UNICAFE INC. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥11.49B
• Operating Income: ¥565M
• Net Income: ¥269M
• EPS: ¥29.32

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

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

For FY2025 Q3 (cumulative), Unicafe delivered strong top- and bottom-line growth with Revenue of ¥11,492 million (+22.8% YoY), Operating income of ¥565 million (+47.7% YoY), and Net income of ¥392 million (+46.1% YoY). Profitability improved across the P&L, with Gross profit of ¥2,095 million implying a gross margin of 18.2%, and an operating margin of 4.9% (¥565m/¥11,492m). Ordinary income equaled operating income (¥565 million), indicating non-operating items were broadly neutral aside from modest interest expense of ¥12 million. Net profit margin reached 3.41%, supporting a DuPont ROE of 5.75% based on asset turnover of 0.802x and financial leverage of 2.10x. The improvement in operating profit outpaced revenue growth, suggesting positive operating leverage from SG&A discipline and/or effective price pass-through amid higher volumes or better mix. Liquidity is sound, with a Current ratio of 136.5% and Quick ratio of 128.5%, supported by working capital of ¥2,302 million. The capital structure appears conservative: Total equity of ¥6,813 million against Total assets of ¥14,322 million implies an equity ratio of ~47.6% (versus the reported 0.0% which is undisclosed), and liabilities of ¥7,649 million imply a debt-to-equity of 1.12x. Interest coverage is robust at 45.8x (operating income/interest expense), indicating low near-term refinancing risk. Inventory at period-end was ¥505 million; relative to cost of sales of ¥7,262 million, this implies a rough inventory turnover of ~14.4x (using period-end balance) and about 25 days on hand, signaling efficient inventory management for a commodity-linked business. Cash flow statement items, DPS, and share counts are not disclosed in this dataset, so cash conversion, FCF coverage, and per-share capital metrics cannot be verified from the provided figures. Nevertheless, earnings capacity appears stronger YoY, supported by improved margins and disciplined costs. The company’s exposure to green coffee prices and USD/JPY FX remains a key driver of gross margin, but the current quarter suggests effective procurement and pricing activities. Tax expense of ¥110 million implies an indicative effective tax rate in the high-teens to low-20s (approximation due to missing pre-tax income detail under JGAAP). Overall, profitability momentum, adequate liquidity, and modest leverage underpin a stable financial profile. Data gaps (cash flow, dividends, share count) limit the robustness of dividend and cash flow quality assessments, so monitoring subsequent disclosures is important.

Profitability Analysis

ROE decomposes to 5.75% = 3.41% net margin × 0.802x asset turnover × 2.10x leverage. Net margin of 3.41% improved alongside operating income growth outpacing sales, evidencing better operating efficiency and/or pricing power. Gross margin of 18.2% (¥2,095m/¥11,492m) reflects favorable procurement and pricing; stability here is critical given coffee bean price and FX volatility. Operating margin of 4.9% indicates SG&A discipline and operating leverage as sales scale; operating income increased 47.7% vs. revenue +22.8%. Ordinary income equals operating income, suggesting limited non-operating drag; interest expense was modest at ¥12 million. Interest coverage is strong at 45.8x (¥565m/¥12.348m), implying earnings resilience to rate movements. The margin structure indicates medium sensitivity to gross margin swings; each 1ppt change in gross margin equates to ~¥115 million at current run-rate, materially impacting operating profit. Asset turnover at 0.802x indicates reasonable asset efficiency for a processing/distribution model; further improvement would lift ROE even without higher leverage. Overall, profitability quality improved QoQ/YoY with positive operating leverage, but remains sensitive to commodity cost and FX pass-through effectiveness.

Growth Assessment

Revenue grew 22.8% YoY to ¥11,492 million, driven by likely volume recovery and/or price pass-through amid elevated green coffee costs (exact drivers not disclosed). Operating income rose 47.7% to ¥565 million, indicating margin expansion from scale benefits and SG&A control. Net income increased 46.1% to ¥392 million, broadly tracking operating improvement, with non-operating items neutral. The spread between revenue growth and operating income growth implies sustainable operating leverage if demand and pricing hold; however, commodity price normalization could compress price-driven sales growth. Gross profit of ¥2,095 million and an 18.2% margin suggest effective procurement and hedging; durability depends on FX (USD/JPY) and ICE coffee price trends. Ordinary income equaling operating income indicates limited reliance on financial income for growth. With asset turnover at 0.802x, capacity utilization appears healthy; incremental growth should support further efficiency if working capital is well-managed. Outlook hinges on the company’s ability to maintain price pass-through to retail and foodservice channels and defend volumes in a slowing consumer environment; no quantitative guidance provided in the dataset. Given the YoY step-up and strong interest coverage, near-term earnings trajectory is favorable, but sensitive to input cost volatility.

