HASEKO Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥595.47B
• Operating Income: ¥41.33B
• Net Income: ¥19.37B
• EPS: ¥89.32

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

Haseko Corporation (TSE:18080) reported solid FY2026 Q2 consolidated results under JGAAP, with top-line growth translating into stronger operating profitability. Revenue grew 6.6% year over year to ¥595.5bn, while operating income rose 16.7% to ¥41.3bn, indicating margin expansion and positive operating leverage. Gross profit reached ¥74.6bn, yielding a gross margin of 12.5%, and operating margin improved to 6.9%, reflecting better cost control and/or favorable project mix. Ordinary income was ¥39.3bn and net income advanced 25.0% to ¥24.2bn, lifting EPS to ¥89.32. DuPont metrics show a net margin of 4.07%, asset turnover of 0.436x, and financial leverage of 2.59x, driving an ROE of 4.59% (consistent with the reported figure). Interest coverage is robust at 24.1x on an EBIT basis, highlighting manageable financing costs relative to earnings. Liquidity appears strong with a current ratio of 237.8% and working capital of ¥610.4bn, although cash and inventories were not disclosed in XBRL (zeros indicate non-disclosure, not actual zero balances). The equity ratio is shown as 0.0% but should be treated as undisclosed; balance sheet totals indicate an equity base of ¥527.4bn against total assets of ¥1.36tn. Operating cash flow was negative at ¥-52.1bn, which is a notable divergence from net income (OCF/NI of -2.15), likely reflecting construction-cycle working capital outflows in the period. Financing cash flow was ¥-22.6bn, suggesting debt repayments and/or shareholder returns, though dividends per share and payout data were not disclosed for the period. Depreciation and amortization were modest at ¥4.0bn, with EBITDA at ¥45.3bn and an EBITDA margin of 7.6%. The effective tax rate metric reported as 0.0% appears anomalous; given disclosed income tax expense of ¥12.0bn and positive profitability, an effective tax burden exists despite the calculated display. Overall, earnings quality is mixed: accounting profits are improving, but near-term cash generation is weak due to working capital needs. The company’s leverage (total liabilities/equity of 1.58x) and high interest coverage suggest balanced solvency, while liquidity looks ample on reported current assets versus current liabilities. Outlook depends on order backlog conversion, construction cost trends, and the timing of handovers, none of which were disclosed here. We proceed with caution on cash flow interpretation due to several undisclosed items, and focus on sustainability of the operating margin gains and normalization of operating cash flow in the second half.

Profitability Analysis

ROE_decomposition: ROE 4.59% = Net Profit Margin 4.07% × Asset Turnover 0.436 × Financial Leverage 2.59. This reflects moderate profitability, relatively low asset turnover for a construction/development model at mid-year, and moderate balance-sheet leverage. margin_quality: Gross margin 12.5% and operating margin 6.9% indicate improved cost discipline and/or favorable project mix versus prior year (OP +16.7% vs sales +6.6%). EBITDA margin of 7.6% is consistent with capital-light operations (D&A ¥4.0bn). The net margin of 4.07% reflects financing and tax burden; ordinary income trails operating income due to non-operating expenses. operating_leverage: Positive operating leverage evident: operating income growth (+16.7% YoY) exceeded revenue growth (+6.6% YoY), implying lower SG&A ratio and/or better pricing/mix. Continued leverage depends on backlog quality and input cost stability.

Growth Assessment

revenue_sustainability: Top-line growth of 6.6% appears healthy for mid-year, but sustainability hinges on order intake, backlog execution, and delivery schedules, which were not disclosed. Construction revenues can be lumpy due to handover timing. profit_quality: Profit growth outpaced sales, suggesting mix/pricing gains or efficiency improvements. However, negative OCF indicates profits are not yet translating to cash due to working capital build typical in the construction cycle. outlook: Assuming normal seasonality, second-half deliveries could support revenue recognition and cash release. Key drivers will be backlog conversion, unit handovers, and input-cost dynamics. Absent disclosure on orders and guidance, the near-term outlook is cautiously constructive on margins but contingent on cash normalization.

