| Metric | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥5542.5B | ¥5308.8B | +4.4% |
| Operating Income / Operating Profit | ¥170.3B | ¥192.8B | -11.7% |
| Ordinary Income | ¥160.3B | ¥180.9B | -11.4% |
| Net Income / Net Profit | ¥205.3B | ¥88.5B | +131.9% |
| ROE | 9.2% | 4.5% | - |
For the fiscal year ended March 2026, Revenue was ¥5542.5B (YoY +¥233.7B, +4.4%), Operating Income was ¥170.3B (YoY -¥22.5B, -11.7%), Ordinary Income was ¥160.3B (YoY -¥20.6B, -11.4%), and Net Income attributable to owners of the parent was ¥205.3B (YoY +¥116.8B, +131.9%). While the company delivered revenue growth but operating profit decline, Net Income rose substantially due to recognition of Special Gains of ¥234.0B, chiefly fixed asset disposal gains of ¥231.7B. Revenue growth was driven by expanded overseas operations (Asia sales +25%) and steady domestic performance, but gross margin fell to 13.5%, down ~0.6pt year-on-year, and operating margin declined 0.6pt to 3.1%, indicating weakening underlying earning power. Non-operating expenses included interest expense ¥31.0B (YoY +135%), increasing interest burden and pressuring the ordinary income level. Excluding special gains, the underlying performance shows a downtrend; EPS of ¥254.41 is up YoY +92.5% but largely driven by one-off gains. Versus full-year guidance (Revenue ¥5900B, Operating Income ¥190B, Ordinary Income ¥180B, Net Income ¥120B), the company achieved 94% of sales and ~90% of operating/ordinary income targets, while Net Income exceeded guidance at >171% due to one-time gains.
[Revenue] Revenue of ¥5542.5B (+4.4%) achieved growth. By region, domestic was ¥3894.4B (YoY -0.8%) slightly down, while Asia ¥948.9B (+25.4%) and Europe & others ¥699.3B (+11.4%) drove overseas expansion. By segment, Global Oils & Processed Oils expanded to ¥1509.5B (+19.3%), and the subtotal of Oils & Oilseeds and Processed Foods & Ingredients was ¥3952.4B (+0.1%) roughly flat; Fine Chemicals was ¥165.2B (+3.1%). Within Oils & Oilseeds and Processed Foods & Ingredients, Oils & Oilseeds was ¥3170.4B (-0.2%) slightly down, and Processed Foods & Ingredients ¥782.0B (+0.3%) slightly up. Domestic performance lagged due to delayed price pass-through and intense competition, while overseas benefited from increased Asian production capacity and FX effects.
[Profitability] Cost of goods sold was ¥4794.6B yielding gross profit ¥747.9B; gross margin of 13.5% declined ~0.6pt from 14.1% in the prior year. Material market conditions, mix deterioration, and the commodity-like nature of the Oils & Oilseeds business were evident. SG&A was ¥577.6B (SG&A ratio 10.4%), up ¥22.6B YoY but grew in line with revenue, improving ratio by ~0.1pt. Consequently, Operating Income was ¥170.3B (Operating margin 3.1%), down 11.7% YoY. By segment operating income: Global Oils & Processed Oils ¥47.7B (-8.9%, margin 3.2%), Oils & Oilseeds ¥67.1B (-16.9%, margin 2.1%), Processed Foods & Ingredients ¥44.2B (-5.3%, margin 5.6%), Fine Chemicals ¥15.6B (-1.9%, margin 9.4%). High value-added Fine Chemicals and Processed Foods & Ingredients maintained margins in the 5–9% range, but the core Oils & Oilseeds business at 2.1% dragged down the company average. Non-operating items included interest income ¥2.5B, dividend income ¥4.7B, equity-method income ¥16.2B, offset by interest expense ¥31.0B (YoY +135%) causing a sharp rise in interest burden; forex gains reversal of ¥1.9B and other factors worsened non-operating results. Ordinary Income was ¥160.3B (-11.4%). Special gains totaled ¥234.0B (of which fixed asset disposal gains ¥231.7B) and special losses ¥42.4B (impairment losses ¥30.9B, loss on retirement of fixed assets ¥6.7B, etc.), producing Profit Before Tax ¥351.9B. After income taxes ¥107.1B and non-controlling interests ¥5.0B, Net Income attributable to owners of the parent was ¥205.3B (+131.9%). In summary, revenue up but operating profit down; the bottom-line increase was largely due to one-off items.
