TOHOKUSHINSHA FILM CORPORATION FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥21.05B
• Operating Income: ¥1.31B
• Net Income: ¥1.71B
• EPS: ¥19.08

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

Tohokushinsha Co., Ltd. (23290) delivered solid topline growth and strong profit expansion in FY2026 Q2 on a consolidated, JGAAP basis. Revenue rose 6.3% YoY to ¥21.051bn, while operating income increased 61.4% YoY to ¥1.306bn, indicating meaningful operating leverage and improved cost discipline. Gross margin was 27.2% and operating margin reached 6.2%, signaling better mix and/or execution versus the prior year. Ordinary income of ¥1.829bn exceeded operating income, implying sizable non-operating gains (e.g., investment income, FX, dividends), which boosted pretax profitability. Net income rose 56.7% YoY to ¥2.626bn, surpassing ordinary income, suggesting additional extraordinary gains. The DuPont bridge indicates a net margin of 12.47%, asset turnover of 0.211x, and financial leverage of 1.15x, yielding a reported ROE of 3.02%. ROE remains modest because of low asset turnover and a very large equity base despite improved margins. Cash generation was healthy: operating cash flow (OCF) was ¥2.463bn, equating to an OCF/Net Income ratio of 0.94, which generally supports earnings quality. The balance sheet appears very strong with low leverage: total liabilities of ¥17.689bn against total equity of ¥86.979bn (implied equity ratio roughly 87% based on assets and equity). Liquidity is abundant with a current ratio of 510% and working capital of ¥63.502bn. Financing cash outflows of ¥4.666bn indicate capital returns or debt reduction; no dividend was reported for the period. Several items are not disclosed in the XBRL (e.g., cash and equivalents, investing cash flows, inventories, shares outstanding), so some ratios provided as zero should be interpreted as undisclosed, not actual zero. The effective tax rate shown as 0.0% is not representative, given reported income tax of ¥1.426bn and the presence of material non-operating/extraordinary items. Overall, the company shows improved operating performance, strong cash conversion, and a highly conservative capital structure, but headline ROE is constrained by low asset intensity/turnover and reliance on non-operating items in the quarter.

Profitability Analysis

ROE_decomposition: DuPont: Net margin 12.47% × Asset turnover 0.211 × Financial leverage 1.15 = ROE 3.02% (reported). Net income benefited from non-operating and extraordinary gains, which elevated the margin versus operating performance. margin_quality: Gross margin 27.2% and operating margin 6.2% indicate improvement YoY (operating income +61.4% on +6.3% revenue). EBITDA margin at 8.2% (EBITDA ¥1.732bn) reflects modest non-cash charges (D&A ¥0.426bn). Ordinary income (¥1.829bn) and net income (¥2.626bn) above operating income suggest profit uplift from items outside core operations; margin sustainability should be assessed excluding these effects. operating_leverage: Operating income growth (+61.4% YoY) far outpaced revenue growth (+6.3% YoY), evidencing positive operating leverage from cost control and/or mix. Interest expense is de minimis (¥4m), with interest coverage of 326.5x, so financial leverage contributes little to profit variability.

Growth Assessment

revenue_sustainability: Topline grew 6.3% YoY to ¥21.051bn, a steady pace likely driven by content-related demand and project execution. With asset turnover at 0.211x and a large current asset base, sustained revenue growth will hinge on efficient conversion of pipeline/backlog into sales and timely collections. profit_quality: Operating profit improved sharply; however, the delta between operating (¥1.306bn), ordinary (¥1.829bn), and net income (¥2.626bn) indicates significant non-operating/extraordinary contributions. Core profit quality is good but headline growth partly reflects non-recurring or less predictable items. outlook: Assuming stable demand in core production/post-production and advertising-related services, moderate revenue growth is plausible, with scope for incremental margin expansion if cost discipline holds. That said, normalization of non-operating gains would temper net income growth. Monitoring order intake, utilization, and content rights monetization will be key to validating momentum.

