KAMEDA SEIKA CO.,LTD. FY2027 Q1 Earnings Report

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Executive Summary

In the April–June 2026 period, operating profitability clearly improved due to increased profits in the Domestic Rice Crackers and Overseas Businesses, while Net Income declined sharply as the extraordinary gain recorded in the previous year disappeared. Revenue was ¥353.7B (+4.4% YoY), Operating Income was ¥20.6B (+43.5%), and Ordinary Income was ¥21.1B (+58.4%), representing increases in both revenue and profit. The Operating Margin improved to 5.8%, up +1.6pt from 4.2% in the same period of the previous year. Meanwhile, Quarterly Net Income Attributable to Owners of the Parent was ¥13.75B (-93.7% YoY). This decline reflects the comparison with the previous year, when extraordinary income totaling ¥210.0B was recorded, including a gain on step acquisition associated with the additional acquisition of shares in TH FOODS, INC. In the current period, only an extraordinary loss of ¥0.2B was recorded, indicating that the earnings structure has normalized.

Factors Affecting Performance

【Revenue】Revenue was ¥353.7B, up +4.4% YoY. By segment, the Overseas Business posted the highest growth at ¥136.5B (+8.5%), while the Domestic Rice Crackers Business generated ¥182.4B (+3.3%) and remained the core business, accounting for 51.6% of total company revenue. Meanwhile, the Food Business generated ¥20.4B (-7.3%), and Other Businesses generated ¥33.0B (-1.0%), both recording revenue declines. Growth in the Overseas Business drove the company’s overall top-line performance.

【Profit and Loss】Operating Income was ¥20.6B (+43.5% YoY), and the Operating Margin improved to 5.8% from 4.2% in the previous year, an improvement of +1.6pt. Against a gross margin of 28.9%, the SG&A ratio was 23.0%; SG&A growth of +2.0% was below revenue growth of +4.4%, indicating operating leverage. By segment, the Overseas Business recovered sharply, with segment profit of ¥5.6B (+212.4%, 4.1% margin), while the Domestic Rice Crackers Business also improved to ¥14.5B (+45.3%, 7.9% margin). Other Businesses, however, fell into an operating loss of ¥0.5B. Ordinary Income was ¥21.1B (+58.4%), supported by higher Operating Income as well as interest income and foreign exchange gains. Although extraordinary losses were limited to ¥0.2B and non-recurring effects were minimal in the current period, Net Income Attributable to Owners of the Parent was ¥13.75B (-93.7% YoY) due to the disappearance of the ¥210.0B extraordinary gain recorded in the same period of the previous year. With both revenue and profit increasing, the quality of business earnings has improved from the previous year.

Segment Analysis

The Domestic Rice Crackers Business generated revenue of ¥182.4B (+3.3%), Operating Income of ¥14.5B (+45.3%), and a 7.9% margin, making it the largest contributor to total segment profit. The Overseas Business generated revenue of ¥136.5B (+8.5%), Operating Income of ¥5.6B (+212.4%), and a 4.1% margin, representing a significant recovery from the low profitability recorded in the previous year. The Food Business recorded revenue of ¥20.4B (-7.3%) and Operating Income of ¥1.0B (-31.9%), resulting in lower revenue and profit. Other Businesses, including freight transportation, generated revenue of ¥33.0B (-1.0%) but posted an operating loss of ¥0.5B, falling into the red from a profit of +¥1.1B in the previous year. The Domestic Rice Crackers Business accounted for approximately 70% of total company Operating Income of ¥20.6B, while the Overseas Business showed the clearest improvement in profitability.

Key Financial Indicators

【Profitability】The Operating Margin improved to 5.8% from 4.2% in the same period of the previous year, an improvement of +1.6pt. The Ordinary Income Margin also increased to 5.96% from 3.93% in the previous year. The Net Income Margin attributable to owners of the parent was 3.9%; however, the Net Income Margin in the same period of the previous year had been lifted to approximately 64.8% due to the recognition of extraordinary income, limiting the significance of a simple comparison. ROE based on Net Income Attributable to Owners of the Parent was 1.3% (quarterly result, before annualization). 【Cash Flow Quality】Accounts receivable were ¥171.8B, down ¥13.7B from ¥185.5B in the previous year, while inventories were ¥56.7B, up ¥3.1B from ¥53.6B. The combined balance of operating receivables and inventories was ¥228.5B, slightly lower than ¥239.0B in the previous year. 【Investment Efficiency】The total asset turnover ratio was 0.19x (quarterly result). Fixed assets, including property, plant and equipment of ¥652.7B and intangible assets of ¥485.1B, including goodwill of ¥163.9B, accounted for 70.5% of total assets, and capital turnover remained low. 【Financial Soundness】The Equity Ratio was 55.2% (equity of ¥1,043.2B ÷ total assets of ¥1,890.6B, compared with 54.7% in the previous year), representing a slight improvement from the previous year. The Current Ratio was 200.4% (current assets of ¥557.1B / current liabilities of ¥278.1B), indicating strong short-term payment capacity. Interest-bearing debt totaled ¥437.5B, comprising short-term debt of ¥69.8B and long-term debt of ¥367.7B, compared with cash and deposits of ¥201.7B.

Cash Flow Analysis

Cash and deposits were ¥201.7B, down ¥4.4B from ¥206.1B at the end of the same period of the previous year. Interest-bearing debt included short-term borrowings of ¥69.8B, down ¥21.5B from ¥91.3B in the previous year, indicating progress in repayment. Long-term borrowings were ¥367.7B, slightly down from ¥380.9B in the previous year. Property, plant and equipment amounted to ¥652.7B, up ¥14.7B from ¥638.0B in the previous year, indicating that capital investment has continued. In terms of working capital, accounts receivable were ¥171.8B, down ¥13.7B from ¥185.5B in the previous year, while inventories were ¥56.7B, up ¥3.1B from ¥53.6B. Retained earnings were ¥882.4B, an increase of ¥3.0B from ¥879.4B in the previous year, indicating only a slight increase in internal reserves even after dividend payments. Overall, while reductions in short-term borrowings and continued capital investment are progressing simultaneously, the upward trend in inventory levels requires monitoring from the perspective of capital efficiency.

