| Metric | Current Period | Previous-Year Period | YoY |
|---|---|---|---|
| Revenue | ¥84.7B | ¥87.0B | -2.6% |
| Operating Income | ¥4.3B | ¥4.7B | -9.2% |
| Ordinary Income | ¥5.0B | ¥5.1B | -1.8% |
| Net Income | ¥4.3B | ¥3.6B | +16.4% |
| ROE | 5.8% | 5.2% | - |
In Q1, the Company recorded lower revenue and lower operating and ordinary income, while Net Income (Net Income Attributable to Owners of the Parent) increased due to temporary factors. Revenue was ¥84.7B (-2.6% year on year), Operating Income was ¥4.3B (-9.2%), Ordinary Income was ¥5.0B (-1.8%), and Net Income was ¥4.3B (+16.4%). At the operating level, an increase in the SG&A expense ratio was a factor behind the decline in income; however, an increase in foreign exchange gains, the recognition of extraordinary income, and a lower effective tax rate boosted Net Income.
【Revenue】Revenue was ¥84.7B, down -2.6% year on year. By segment, the Soymilk Business was the core business, generating ¥74.4B and accounting for 87.8% of total revenue, while the Miso Business generated ¥3.0B (3.5%). Operating margins were relatively high in both segments, at 19.4% for the Soymilk Business and 23.4% for the Miso Business. The decline in revenue appears to have been affected by weaker demand in the Soymilk Business, which accounts for approximately 90% of revenue.
【Profit and Loss】Operating Income declined to ¥4.3B (-9.2% year on year). Although the cost of sales ratio improved to 71.9% (72.9% in the previous year), raising the gross margin to 28.1% (27.1% in the previous year, +1.0pt), this was offset by an increase in the SG&A expense ratio from 21.6% to 23.0% (+1.4pt). Ordinary Income remained nearly level with the previous year at ¥5.0B (-1.8%), as foreign exchange gains increased from ¥0.5B to ¥0.9B, boosting non-operating income. Net Income increased to ¥4.3B (+16.4%), supported by the recognition of ¥0.3B in extraordinary income, including gains on sales of investment securities and fixed assets, as well as a decline in the effective tax rate from 30.3% to 19.9%. Overall, the Company experienced lower revenue and lower income at the operating and ordinary income levels, while the increase in Net Income was supported by temporary factors.
Of the two disclosed segments, the Soymilk Business generated revenue of ¥74.4B and Operating Income of ¥14.4B (19.4% margin), while the Miso Business generated revenue of ¥3.0B and Operating Income of ¥0.7B (23.4% margin), making the Miso Business slightly more profitable in terms of margin. The combined Operating Income of the two segments reached ¥15.1B, while consolidated Operating Income was only ¥4.3B; the difference (approximately ¥10.8B) is considered attributable to corporate expenses, inter-segment eliminations, and other factors. The Soymilk Business accounts for approximately 90% of revenue, and demand trends in this business have a significant impact on overall Company performance.
【Profitability】The Operating Income margin was 5.1%, down 0.4pt from 5.4% in the previous year, primarily due to the increase in the SG&A expense ratio (21.6%→23.0%), while the Net Income margin improved by 0.8pt to 5.0% from 4.2% in the previous year.【Cash Quality】Although the Statement of Cash Flows has not been disclosed, accounts receivable decreased to ¥61.8B (¥63.0B in the previous year), while inventories increased to ¥12.4B (¥10.7B in the previous year, +16.0%), making the buildup of inventory a point requiring attention in terms of cash generation.【Investment Efficiency】ROE was 5.8%, and total asset turnover for Q1 was 0.302x (quarterly basis). Financial leverage (total assets/net assets) was high at 3.85x, indicating that ROE is supported by leverage.【Financial Soundness】The Equity Ratio was 26.0%, remaining at the same level as the previous year. The current ratio of 109.9% and quick ratio of 100.2% indicate minimum short-term payment capacity; however, the debt-to-equity ratio (total liabilities/net assets) was high at 2.85x, and the increase in short-term borrowings from ¥3.0B to ¥8.0B requires monitoring.
As individual items in the Statement of Cash Flows have not been disclosed, cash trends are analyzed based on changes in the balance sheet. Cash and deposits were ¥35.1B, up +13.2% from ¥31.0B in the same period of the previous year. Accounts receivable were ¥61.8B, slightly down from ¥63.0B in the previous year, while inventories were ¥12.4B, up +16.0% from ¥10.7B in the previous year. Accounts payable were ¥43.6B, up +2.7% from ¥42.4B in the previous year. Property, plant and equipment was ¥126.3B, up +7.1% from ¥117.9B in the previous year, indicating that funding needs for capital expenditures remain ongoing. Meanwhile, short-term borrowings increased +166.7% from ¥3.0B to ¥8.0B, and long-term borrowings increased +7.4% from ¥55.6B to ¥59.8B, suggesting a growing reliance on borrowings as a source of funding for asset expansion. The working capital movements—an increase in inventories and a slight decrease in accounts receivable—suggest that funding for investment activities may be supplemented to a certain extent through external borrowings.