Global Oils & Processed Oils: Revenue ¥1509.5B (+19.3%), Operating Income ¥47.7B (-8.9%, margin 3.2%). Revenue growth was driven by expanded overseas production capacity and FX, but increased depreciation and higher operating costs lowered margins. Oils & Oilseeds and Processed Foods & Ingredients (subtotal): Revenue ¥3952.4B (+0.1%), Operating Income ¥111.2B (-12.7%, margin 2.8%), accounting for ~65% of consolidated operating income. Within that, Oils & Oilseeds revenue ¥3170.4B (-0.2%), Operating Income ¥67.1B (-16.9%, margin 2.1%) suffered from delayed commodity price pass-through and intensified domestic competition. Processed Foods & Ingredients: Revenue ¥782.0B (+0.3%), Operating Income ¥44.2B (-5.3%, margin 5.6%) maintained relatively higher profitability. Fine Chemicals: Revenue ¥165.2B (+3.1%), Operating Income ¥15.6B (-1.9%, margin 9.4%) achieved the highest margins, supported by value-added products such as cosmetic ingredients. Other businesses: Revenue ¥140.0B (+0.6%), Operating Income ¥5.2B (-28.1%, margin 3.7%). Overall, high value-added areas (Fine Chemicals, Processed Foods & Ingredients) delivered stable margins, but the large-scale Oils & Oilseeds low profitability structurally depresses consolidated margins.
[Profitability] ROE 9.2% is composed of Net Profit Margin 3.7% × Total Asset Turnover 1.23x × Financial Leverage 2.03x; ROE improved from 7.0% last year due to higher net profit margin from special gains, but underlying profitability weakened. Operating margin 3.1%, EBITDA margin 5.2% (EBITDA ¥285.7B = Operating Income ¥170.3B + Depreciation ¥115.7B) both declined from prior year. Underlying net profit margin (excluding special gains) is estimated in the ~2% range, implying ROE would fall to the 6% range. Equity Ratio is 49.2% with financial leverage in an appropriate range.
[Cash Quality] Operating Cash Flow / Net Income ratio 0.44x and Operating Cash Flow / EBITDA ratio 0.37x are low, indicating weak cash conversion of earnings. Inventory days 89 days (Inventories ¥1,174.3B ÷ Cost of Goods Sold × 365), and days sales outstanding 63 days indicate working capital expansion.
[Investment Efficiency] Total Asset Turnover 1.23x, Fixed Asset Turnover 4.16x. CAPEX ¥292.8B expanded to 2.53x depreciation ¥115.7B, prioritizing growth investment and resulting in slim Free Cash Flow of ¥6.3B. ROIC 4.2% (NOPAT ÷ (Total Assets − Cash − Current Liabilities)) indicates substantial room for improvement.
[Financial Soundness] Current Ratio 233.8%, Quick Ratio 129.0% indicate good short-term payment capacity. Total interest-bearing debt ¥827.3B (short-term borrowings ¥176.1B + long-term borrowings ¥651.2B + corporate bonds ¥250.0B − cash ¥193.9B = Net interest-bearing debt ¥633.4B), Debt/EBITDA 2.89x, Interest Coverage (EBIT / Interest Expense) 5.49x suggest financial safety is maintained, though rising interest burden is pressuring profits.