Financial Health

liquidity: Current assets ¥1,053.2bn vs current liabilities ¥442.8bn yields a current ratio of 237.8% and working capital of ¥610.4bn, indicating ample short-term coverage. Quick ratio equals current ratio due to inventories not being disclosed; actual quick liquidity may be lower if inventory/work-in-process is material. solvency: Total liabilities ¥833.2bn versus equity ¥527.4bn implies a debt-to-equity of 1.58x (using total liabilities as a proxy for debt). Interest coverage is strong at 24.1x EBIT/interest, suggesting comfortable debt service capacity. capital_structure: Financial leverage of 2.59x (assets/equity) aligns with industry norms for a developer/general contractor mix. The equity ratio was not disclosed; based on the balance sheet, an implied equity ratio (equity/assets) would be approximately 38.7%.

Cash Flow Quality

earnings_quality: Accounting profits improved but cash conversion is weak this half: OCF/Net Income at -2.15 indicates significant working capital outflows. D&A is modest (¥4.0bn), so earnings are not heavily dependent on non-cash add-backs. FCF_analysis: Free cash flow not disclosed; investing CF is also undisclosed in XBRL. With OCF negative and unknown capex, underlying FCF likely negative this period, consistent with inventory/receivables build ahead of completions. working_capital: Construction businesses often experience mid-year builds in costs on uncompleted contracts and receivables before handovers; inventories and cash were not disclosed here, but the negative OCF is consistent with such timing effects.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio were not disclosed (zeros indicate non-disclosure). Based on mid-year results alone, an assessment of payout ratio cannot be made. FCF_coverage: With OCF negative and FCF undisclosed, coverage of dividends by free cash flow cannot be assessed for this period. policy_outlook: No explicit dividend information was provided in this dataset. Sustainability will depend on second-half cash generation, earnings trajectory, and capital allocation priorities (debt reduction vs. shareholder returns).

Risk Assessment

Business Risks:

• Project execution and handover timing risk affecting revenue recognition and cash flows
• Input cost volatility (materials, subcontractor labor) impacting margins
• Sales environment for condominiums and real estate market cyclicality
• Backlog visibility and order intake uncertainty (not disclosed)
• Regulatory and zoning changes affecting development timelines

Financial Risks:

• Negative operating cash flow in the period, indicating working capital strain
• Moderate leverage (total liabilities/equity 1.58x) could amplify downturn impacts
• Interest rate risk on floating-rate debt (coverage currently strong but sensitive to rates)
• Refinancing and liquidity reliance given undisclosed cash balance

Key Concerns:

• OCF/Net Income at -2.15 highlights cash conversion risk
• Dependence on second-half deliveries to meet cash and earnings targets
• Limited disclosure on inventories, cash, investing CF, and dividends constrains visibility

Investment Implications

Key Takeaways:

• Revenue up 6.6% YoY with operating income up 16.7%, signaling margin expansion
• ROE at 4.59% supported by positive margins and moderate leverage
• Interest coverage strong at 24.1x; solvency appears sound
• Liquidity metrics are robust on reported figures (current ratio 2.38x)
• Operating cash flow negative (¥-52.1bn), pointing to working capital timing pressure
• Dividend details not disclosed; payout capacity hinges on H2 cash generation

Metrics to Watch:

• Backlog and order intake (value and mix)
• Operating cash flow and working capital turnover in H2
• Gross and operating margins versus input cost trends
• Interest coverage and debt maturities structure
• Handover schedules and revenue recognition cadence

Relative Positioning: Within Japanese contractors/developers, Haseko’s mid-year profitability and interest coverage appear solid, while cash conversion lags this half due to typical construction-cycle timing; visibility on orders and cash balances is more limited given undisclosed items.

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