Current-period earnings comprise a mix of recurring and temporary factors, requiring caution in evaluating earnings quality. Of the ¥1.1B in non-operating income, foreign exchange gains accounted for ¥0.9B, increasing from ¥0.5B in the previous year and supporting Ordinary Income. The ¥0.3B in extraordinary income consisted of temporary gains, including a ¥0.1B gain on sales of investment securities and a ¥0.1B gain on sales of fixed assets, and does not represent recurring income based on operating activities. In addition, the decline in the effective tax rate from 30.3% in the previous year to 19.9% also contributed to the increase in Net Income; excluding tax-related factors and temporary items, the underlying increase in earnings is considered to be smaller. Comprehensive income was ¥3.7B, below Net Income of ¥4.3B, with the difference attributable to a foreign currency translation adjustment of -¥0.5B. The differing directions of foreign exchange gains in the income statement (transaction basis) and foreign currency translation adjustments in other comprehensive income (translation basis for overseas assets and other items) demonstrate the two-sided nature of foreign exchange sensitivity.
The Company has disclosed its full-year outlook, calling for revenue of ¥322.0B (-2.1% year on year), Operating Income of ¥4.8B (-43.6%), and Ordinary Income of ¥4.1B (-52.4%). Q1 progress rates were 26.3% for revenue, 88.6% for Operating Income, 123.8% for Ordinary Income, and 135.4% for Net Income, meaning that Ordinary Income and Net Income are already progressing at a pace exceeding the full-year plans. At the same time, the full-year plan anticipates a sharp year-on-year decline of more than 40% in both Operating Income and Ordinary Income, a significant difference from the Q1 declines of -9.2% in Operating Income and -1.8% in Ordinary Income. This difference may reflect a plan premised on further deterioration in profitability from the second half onward, or seasonal factors and temporary boosts specific to Q1. It would be useful to monitor quarterly progress going forward.
The dividend forecast was disclosed as ¥0 per share as of the end of Q1, and the full-year dividend plan remains undecided. The dividend paid in the previous fiscal year was ¥50 at year-end (¥0 interim). Although Q1 Net Income increased from the previous year to ¥4.3B, disclosure of the future dividend plan is awaited, taking into account performance trends.
Foreign Exchange Sensitivity: Foreign exchange gains included in non-operating income were ¥0.9B, equivalent to approximately 20.8% of Operating Income of ¥4.3B. Foreign exchange has a significant contribution to Ordinary Income, and the impact would be relatively large if such gains were to decrease.
Changes in Funding Structure: Short-term borrowings increased +166.7% from ¥3.0B in the same period of the previous year to ¥8.0B. With property, plant and equipment increasing +7.1%, reliance on borrowings is rising. In light of the debt-to-equity ratio (total liabilities/net assets) of 2.85x, interest rate trends require monitoring.
Changes in Working Capital: Inventories increased +16.0% from ¥10.7B in the same period of the previous year to ¥12.4B. The buildup of inventory amid declining revenue warrants attention from the perspective of inventory efficiency.
Profitability and Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 5.1% | – | – |
| Net Income Margin | 5.0% | – | – |
| No industry-median comparison data has been provided for the Company’s Operating Income margin or Net Income margin; therefore, the analysis is limited to assessing the absolute levels. |
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (Year on Year) | -2.6% | – | – |
| No industry-median comparison data has been provided for revenue growth; therefore, only the Company’s performance is reviewed. |
※Source: Compiled by the Company
Although the Company recorded lower revenue and lower income at the operating and ordinary income levels, Net Income increased due to temporary factors, including higher foreign exchange gains, the recognition of extraordinary income, and a lower effective tax rate. It is useful to assess earnings by separating recurring and temporary factors.
While the full-year plan anticipates a decline of more than 40% in Operating Income and more than 50% in Ordinary Income year on year, the declines in Q1 were smaller, and the progress rates for Ordinary Income and Net Income have already exceeded 100%. It is useful to continue checking consistency with quarterly progress going forward.
The substantial increase in short-term borrowings (+166.7%) and the increase in property, plant and equipment (+7.1%) indicate changes in capital expenditures and the funding structure. In conjunction with the high debt-to-equity ratio, it is meaningful to monitor changes in the capital structure.
This report is an earnings analysis document automatically generated by AI based on XBRL financial results data. It does not recommend investment in any specific security. The 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, and you should consult a professional as necessary.
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These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.