Operating Cash Flow was ¥104.6B, down 50.6% YoY. Starting from Profit Before Tax ¥351.9B, adjustments including depreciation ¥115.7B (add-back), impairment losses ¥30.9B, and non-cash special gains such as fixed asset disposal gains -¥231.7B resulted in subtotal operating cash of ¥169.0B. Working capital changes included inventories increase -¥97.1B, trade receivables decrease +¥23.8B, trade payables decrease -¥50.8B, where inventory buildup and accounts payable compression pressured cash. After income tax payments -¥42.5B, Operating Cash Flow was ¥104.6B. Investing Cash Flow was -¥98.3B: capital expenditures -¥292.8B were largely offset by proceeds from sale of fixed assets ¥210.9B, plus purchases of investment securities -¥2.7B, etc. Free Cash Flow was ¥6.3B (Operating CF ¥104.6B + Investing CF -¥98.3B), significantly down from ¥211.7B prior year, insufficient as a source for shareholder returns and debt repayment. Financing Cash Flow was ¥82.3B: increased long-term borrowings +¥250.0B and corporate bond issuance +¥100.0B expanded funding, while long-term borrowings repayment -¥60.6B, bond redemption -¥100.0B, dividend payments -¥57.5B, and share buybacks -¥100.1B were executed. Cash and cash equivalents increased ¥105.3B from beginning-of-period ¥144.2B to ending ¥249.5B, including FX impact +¥16.7B. Operating CF / Net Income 0.44x indicates deterioration in earnings quality, and normalization of inventory turnover and payable terms is an urgent priority.
Ordinary Income ¥160.3B vs. Special Gains ¥234.0B (fixed asset disposal gains ¥231.7B, gains on sale of investment securities ¥2.3B) led to Profit Before Tax ¥351.9B. Of Net Income ¥205.3B, over ~¥230B is attributable to one-off gains, with very low reproducibility. Recurring non-operating gains such as equity-method income ¥16.2B and dividend income ¥4.7B provided steady contribution, but interest expense ¥31.0B comprises the bulk of non-operating expenses ¥38.5B, indicating weak underlying earning power even at the ordinary level. Comprehensive income was ¥396.7B, well above Net Income ¥205.3B, with OCI adding ¥191.4B (foreign currency translation adjustments ¥85.1B, deferred hedge gains/losses ¥35.1B, valuation differences on available-for-sale securities ¥13.9B, etc.). Operating CF ¥104.6B vs. Net Income ¥205.3B gives Operating CF / Net Income ratio 0.51x, and accrual ratio (Net Income − Operating CF) / Total Assets is 2.2%, showing a divergence between profit and cash mainly driven by working capital such as inventory increases. Excluding one-off gains, the underlying Net Profit Margin is estimated in the 2% range and ROE in the 6% range; therefore, earnings quality warrants a cautious assessment regarding sustainability.
Full-year guidance: Revenue ¥5900B (+6.4%), Operating Income ¥190B (+11.6%), Ordinary Income ¥180B (+12.3%), Net Income ¥120B (EPS forecast ¥131.19), Dividend ¥30 (post stock-split basis). Versus actuals, Revenue ¥5542.5B / ¥5900B = 94.0%, Operating Income ¥170.3B / ¥190B = 89.6%, Ordinary Income ¥160.3B / ¥180B = 89.1% — below targets, whereas Net Income attributable to owners of the parent ¥205.3B / ¥120B = 171.1% significantly exceeded guidance. The outsized Net Income was driven by recognition of one-off fixed asset disposal gains ¥231.7B. Shortfalls at the operating and ordinary levels were mainly due to gross margin decline, inventory burdens, and higher interest costs; underlying earnings targets were not achieved. For next fiscal year, assuming one-off gains lapse, recovery depends on price pass-through and mix improvement to restore gross margin, normalization of inventory to improve cash efficiency, and realization of benefits from capital investments. The post-split dividend of ¥30 corresponds to ¥90 on a pre-split basis, indicating a policy to avoid a real dividend cut.
Annual dividend is ¥180 (interim ¥90, year-end ¥90, pre-split basis), total dividend amount ¥57.7B. A 1-for-3 stock split effective April 1, 2026 will make the FY2027 forecast dividend ¥30 (post-split basis, equivalent to ¥90 pre-split). The payout ratio versus Net Income ¥205.3B is 28.1%, which is low, but this includes one-off gains; on an underlying Net Income basis excluding special gains, the payout ratio would increase materially. Share buybacks of ¥100.1B were executed (per cash flow statement). Dividend ¥57.7B + share buybacks ¥100.1B = Total Return ¥157.8B, yielding a Total Return Ratio of 76.9% (on Net Income basis). Versus Operating CF ¥104.6B this is 151%, and against Free Cash Flow ¥6.3B, the returns were not funded by internal cash generation, requiring borrowings and asset sales. DOE (Dividend on Equity) is 2.6% (Total dividends ¥57.7B ÷ Equity ¥2,220.0B), around industry average. From a sustainability perspective, maintaining dividends will require recovery in Operating CF and inventory compression after the lapse of one-off gains.
