ARTNER CO.,LTD. FY2026 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥8.90B
• Operating Income: ¥1.48B
• Net Income: ¥1.02B
• EPS: ¥96.27

Income Statement

Balance Sheet

Profitability Ratios

Share Information

Dividend 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

Altner Co., Ltd. (2163) reported FY2026 Q3 consolidated results under JGAAP showing stable topline and solid profitability, with revenue of ¥8.90bn and operating income of ¥1.479bn. Gross profit of ¥3.437bn implies a gross margin of 38.6%, indicating healthy value-add for an engineering staffing/technology services model. SG&A expenses were ¥1.957bn, or 22.0% of revenue, supporting an operating margin of 16.6% that is robust for the sector. Ordinary income of ¥1.483bn was largely driven by operating performance, with non-operating items netting a de minimis +¥4.0bn impact, underscoring earnings quality at the core level. Net income came in at ¥1.022bn, translating to a net margin of 11.5%, consistent with a disciplined cost base and limited financial expenses. DuPont analysis yields a calculated ROE of 20.7%, decomposed into an 11.5% net margin, 1.237x asset turnover, and 1.46x financial leverage—an attractive return profile anchored in margin strength and efficient asset use. The balance sheet is conservative: total assets are ¥7.196bn with equity of ¥4.937bn, implying an equity ratio of about 68.6% (company-reported equity ratio is unfilled in XBRL). Liquidity is strong with cash and deposits of ¥4.263bn and a current ratio of 3.87x, providing ample flexibility for hiring and potential growth investments. Interest-bearing debt disclosure is unreported in XBRL, but disclosed short- and long-term loans aggregate to only ¥38.7m, indicating minimal leverage. Tax expense was ¥460m; while profit before tax is unreported, using ordinary income as a proxy implies an effective tax rate of approximately 31%. Reported YoY growth fields show 0.0%, which likely reflects unreported YoY comparatives rather than true flat performance; hence growth commentary focuses on level and mix rather than changes. Cash flow statement items (OCF/FCF) are unreported, so cash flow quality cannot be assessed from this filing; however, the balance sheet suggests prudent cash accumulation. Dividend datapoints in XBRL show DPS as 0, but a calculated payout ratio of 85.3% implies that a dividend policy exists (likely based on guidance or TTM), and we treat DPS data as incomplete rather than zero. Intangibles (¥415m) and goodwill (¥330m) are modest relative to equity, limiting impairment risk. Overall, Altner combines high margins, strong ROE, low leverage, and ample liquidity, positioning it well for sustained investment in engineer recruitment and capability development. Key watchpoints include wage inflation versus billing rates, utilization, and client demand elasticity, given the sensitivity of the staffing model to macro and industrial cycles.

Profitability Analysis

ROE_decomposition: ROE 20.7% = Net margin 11.48% × Asset turnover 1.237 × Financial leverage 1.46. The high ROE is primarily margin-driven, with moderate asset efficiency and modest leverage. margin_quality: - Gross margin: 38.6% (¥3.437bn/¥8.90bn), indicating strong pricing vs. delivery costs in engineering services.

• Operating margin: 16.6% (¥1.479bn/¥8.90bn), supported by SG&A at 22.0% of revenue.
• Ordinary margin: 16.7%, reflecting negligible non-operating noise.
• Net margin: 11.5% (¥1.022bn/¥8.90bn). Tax expense of ¥460m suggests an effective tax rate near 31% when using ordinary income as a proxy (PBT is unreported). operating_leverage: With SG&A at 22.0% of revenue and high gross margin, incremental revenue should drive attractive drop-through, assuming utilization and wage inflation are managed. Reported YoY fields show 0.0% and are treated as not disclosed; thus, directional operating leverage cannot be inferred from this release. Nonetheless, current margin structure implies scope for positive operating leverage if headcount productivity and bill rates rise faster than personnel costs.

Growth Assessment

revenue_sustainability: Revenue level at ¥8.90bn is supported by a sizable receivables balance (¥1.776bn), consistent with ongoing client deliveries. The service mix likely skews toward higher value-added engineering assignments given the gross margin profile, which can be more resilient if tied to long-term contracts, though sensitive to macro capex trends. profit_quality: Ordinary income closely tracks operating income, indicating limited reliance on financial or one-off items. The tax burden approximates statutory norms. No extraordinary gains are apparent. The strong cash position further supports business continuity and working capital needs. outlook: While explicit YoY growth is not disclosed here, the combination of high margins and a strong balance sheet positions Altner to continue investing in engineer recruitment and training to support medium-term growth. Key determinants will be utilization rates, billing rate progression vs. wage inflation, and demand from key end-markets (manufacturing, automotive, electronics, and R&D-related projects).

