| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥102.0B | ¥88.4B | +15.4% |
| Operating Income | ¥-4.3B | ¥-7.2B | +39.8% |
| Profit Before Tax | ¥-4.7B | ¥-7.4B | +36.0% |
| Net Income | ¥-3.1B | ¥-6.4B | +52.2% |
| ROE | -2.2% | -4.3% | - |
In Q1, the Company achieved a significant year-on-year reduction in losses at every level—operating loss, loss before tax, and net loss—alongside revenue growth, marking a period of improving profitability. Revenue was ¥102.0B (+15.4% YoY), operating loss was ¥4.3B (versus a ¥7.2B loss in the previous year), loss before tax was ¥4.7B (versus a ¥7.4B loss in the previous year), and net loss attributable to owners of the parent was ¥3.1B (versus a ¥6.4B loss in the previous year). The primary factors behind the reduction in losses were the expansion of revenue in the core Mushroom Business (+9.2%) and controlled growth in SG&A expenses, which improved the gross profit margin from 16.2% in the previous year to 17.4%.
【Revenue】Revenue increased by +15.4% to ¥102.0B from ¥88.4B in the same period of the previous year. Revenue from the reported Mushroom Business segment increased to ¥78.7B (+9.2%), driving overall revenue growth, while Other Businesses also grew to ¥1.1B (+48.6%). Revenue includes a gain of ¥2.2B from changes in the fair value of biological assets under IAS 41 “Agriculture” (¥1.6B in the previous year); excluding this gain, the growth rate based on revenue from ordinary activities (¥79.8B) was +9.6%.
【Profit and Loss】Gross profit was ¥17.7B (+24.2%), and the gross profit margin improved by +120bp to 17.4% from 16.2% in the previous year. SG&A expenses remained limited to ¥22.4B (+2.4%), declining by -279bp as a percentage of revenue to 21.9% from 24.7% in the previous year, indicating that expense growth was contained relative to revenue growth. As a result, operating loss narrowed to ¥4.3B (versus a ¥7.2B loss in the previous year), and the operating margin improved by +389bp to -4.2% from -8.1% in the previous year. Net finance income and costs slightly deteriorated to a net expense of ¥0.4B (versus a net expense of ¥0.2B in the previous year), although the impact was immaterial, resulting in a loss before tax of ¥4.7B (versus a ¥7.4B loss in the previous year). Income tax expense of ¥1.6B was recorded (¥0.9B in the previous year), and net loss attributable to owners of the parent narrowed to ¥3.1B (versus a ¥6.4B loss in the previous year). No non-recurring income or expenses were recorded in either the previous year or the current period, and the results can be characterized as a phase of revenue growth and earnings improvement, with losses narrowing alongside higher revenue.
The reported segments are effectively centered on the Mushroom Business, which accounts for 98.6% of revenue from ordinary activities. Revenue from the Mushroom Business was ¥78.7B (+9.2% YoY), while its operating loss was ¥4.2B (versus a ¥7.2B loss in the previous year), improving its operating margin to -5.3% from -10.0% in the previous year. Other Businesses, which do not constitute a reported segment, generated revenue of ¥1.1B (+48.6%) and an operating loss of ¥0.1B, remaining small in scale. Company-wide adjustment amounts were immaterial, and the improvement in earnings during the period was largely attributable to revenue growth and cost-control effects within the Mushroom Business alone.
【Profitability】The operating margin improved significantly to -4.2% from -8.1% in the previous year, while the net profit margin improved to -3.0% from -7.2%; both remained in negative territory. The gross profit margin also continued to improve, reaching 17.4% from 16.2% in the previous year.【Cash Flow Quality】Operating Cash Flow (OCF) was -¥6.2B, representing cash outflow exceeding net loss (-¥3.1B). Payments of income taxes and other taxes of ¥8.8B and changes in working capital were factors weighing on cash flow.【Investment Efficiency】ROE was -2.2%, total asset turnover (quarterly basis, revenue/total assets) was 0.29x, and financial leverage (total assets/equity) was 2.57x. Capital efficiency was supported primarily by the improvement in the net profit margin.【Financial Soundness】The equity ratio was 38.9%, broadly flat from 39.2% in the same period of the previous year. However, current liabilities of ¥102.7B exceeded current assets of ¥86.2B, resulting in a current ratio of 0.84x, below 1x, indicating that short-term liquidity requires monitoring.