Financial Health

liquidity: Current assets ¥78.986bn vs current liabilities ¥15.484bn yield a current ratio of 510% and working capital of ¥63.502bn. Quick ratio is shown as 510% (inventories undisclosed). Liquidity appears ample. solvency: Total liabilities ¥17.689bn vs equity ¥86.979bn imply low leverage (Debt-to-Equity 0.20x). Interest expense is minimal, and interest coverage is 326.5x, indicating negligible solvency risk at present. capital_structure: Implied equity ratio ≈ 87% (equity/total assets), despite the reported 0.0% placeholder. Balance sheet is equity-heavy, which dampens ROE but provides resilience.

Cash Flow Quality

earnings_quality: OCF of ¥2.463bn vs net income of ¥2.626bn gives OCF/NI of 0.94, indicating earnings are largely cash-backed this period. FCF_analysis: Investing cash flows and capex are undisclosed; the reported Free Cash Flow figure of 0 should be treated as not available. As such, we cannot quantify FCF or its coverage of distributions. Directionally, positive OCF and negative financing CF suggest capacity for capital returns or debt reduction. working_capital: Large positive working capital (¥63.502bn). With inventories undisclosed, the focus should be on receivables/payables discipline. The scale of current assets implies that collections and project milestone billings are critical for sustaining cash conversion.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are shown as 0.00; treat as undisclosed for this period. EPS is ¥19.08, but without DPS we cannot compute an actual payout ratio. FCF_coverage: FCF is not computable due to missing investing/capex data; hence FCF coverage of dividends cannot be assessed. OCF is positive, which is supportive, but not definitive without capex visibility. policy_outlook: Financing CF outflow of ¥4.666bn suggests capital allocation activity (e.g., buybacks or debt repayment). Dividend policy signals are unclear from the disclosed data; future distributions will likely depend on stability of operating cash flows and visibility on non-operating items.

Risk Assessment

Business Risks:

• Cyclicality in advertising and production spending affecting project volumes and pricing
• Execution risks in content production and post-production timelines
• Dependence on hit-driven content and rights monetization
• Client concentration risk in media/advertising ecosystems
• Cost inflation in talent and production inputs pressuring margins
• Potential volatility from non-operating/extraordinary items influencing headline earnings

Financial Risks:

• Low asset turnover (0.211x) constraining ROE despite margin gains
• Working capital intensity; delays in collections could pressure OCF
• Uncertainty around capex and investing cash flows (undisclosed), obscuring FCF
• Potential mismatch between accounting profits and cash if non-operating gains are non-cash
• Concentration of equity capital (very high equity ratio) limiting capital efficiency

Key Concerns:

• Sustainability of profit uplift given reliance on non-operating/extraordinary gains this quarter
• Lack of visibility on investing cash flows and capex, limiting FCF assessment
• Headline metrics reported as zero (cash, equity ratio, shares) reflect disclosure gaps that limit per-share and liquidity analyses

Investment Implications

Key Takeaways:

• Core operations show improved margins and strong operating leverage
• Net income strength partly reflects non-operating/extraordinary gains
• Balance sheet is very conservative with low leverage and high liquidity
• OCF closely tracks net income, supporting earnings quality
• ROE remains modest at 3.02% due to low asset turnover and high equity base

Metrics to Watch:

• Operating margin and EBITDA margin excluding non-operating effects
• Order backlog/pipeline and utilization rates
• Receivables days and OCF/NI ratio to validate cash conversion
• Capex and investing cash flows to establish true FCF
• Capital allocation (buybacks/dividends) versus growth investment
• Composition of non-operating income and any extraordinary gains

Relative Positioning: Within Japanese media/content production peers, the company appears more conservatively capitalized with stronger liquidity and lower financial risk, but it exhibits lower ROE due to an equity-heavy balance sheet and relatively low asset turnover. Profit growth outpaced peers likely due to operating leverage and non-operating tailwinds; sustainability will depend on core margin retention and cash conversion.

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