Taikisha Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥130.47B
• Operating Income: ¥10.47B
• Net Income: ¥6.24B
• EPS: ¥116.46

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

Taikisha Co., Ltd. (1979) delivered a strong FY2026 Q2 performance with revenue of ¥130.5bn (+13.8% YoY) and operating income of ¥10.5bn (+66.9% YoY), demonstrating meaningful operating leverage. Net income reached ¥7.47bn (+31.7% YoY), translating to EPS of ¥116.46. Operating margin improved to approximately 8.0% (operating income/revenue), while the reported EBITDA margin was 8.7%, indicating controlled SG&A and relatively light D&A (¥0.84bn) for the period. Ordinary income exceeded operating income by ¥0.57bn, implying positive non-operating contributions. The DuPont framework indicates a net margin of 5.72%, asset turnover of 0.493, and financial leverage of 1.68, yielding an ROE of 4.75%. Given total assets of ¥264.5bn and equity of ¥157.3bn, the implied equity ratio is approximately 59.5% (despite the disclosed ‘0.0%’ placeholder), underscoring a conservative balance sheet. Liquidity is robust with a current ratio of ~2.09x and working capital of ~¥109.9bn. Interest coverage is very strong at ~78.7x, reflecting low financial risk. However, operating cash flow was negative at -¥16.7bn, resulting in an OCF/NI ratio of -2.24, which flags timing or working-capital-related cash strain typical of project-based businesses. Investing and cash balances appear as zero but are undisclosed; thus free cash flow is not assessable from this dataset. Dividend data are also shown as zero, which should be treated as ‘not disclosed’ for this period rather than an absence of dividends. Overall, profitability momentum and financial strength are solid, but cash conversion in the period is weak, and several key disclosures (gross profit, inventories, investing CF, cash balance, DPS) are missing, which limits precision in margin and FCF assessments. The outlook hinges on sustaining the higher operating margin, normalizing working capital, and the quality of order backlog. We acknowledge data limitations and base our analysis strictly on the available non-zero items and reasonable derivations.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 5.72%
• asset_turnover: 0.493
• financial_leverage: 1.68
• calculated_ROE: 4.75%
• commentary: ROE of 4.75% is driven more by improved profitability than leverage. Leverage is moderate (assets/equity ~1.68x). Sustained margin expansion would be the principal lever for further ROE improvement. margin_quality:
• operating_margin: ≈8.0% (10.47bn / 130.47bn)
• ebitda_margin: 8.7%
• net_margin: ≈5.7%
• tax_rate_estimate: ≈25.1% (2.77bn / 11.04bn)
• non_operating_items: Ordinary income exceeded operating income by ~¥0.57bn, suggesting net financial/other gains.
• note_on_gross_margin: Gross profit not disclosed (shown as zero). Margin analysis relies on operating and EBITDA levels. operating_leverage: Revenue grew +13.8% YoY while operating income grew +66.9% YoY, indicating strong operating leverage from cost discipline and/or better project mix. Low D&A (¥0.84bn) relative to operating income supports high EBIT flow-through.

Growth Assessment

revenue_sustainability: Top-line growth of +13.8% YoY indicates healthy order execution; sustainability will depend on backlog conversion, new order intake, and project timing. profit_quality: Operating margin expansion to ~8% and strong ordinary income imply better mix and cost control; however, negative OCF suggests profit recognition ahead of cash collection, common in long-term project accounting. outlook: If current margin levels are maintained and working capital normalizes, earnings quality should improve. FX, input costs, and overseas project execution remain key variables for sustaining growth.

Financial Health

liquidity:

• current_ratio: ≈2.09x (210.94bn / 101.03bn)
• quick_ratio: Reported 2.09x; inventories not disclosed
• working_capital: ≈¥109.9bn
• commentary: Strong near-term liquidity; the negative OCF highlights the importance of monitoring receivables and contract assets. solvency:
• equity_ratio: ≈59.5% (157.28bn / 264.46bn) [disclosed 0.0% reflects non-disclosure placeholder]
• debt_to_equity: 0.71x (using total liabilities as proxy)
• interest_coverage: ≈78.7x (10.47bn / 0.133bn)
• commentary: Balance sheet conservatism and high coverage indicate low financial risk. capital_structure: Moderate leverage with ample equity buffer. Ordinary income exceeds operating income, implying net positive non-operating contributions and manageable financing costs.

Cash Flow Quality

earnings_quality: OCF/NI at -2.24 indicates weak cash conversion this period, likely due to working capital outflows (receivables/contract assets) typical for project milestones. free_cash_flow: Not assessable: investing CF is undisclosed (shown as zero). Reported ‘FCF 0’ should not be interpreted as actual zero. working_capital: Current assets substantially exceed current liabilities, but the period’s negative OCF suggests collection/timing headwinds. Inventories not disclosed; receivables/contract assets likely the primary drivers.

Dividend Sustainability

payout_ratio_assessment: Payout ratio shown as 0.0% reflects non-disclosure. With NI of ¥7.47bn and strong balance sheet, capacity exists, but cash generation in the period was negative. fcf_coverage: Unassessable due to missing investing CF and cash balance. OCF was negative, which would constrain near-term coverage absent cash on hand or normalization. policy_outlook: No dividend data provided this period. Future distributions should be assessed against cash conversion, backlog visibility, and capital needs.

Risk Assessment

Business Risks:

• Project execution risk and cost overruns in large engineering/installation contracts
• Order intake cyclicality and timing of backlog conversion
• Input cost inflation and subcontractor availability impacting margins
• Foreign exchange volatility affecting overseas projects and translation
• Customer concentration and credit collection risk in large projects
• Regulatory and permitting delays affecting project schedules

Financial Risks:

• Negative operating cash flow driven by working capital build
• Potential mismatch between revenue recognition and cash receipts
• Exposure to interest rate changes, albeit limited given strong coverage
• Currency risk on cross-border cash flows

Key Concerns:

• Sustainability of the step-up in operating margin (~8%)
• Normalization of operating cash flow and receivable/contract asset collections
• Visibility on investing cash flows and capital expenditure needs
• Absence of disclosed dividend information for the period

Investment Implications

Key Takeaways:

• Strong YoY earnings momentum with operating leverage evident
• Healthy balance sheet with implied equity ratio ~59.5% and high interest coverage
• Cash conversion weak this period (OCF/NI -2.24), likely due to working capital
• Non-operating results supportive (ordinary income > operating income)
• Data gaps (gross profit, inventories, investing CF, cash, dividends) limit precision on margins and FCF

Metrics to Watch:

• Order intake and backlog quality/mix
• Operating margin sustainability and SG&A ratio
• OCF trend, days sales outstanding, and contract asset/liability movements
• Capex and investing cash flows to assess true FCF
• Effective tax rate consistency (~25%) and non-operating income stability

Relative Positioning: Appears financially conservative with solid operating momentum versus typical project-based peers; cash conversion lags near-term, warranting monitoring until working capital normalizes.

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