FUJI JAPAN Co., Ltd. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥785M
• Operating Income: ¥-39M
• Net Income: ¥127M
• EPS: ¥59.89

Income Statement

Balance Sheet

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

FUJI Japan (14490) reported FY2025 Q3 (JGAAP, non-consolidated) revenue of ¥785.0m, down 5.7% YoY, indicating a contraction in topline momentum. Gross profit margin is shown at 36.6%, suggesting relatively healthy pricing or mix despite softer demand; however, the disclosed cost of sales figure appears inconsistent with the gross profit and margin provided, so we rely on the margin metric for analysis. Operating income remained a loss at ¥-39.0m (flat YoY), evidencing persistent operating pressure and likely inadequate scale to absorb fixed costs. Ordinary income was ¥-41.0m, implying that non-operating items did not offset the operating loss; interest expense was modest at ¥2.3m. Despite negative operating and ordinary income, net income jumped to ¥127.0m (EPS ¥59.89), implying material extraordinary gains or special items under JGAAP below ordinary income. This leads to a net margin of 16.18%, which is not reflective of underlying operations and is unlikely to be sustainable absent recurring non-operating/extraordinary gains. DuPont analysis shows ROE of 32.73% (net margin 16.18%, asset turnover 1.052x, financial leverage 1.92x), clearly inflated by non-recurring income rather than core profitability. Total assets were ¥746.0m and total equity ¥388.0m; the reported equity ratio is 0.0% (likely undisclosed), but a simple recalculation implies c. 52% equity ratio, indicating a moderate, not weak, capitalization. Current ratio is 126.5% with working capital of ¥66.6m, suggesting acceptable near-term liquidity. Debt-to-equity of 1.22x (liabilities/equity) is moderate for a small cap in construction/related services, but negative operating income and interest coverage at -17.2x highlight weak debt-servicing capacity from operations. Cash flow statements are not disclosed (all zeros), so cash conversion and free cash flow coverage cannot be assessed; the OCF/NI of 0.00 shown is not meaningful. Depreciation, inventories, EBITDA, and cash balances are also undisclosed, limiting visibility into asset intensity, capital needs, and cash buffers. With annual DPS at ¥0 and payout at 0%, the company appears to be conserving cash amid operating losses. Overall, the quarter reflects resilient gross margin but inadequate operating leverage, reliance on non-recurring income for bottom-line profitability, and moderate balance sheet strength, with key data gaps in cash flow and several line items. Near-term outlook hinges on revenue stabilization, cost control to restore operating break-even, and clarity on extraordinary gains quality. Investors should focus on the trajectory of operating income/ordinary income, underlying cash generation, and any guidance on order trends and backlog.

Profitability Analysis

ROE_decomposition: ROE 32.73% = Net margin 16.18% x Asset turnover 1.052x x Financial leverage 1.92x. Net margin of 16.18% is driven by extraordinary/non-recurring gains given operating income (¥-39m) and ordinary income (¥-41m) are negative. Asset turnover at 1.052x reflects decent asset utilization for a small balance sheet. Leverage at 1.92x (Assets/Equity) moderately amplifies ROE. margin_quality: Gross margin is shown as 36.6%, indicating pricing/mix resilience, but the cost of sales figure conflicts with the stated gross profit; we rely on the provided 36.6% margin. Operating margin is negative (-5.0% using operating income of ¥-39m on revenue of ¥785m), signaling insufficient cost absorption. Net margin is artificially elevated by below-ordinary income gains. operating_leverage: Revenue declined 5.7% YoY while operating loss persisted, suggesting negative operating leverage: fixed costs are not being flexed with revenue. Interest expense is low (¥2.3m), but interest coverage is deeply negative (-17.2x), underscoring that operating earnings do not cover financing costs.

Growth Assessment

revenue_sustainability: Revenue of ¥785.0m fell 5.7% YoY, indicating softness in demand or execution constraints. Without backlog/orders data, visibility is limited; the current run-rate does not suggest imminent re-acceleration. profit_quality: Operating and ordinary losses juxtaposed with a positive net income point to low quality of earnings this period, reliant on extraordinary gains. Absent recurring non-operating income, sustainable profitability is not evidenced. outlook: Near-term improvement depends on stabilizing revenue and tightening SG&A/overheads to restore operating break-even. Monitoring any disclosure of order intake, backlog, or pricing trends will be critical to assess recovery in core profitability.