Operating Cash Flow (OCF) was -¥6.2B (versus -¥22.8B in the previous year). Although it improved significantly year on year, it remained negative. In addition to the improvement in earnings, collections of trade receivables (+¥5.0B) and a decrease in biological assets (+¥6.0B) contributed positively. Conversely, payments of income taxes and other taxes of ¥8.8B (¥15.1B in the previous year) and a decrease in liabilities related to employee benefits (-¥5.9B) were sources of cash outflow. Investing Cash Flow was -¥4.3B, reflecting increased investment in the acquisition of property, plant and equipment of ¥4.3B (¥1.6B in the previous year). Financing Cash Flow was -¥9.4B, primarily due to dividend payments of ¥7.5B (¥4.7B in the previous year), repayment of long-term borrowings of ¥1.3B, and repayment of lease liabilities of ¥0.6B. As a result, free cash flow (OCF + investing cash flow) was -¥10.5B. Dividends and investments could not be funded by operating activities, and cash and cash equivalents declined from ¥39.7B at the beginning of the period to ¥19.8B.
Comprehensive income for Q1 was -¥3.0B, broadly in line with the net loss attributable to owners of the parent of -¥3.1B. The divergence attributable to other comprehensive income, including foreign currency translation differences of +¥0.04B, was immaterial. No non-recurring income or expenses were recorded in either the previous year or the current period in the income statement, and the results can be explained as earnings from ordinary business activities. However, revenue and cost of sales reflect changes in the fair value of biological assets arising from the application of IAS 41 “Agriculture.” In the current period, these included a gain of ¥2.2B on the revenue side and fair value changes of ¥2.96B on the cost side, creating an accounting source of volatility. Since OCF was below net loss (-¥6.2B vs -¥3.1B), the divergence between accrual accounting and cash accounting was negative, indicating that cash-generation capacity supporting earnings has not kept pace with the improvement reported in the income statement.
Revenue progress against the full-year forecast was 17.9% (¥102.0B/¥569.1B), below the simple one-quarter benchmark of 25%. Against the full-year operating income forecast of ¥41.4B (-4.1% YoY), the Company recorded an operating loss of ¥4.3B in Q1; therefore, achievement of the forecast assumes a substantial return to profitability from Q2 onward. The full-year net income forecast is ¥25.4B (-14.1% YoY), and the EPS forecast is ¥63.69, whereas Q1 remained loss-making on both measures. There were no revisions to the earnings forecast or dividend forecast during the quarter.
The full-year dividend forecast is ¥20.00 per share. Dividend payments during Q1 were ¥7.51B (¥4.74B in the previous year). Based on the number of shares outstanding (39,911 thousand shares), the estimated full-year total dividend is approximately ¥7.98B, implying a payout ratio of approximately 31% against the full-year net income forecast of ¥25.4B. Free cash flow was negative at -¥10.5B in Q1, and the dividend payment was not funded by cash flow from operating activities. No share repurchases were conducted during Q1, and shareholder returns were centered on dividends.
Short-term liquidity risk: Current liabilities of ¥102.7B exceed current assets of ¥86.2B, resulting in a current ratio of 0.84x, below 1x. Cash and cash equivalents declined to ¥19.8B, and management of funding for short-term obligations, including ¥44.2B of long-term borrowings due for repayment within one year, remains important.
Risk of fluctuations in the fair value measurement of biological assets: Under the application of IAS 41 “Agriculture,” changes in the fair value of biological assets, including a gain of ¥2.2B in the current period, are recorded in both revenue and cost of sales. Biological assets amounted to ¥26.7B, and valuation fluctuations arising from growing conditions and other factors may contribute to earnings volatility.
Business segment concentration risk: The Mushroom Business accounts for 98.6% of revenue from ordinary activities, and the reported segments are effectively concentrated in a single business. The segment’s operating loss was ¥4.2B, with an operating margin of -5.3%, meaning that profitability improvement depends on productivity and cost management within this business alone.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | -4.2% | – | – |
| Net Profit Margin | -3.0% | – | – |
| Both the Company’s operating margin and net profit margin remained in negative territory, and comparison data against the industry median has not been prepared. |
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 15.4% | – | – |
| Revenue growth was +15.4%, but comparison data against the industry median has not been prepared. |
※Source: Compiled by the Company
The gross profit margin improved to 17.4% from 16.2% in the previous year, while the operating margin improved to -4.2% from -8.1%. The narrowing of losses through revenue growth and SG&A expense control can be observed as a structural trend.
Both OCF (-¥6.2B) and free cash flow (-¥10.5B) were negative, representing cash outflow exceeding net loss (-¥3.1B). A divergence was observed between the improvement in the income statement and cash-generation capacity.
Revenue progress in Q1 against the full-year plan remained at 17.9%. Operating income and net income started in the red despite full-year forecasts of profitability; therefore, earnings progress from Q2 onward will be a key point to monitor in assessing achievement of the plan.
This report is a financial-results analysis document automatically generated by AI based on XBRL financial-results summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed financial-results data. Investment decisions should be made at your own responsibility, after consulting professionals as necessary.
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