits.
Cost inflation risk: Rising energy, logistics, and labor costs can compress gross margin and overall margins. While Revenue growth was +0.6%, SG&A rose +2.2%; if efficiency gains lag, sustaining operating margin expansion will be difficult. Failure to pass through price increases would result in margin deterioration. The production structure has a high fixed-cost ratio, making depreciation burden an issue when utilization declines.
Short-term liquidity risk: Long-term borrowings maturing within one year amount to ¥44.2B, with current liabilities ¥114.7B versus current assets ¥116.9B, leaving a tight gap of about ¥2B. Although cash ¥39.7B and OCF ¥45.3B can cover obligations, seasonal working capital swings or simultaneous AR increases and AP decreases could strain cash. Rising rates on variable-rate debt would also increase interest burden.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Return on Equity | 21.8% | 7.7% (5.0%–8.8%) | +14.1pt |
| Operating Margin | 8.1% | 14.6% (7.2%–39.4%) | -6.6pt |
| Net Margin | 5.5% | 11.9% (7.2%–35.4%) | -6.4pt |
ROE exceeds the industry median by 14.1pt, indicating superior capital efficiency; operating and net margins are below medians, reflecting differences in cost structure.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 0.6% | 10.1% (7.3%–12.1%) | -9.4pt |
Revenue growth underperforms the industry median by 9.4pt, indicating top-line expansion lags the industry average.
※Source: Company compilation
Recovery to Operating Margin 8.1% and ROE 21.8% is primarily due to reversal of prior period one-off charges and cost normalization, but gross margin improvement of 0.7pt and SG&A restraint suggest an underlying improvement in operational profitability. Although the next fiscal year plans for Operating Income down -4.1%, the current period’s outperformance versus plan reflects progress in pricing/mix improvements and productivity gains, indicating potential for margin stabilization. Continued pass-through of energy and labor inflation and yield improvement will be key to maintaining profitability.
Reduction of long-term borrowings by ¥44.2B brought interest-bearing debt/EBITDA to approximately 1.67x and raised the Equity Ratio to 39.2%, enhancing financial health. Free Cash Flow ¥24.5B covers dividends and buybacks totaling ¥6.7B by 3.7x, indicating ample return capacity. OCF/Net Income 1.53x confirms high earnings quality; optimizing working capital (AR, AP, inventory) is a catalyst for improving cash conversion next year.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company from public financial statements. Investment decisions are your responsibility; please consult a professional advisor as necessary.