Financial Health

liquidity: Current assets ¥6.134bn vs. current liabilities ¥1.586bn yield a current ratio of 3.87x and quick ratio of 3.87x (no inventories), indicating strong short-term liquidity. Cash and deposits of ¥4.263bn provide substantial cushion. solvency: Total liabilities ¥2.258bn vs. equity ¥4.937bn imply liabilities-to-equity of ~0.46x. Equity ratio is approximately 68.6%. Loans disclosed total ~¥38.7m, suggesting negligible financial risk from leverage. capital_structure: Cash-heavy, low-debt structure with modest intangibles (goodwill ¥330m, intangibles ¥415m). The company has flexibility for dividends, hiring, and selective M&A without stressing the balance sheet.

Cash Flow Quality

earnings_quality: With ordinary income closely aligned to operating income and minimal non-operating items, earnings quality appears high from an income-statement perspective. However, the cash flow statement is unreported in this dataset, so cash conversion cannot be verified. FCF_analysis: Operating CF, investing CF, and FCF are not disclosed here (zeros indicate unreported). Given the asset-light model and low capex typically associated with staffing/engineering services, FCF is often strong, but we do not infer it without data. Available cash of ¥4.263bn suggests prior positive cash generation or conservative capital allocation. working_capital: Receivables of ¥1.776bn and strong cash imply adequate funding of working capital. Working capital totals ¥4.548bn, providing room to support growth in assignments without external financing.

Dividend Sustainability

payout_ratio_assessment: The calculated payout ratio of 85.3% suggests a high distribution relative to earnings, but DPS and total dividends in XBRL appear unreported. If a payout near this level is intended, sustainability hinges on ongoing cash generation and stable margins. FCF_coverage: FCF is unreported; thus, coverage cannot be computed. The sizable net cash position mitigates near-term risk but is not a substitute for recurring OCF coverage over time. policy_outlook: While reported DOE and DPS are unfilled, the high calculated payout ratio indicates an emphasis on shareholder returns. Future policy likely balances dividends with headcount expansion and potential selective investments; monitoring updated guidance and board policy disclosures is key.

Risk Assessment

Business Risks:

• Demand volatility from key client industries (manufacturing, auto, electronics) impacting assignment volumes and utilization.
• Wage inflation and talent scarcity compressing gross margins if billing rates lag.
• Client pricing pressure and contract renewals affecting bill rates.
• Recruitment and retention challenges for highly skilled engineers.
• Regulatory and labor law changes (overtime, dispatch rules) affecting cost structure and flexibility.
• Project concentration or large-client dependence increasing revenue volatility.
• Technology shifts reducing demand for certain skill sets without timely reskilling.

Financial Risks:

• Receivables collection timing affecting cash conversion and working capital.
• Potential impairment risk on goodwill/intangibles if acquired businesses underperform (though amounts are modest).
• Limited operating history disclosure in this snapshot constrains trend analysis and could mask cyclical swings.
• Dividend commitments (if payout is indeed >80%) increasing pressure on cash if profits soften.

Key Concerns:

• Lack of disclosed cash flow statement hampers assessment of cash conversion and FCF coverage.
• Sensitivity of margins to wage inflation vs. billing rate pass-through.
• Visibility on headcount growth and utilization not provided in this filing.

Investment Implications

Key Takeaways:

• High-quality earnings with operating margin at 16.6% and net margin at 11.5%.
• Strong ROE at 20.7% driven primarily by margins and moderate asset turnover.
• Robust liquidity with ¥4.263bn in cash and a current ratio of 3.87x; minimal leverage.
• Tax burden approximately 31% (using ordinary income proxy), consistent with normalized taxation.
• Cash flow data unreported; assess sustainability via upcoming filings and supplementary materials.
• Dividend policy appears shareholder-friendly given the calculated payout ratio, but confirm DPS and FCF coverage.
• Key operational drivers: utilization, bill rate progression, and engineer hiring/retention.

Metrics to Watch:

• Utilization rate and average billing rate versus wage inflation.
• Headcount growth (engineers on assignment) and attrition.
• SG&A ratio and operating margin trajectory.
• Receivables days and cash conversion cycle.
• Order backlog/visibility and client concentration metrics.
• Dividend guidance, DPS actuals, and payout/DOE targets.
• Capex and recruitment/training investments to support growth.

Relative Positioning: Within Japanese engineering staffing/technology services peers, Altner appears to combine above-average operating margins, high ROE, and a conservative balance sheet. This profile suggests competitive strength in higher value-added assignments and disciplined cost control, albeit with the typical cyclical and wage-pressure sensitivities of the sector.

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