Financial Health

liquidity: Current assets ¥318.1m vs current liabilities ¥251.5m yields a current ratio of 126.5% and working capital of ¥66.6m, indicating adequate short-term liquidity. Quick ratio is the same due to undisclosed inventories. solvency: Total liabilities ¥473.7m vs equity ¥388.0m implies D/E (L/E) of 1.22x and an implied equity ratio around 52% (reported 0% is undisclosed). Interest expense is small, but negative operating income indicates limited debt-servicing capability from operations. capital_structure: Assets ¥746.0m funded ~52% by equity and ~48% by liabilities (implied). Leverage (Assets/Equity) at ~1.92x is moderate; however, persistent operating losses heighten solvency sensitivity to any working capital strain.

Cash Flow Quality

earnings_quality: OCF is undisclosed; therefore OCF/NI of 0.00 is not meaningful. Given net income is driven by extraordinary items while operating and ordinary income are negative, cash earnings quality is likely weak this quarter. FCF_analysis: Investing CF and OCF are undisclosed, so FCF cannot be determined. Capex and depreciation are also not available, limiting insight into maintenance vs growth spending. working_capital: Working capital totals ¥66.6m, but the composition (receivables, payables, inventories) is not disclosed. Potential cash volatility from receivables collection and project milestone timing remains a risk in this model.

Dividend Sustainability

payout_ratio_assessment: Annual DPS is ¥0 with a reported payout of 0%. Given operating and ordinary losses, a conservative stance is appropriate. EPS of ¥59.89 is not a reliable base for payouts due to non-recurring drivers. FCF_coverage: FCF data is unavailable; thus, coverage cannot be assessed. With operating losses, sustained dividends would be difficult to justify without clear OCF support. policy_outlook: Until the company restores recurring operating profitability and demonstrates cash generation, a continued conservative dividend policy appears likely.

Risk Assessment

Business Risks:

• Revenue contraction (-5.7% YoY) indicating demand softness or project timing effects
• Negative operating and ordinary income highlighting weak core profitability
• Potential project execution risk and fixed-cost absorption issues
• Dependence on extraordinary gains to deliver positive net income
• Limited disclosure (cash flows, inventories, depreciation) reducing visibility
• Price competition and cost inflation risks typical in construction/contracting

Financial Risks:

• Negative interest coverage (-17.2x) implying inability to service interest from operations
• Moderate leverage (L/E 1.22x) combined with operating losses increases solvency sensitivity
• Working capital swings could pressure liquidity given small capital base
• Unknown cash balance due to undisclosed cash flow statement

Key Concerns:

• Quality and sustainability of net income given extraordinary items
• Path back to operating break-even amid declining revenue
• Data gaps (OCF, capex, cash) hindering assessment of cash runway

Investment Implications

Key Takeaways:

• Topline declined 5.7% YoY to ¥785.0m; gross margin indicated at 36.6%
• Operating loss of ¥-39.0m persisted; ordinary loss ¥-41.0m
• Net income ¥127.0m driven by non-recurring factors; net margin 16.18%
• ROE 32.73% is not reflective of core earnings quality
• Current ratio 126.5% and implied equity ratio ~52% indicate moderate balance sheet strength
• Interest coverage negative; debt-servicing from operations is weak
• Cash flow and several key items are undisclosed, limiting conviction

Metrics to Watch:

• Operating income and ordinary income trajectory
• Order intake/backlog and revenue run-rate
• Gross margin stability versus cost inflation
• Cash flow from operations and working capital movements
• Capex levels and depreciation once disclosed
• Any recurrence of extraordinary income items

Relative Positioning: Within small-cap Japanese construction/contracting peers, the company shows acceptable balance sheet leverage but weaker operating profitability, with reported ROE flattered by non-recurring income and limited disclosure constraining comparability.

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