Financial Health

Liquidity is sound: Current assets of ¥8,616 million vs. current liabilities of ¥6,314 million yield a Current ratio of 1.36x and Quick ratio of 1.29x, providing cushion for working capital needs. Working capital stands at ¥2,302 million. Solvency is solid: Total liabilities of ¥7,649 million vs. equity of ¥6,813 million imply a debt-to-equity of 1.12x, while equity as a share of assets is approximately 47.6% (¥6,813m/¥14,322m). Financial leverage for DuPont purposes is 2.10x (assets/equity), moderate for the sector. Interest coverage at 45.8x indicates low refinancing and interest-rate risk at current earnings. The liability structure details (short- vs long-term debt, lease obligations) are not disclosed here, but the strong coverage and equity buffer suggest manageable solvency risk. Cash and equivalents were not disclosed in this dataset, so absolute liquidity headroom cannot be quantified.

Cash Flow Quality

Cash flow statement line items (operating, investing, financing cash flows) are undisclosed in this dataset, so OCF/NI, FCF, and cash conversion cannot be assessed. The reported OCF/NI ratio of 0.00 and FCF of 0 reflect non-disclosure rather than actual zero values. Earnings quality appears supported by core operations given ordinary income matches operating income and interest expense is small; however, without working capital and depreciation details, we cannot validate cash realization. Depreciation and amortization were not disclosed; EBITDA metrics are therefore not available. Inventory at period-end of ¥505 million versus cost of sales of ¥7,262 million implies a rough turnover of ~14.4x (using period-end balance), suggesting efficient inventory management; positive for cash conversion if sustained. Key to watch is the timing of price pass-through vs. inventory revaluation, which can temporarily inflate or depress gross margins and OCF.

Dividend Sustainability

Dividend per share (DPS), payout ratio, and FCF coverage are not disclosed in the provided data; the reported zeros indicate non-disclosure. EPS is ¥29.32 for the period, and net income totals ¥392 million, which would generally provide capacity for distributions; however, sustainability must be evaluated against OCF and capex, neither of which is available. With leverage moderate (equity ratio ~47.6%) and interest coverage strong (45.8x), the balance sheet could support dividends if the company prioritizes them, but policy and historical payout trends are not provided. Until cash flow data is available, dividend affordability and coverage cannot be confirmed. Policy outlook therefore remains indeterminate from the provided figures; monitor upcoming disclosures for DPS announcements and cash flow detail.

Risk Assessment

Business Risks:

• Commodity price volatility in green coffee beans impacting gross margins.
• FX risk (primarily USD/JPY) affecting import costs and pricing.
• Pass-through timing risk to retail and foodservice customers during input cost swings.
• Demand elasticity amid consumer spending fluctuations and private-label competition.
• Supply chain and origin risks (harvest conditions, logistics, geopolitical factors in coffee-producing countries).
• Customer concentration risk if large retail chains account for a significant share of sales (not disclosed).
• Hedging effectiveness risk and potential basis risk between physical and financial hedges.

Financial Risks:

• Working capital swings (green coffee price cycles) potentially impacting OCF.
• Interest rate and credit spread changes, albeit mitigated by high interest coverage.
• FX translation and transaction losses if hedging is imperfect.
• Potential covenant constraints (not disclosed) if earnings volatility spikes.
• Inventory valuation risk during rapid commodity price changes.

Key Concerns:

• Lack of cash flow disclosure limits assessment of earnings-to-cash conversion.
• Dividend policy and actual DPS not disclosed, constraining payout analysis.
• Sensitivity of margins to commodity and FX movements despite current strength.

Investment Implications

Key Takeaways:

• Strong YoY performance: revenue +22.8%, operating income +47.7%, net income +46.1%.
• Margin expansion: gross margin 18.2%, operating margin 4.9%, indicating positive operating leverage.
• ROE at 5.75% driven by 3.41% net margin, 0.802x asset turnover, and 2.10x leverage.
• Robust interest coverage at 45.8x and moderate leverage (equity ratio ~47.6%).
• Inventory efficiency appears solid (~25 days using period-end), supportive of cash conversion.
• Data gaps (cash flows, DPS, share count) require caution in cash and dividend assessments.

Metrics to Watch:

• Gross margin trajectory vs. green coffee prices and USD/JPY.
• SG&A ratio to sales and operating margin sustainability.
• Working capital metrics: inventory days, receivable days, payable days (when disclosed).
• OCF and FCF versus net income once cash flows are reported.
• Revenue mix by channel and pricing pass-through cadence (if disclosed).
• ROE components: asset turnover improvements and leverage stability.

Relative Positioning: Within Japanese beverage and food ingredient peers, Unicafe presently shows improving profitability with conservative leverage and strong interest coverage; sustained margin control and effective commodity/FX management will be key differentiators versus peers with higher volatility or weaker pass-through.

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