Profitability deterioration risk: Gross margin 13.5% is depressed by the commodity-heavy Oils & Oilseeds business (margin 2.1%), and volatility in raw material markets plus delayed price pass-through could further compress operating margin of 3.1%. The YoY decline of 0.6pt in operating margin and 11.7% drop in operating income could continue.
Cash conversion risk: Operating CF / Net Income 0.44x and Operating CF / EBITDA 0.37x are low, with inventory days 89 and days sales outstanding 63 reflecting working capital expansion. Continued CAPEX of ¥292.8B (2.53x depreciation) with Free Cash Flow of only ¥6.3B will leave insufficient resources for dividends and buybacks, increasing reliance on external financing.
Rising interest burden risk: Interest expense ¥31.0B (YoY +135%) with increased interest-bearing debt ¥827.3B and rising rates have sharply increased interest payments, pressuring Ordinary Income. Debt/EBITDA 2.89x remains in an acceptable range, but with falling operating margins and weakened cash generation, fixed interest costs may amplify earnings volatility.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 3.1% | 5.0% (3.3%–8.4%) | -1.9pt |
| Net Profit Margin | 3.7% | 3.2% (1.9%–6.6%) | +0.5pt |
Operating margin trails industry median of 5.0% by 1.9pt, reflecting a disadvantage due to a commodity-heavy portfolio. Net profit margin exceeds the median due to one-off gains, but on an ordinary basis is in line with the industry.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 4.4% | 5.4% (1.0%–8.6%) | -1.0pt |
Revenue growth lags the industry median 5.4% by 1.0pt, reflecting domestic market maturity and early-stage overseas expansion.
※ Source: Company compilation
Vulnerability of underlying profitability and dependence on one-off gains: Operating margin 3.1% is 1.9pt below the industry median 5.0% and worsened 0.6pt YoY. The majority of Net Income ¥205.3B relies on fixed asset disposal gains ¥231.7B, and underlying Net Income is estimated at about ¥50B (Net Profit Margin ~1%). Operating and ordinary income were ~90% of full-year guidance, with gross margin decline and higher interest burden as structural issues. Expansion of high value-added areas (Fine Chemicals margin 9.4%, Processed Foods & Ingredients 5.6%) and improving mix away from commodity Oils & Oilseeds (2.1%) are keys to medium-term margin recovery.
Deterioration in cash conversion efficiency and funding concerns: Operating CF ¥104.6B (YoY -50.6%) vs. Net Income ¥205.3B yields Operating CF / Net Income 0.44x and Operating CF / EBITDA 0.37x, low levels. Inventory increase -¥97.1B and trade payables decrease -¥50.8B drove working capital deterioration; inventory days 89 indicate efficiency decline. With CAPEX ¥292.8B (2.53x depreciation) ongoing, Free Cash Flow ¥6.3B is thin, and dividends + share buybacks ¥157.8B were funded through borrowings and asset disposals. Going forward, restoring OCF via inventory compression and payable normalization and realizing CAPEX benefits are preconditions for sustainable shareholder returns and creditworthiness.
Overseas expansion and CAPEX have medium-term potential but require cautious near-term assessment: Asia sales +25.4% and tangible fixed assets in Asia ¥337.0B (YoY +27%) show capacity increases in Malaysia and elsewhere. Global Oils & Processed Oils revenue +19.3% is a growth driver, but with margin 3.2% the short-term burden of higher depreciation and operating costs depresses profits. Medium-term margin improvement is possible through utilization and scale effects; success depends on FX hedging and optimizing local sourcing. The post-split dividend policy (effectively maintained) and continued buyback posture demonstrate shareholder-return focus, but current Free Cash Flow cannot fully fund returns, so recovery of underlying earnings and cash generation is essential.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are compiled by the firm based on public financial statements and are provided for reference. Investment decisions are your responsibility; consult advisors as needed before making investment choices.