Quality of Earnings

Extraordinary losses in the current period were limited to ¥0.2B, and the majority of profit can be considered recurring earnings derived from operating activities. In the same period of the previous year, extraordinary income totaling ¥210.0B was recorded, including a gain on step acquisition associated with the additional acquisition of shares in TH FOODS, INC.; non-recurring factors therefore accounted for most of the ¥219.4B in Net Income Attributable to Owners of the Parent at that time. In the current period, this temporary factor disappeared and Net Income normalized to ¥13.75B, which is considered closer to the company’s underlying recurring earnings power. Non-operating income totaled ¥2.2B, comprising dividend income of ¥0.4B, foreign exchange gains of ¥0.5B, and other income of ¥0.6B, equivalent to only 0.6% of revenue. Non-operating expenses totaled ¥1.7B, including interest expense of ¥1.4B, indicating that earnings were generally driven by operating activities. Comprehensive Income was ¥26.1B, including ¥24.7B attributable to owners of the parent. The ¥10.97B difference from Net Income of ¥13.75B was primarily attributable to foreign currency translation adjustments of +¥11.8B, as the yen translation valuation of overseas subsidiaries contributed to the increase.

Earnings Forecast and Guidance

Progress against the full-year plan was 24.7% for Revenue, 24.8% for Operating Income, 27.4% for Ordinary Income, and 32.0% for Net Income, against the full-year forecast of ¥43.0B in Net Income Attributable to Owners of the Parent. Compared with the 25% benchmark for quarterly progress, Revenue and Operating Income were broadly in line with the plan, while Ordinary Income and Net Income were progressing slightly ahead of schedule. The faster progress in Ordinary Income and Net Income appears to reflect higher Operating Income and the limited extraordinary loss of ¥0.2B. There were no revisions to the earnings forecast or dividend forecast during the quarter.

Shareholder Returns

The company conducted a stock split at a ratio of 3 shares for every 1 common share effective April 1, 2026. Accordingly, the annual dividend forecast of ¥24 for the fiscal year ending March 2027 is based on the post-split basis; without taking the split into account, this would be equivalent to ¥72. The Payout Ratio against forecast EPS of ¥67.99 is calculated at 35.3% (¥24 ÷ ¥67.99). The previous year’s actual dividend of ¥15 was on a pre-split basis, and it should be noted that a simple year-on-year comparison is not meaningful due to the impact of the stock split. There was no revision to the dividend forecast during the quarter.

Risk Factors

1. Working capital accumulation: Accounts receivable of ¥171.8B and inventories of ¥56.7B totaled ¥228.5B, equivalent to 64.6% of revenue. Inventories increased by ¥3.1B from the previous year, making inventory turnover a key point for future monitoring.

2. Goodwill and intangible asset levels: Goodwill of ¥163.9B and total intangible assets of ¥485.1B accounted for 15.2% and 45.1%, respectively, of net assets of ¥1,076.5B. The goodwill arose from the additional acquisition of shares in TH FOODS, INC., and impairment losses may occur if business plans are not achieved.

3. Increase in interest burden: Interest expense was ¥1.45B, more than double the ¥0.61B recorded in the same period of the previous year. With interest-bearing debt of ¥437.5B, changes in the interest-rate environment could affect future interest payment burdens.

Industry Benchmark (For Reference; Compiled by the Company)

Key Points from the Financial Results

1. The Operating Margin improved to 5.8% from 4.2% in the same period of the previous year, an improvement of +1.6pt, while Operating Income in the Overseas segment recovered sharply to ¥5.6B, up +212.4% YoY. The improvement in the company-wide margin was primarily attributable to improved profitability in the Overseas Business.

2. Net Income Attributable to Owners of the Parent declined sharply by -93.7% YoY; however, the same period of the previous year included ¥210.0B in extraordinary income, including a gain on step acquisition associated with the additional acquisition of shares. In the current period, extraordinary gains and losses had virtually disappeared, and the apparent decline reflects the normalization of profit to a level based on recurring earnings power.

3. Progress against the full-year plan was 27.4% for Ordinary Income and 32.0% for Net Income, both slightly above the 25% quarterly progress benchmark. The results are currently progressing at a pace that supports the validity of the plan.

Theoretical Share Price (Reference Value)

This is a reference range mechanically calculated solely from publicly disclosed data using a residual income model (Ohlson-type model with an explicit 5-year fade period). It is not a forecast of the market share price or a recommendation of any specific investment action.

Sensitivity: ¥1,372–¥1,451 at ±1% for the cost of equity, and ¥1,403–¥1,416 at ±0.1 for ω.

Notes:

• Net Income is significantly compressed relative to Operating Income due to tax burdens, acquisition-related expenses, and non-controlling interests (Net Income ÷ Operating Income 52%). This value reflects that compression at face value; if these factors are temporary, the underlying value may be higher.
• As forecast ROE is below the cost of equity, the theoretical value is below book value per share.
• Net assets at the end of the quarter are used; there is a timing difference relative to the full-year forecast.

(Calculation model: Residual income model / Interest-rate reference month: 2026-06 / This value does not forecast or guarantee future share prices)

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This report is an earnings analysis document automatically generated by AI through analysis of XBRL earnings release data. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the company based on publicly available financial results data. Investment decisions should be made at your own responsibility, after consulting professionals as necessary.

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