| Metric | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥7722.9B | ¥6712.1B | +15.1% |
| Operating Income / Operating Profit | ¥298.2B | ¥115.1B | +159.1% |
| Profit Before Tax | ¥234.3B | ¥69.0B | +239.5% |
| Net Income / Net Profit | ¥115.1B | ¥53.9B | +113.6% |
| ROE | 4.7% | 2.6% | - |
For the fiscal year ended March 2026, Revenue was ¥7722.9B (YoY +¥1010.1B, +15.1%), Operating Income was ¥298.2B (YoY +¥183.1B, +159.1%), Ordinary Income was ¥199.0B (YoY +¥140.1B, +237.5%), and Net Income attributable to owners of the parent was ¥111.4B (YoY +¥74.8B, +188.4%), representing substantial increases across sales and profits. Revenue was driven by the Plant-based Fats & Oils Business (+30.7%) and the Industrial Chocolate Business (+10.8%). Gross margin improved to 14.4% (prior year 12.2%, +2.2pt), and operating margin improved to 3.9% (prior year 1.7%, +2.2pt). Non-operating items included financial expenses of ¥81.8B and an effective tax rate of approximately 51%, which pressured Net Income; however, fixed-cost absorption from revenue growth and cost-of-goods improvements yielded EPS of 129.60 yen (prior year 44.94 yen, +188.4%), a significant recovery.
[Revenue] Revenue of ¥7722.9B (+15.1%) comprised: Plant-based Fats & Oils Business ¥2710.8B (+30.7%), Industrial Chocolate Business ¥3709.0B (+10.8%), Emulsified & Fermentation Ingredients Business ¥974.3B (+3.4%), and Soy Processing Ingredients Business ¥328.7B (-5.9%). Plant-based Fats & Oils benefited from price revisions and volume recovery, and a subsidiary acquisition (goodwill +¥58.7B, +28.3% increase) contributed; Industrial Chocolate was driven by volume expansion in the U.S., Europe and Asia. Emulsified & Fermentation Ingredients saw slight growth, while Soy Processing Ingredients declined due to market deterioration and price competition. Foreign exchange translation effects of ¥65.7B (Operating CF statement) contributed positively.
[Profitability] Cost of sales was ¥6613.4B (85.6% of sales, prior year 87.8%), improving gross margin by -2.2pt to secure Gross Profit of ¥1109.4B (gross margin 14.4%). SG&A was ¥776.1B (10.0% of sales, prior year 10.6%), with fixed-cost growth lagging revenue growth, realizing positive operating leverage. Other expenses of ¥54.7B included impairment losses of ¥55.2B, resulting in Operating Income of ¥298.2B (+159.1%). Financial income was ¥15.5B versus financial expenses of ¥81.8B (interest paid ¥78.8B), producing a net financial result of -¥66.3B. Equity-method investment income was ¥2.4B, leading to Profit Before Tax of ¥234.3B. After income taxes of ¥119.2B (effective tax rate approx. 50.9%), Net Income was ¥115.1B (+113.6%), and Net Income attributable to owners of the parent was ¥111.4B (+188.4%), achieving both revenue and profit growth.
The Plant-based Fats & Oils Business posted Revenue ¥2710.8B (+30.7%) and Operating Income ¥333.9B (+24.7%), maintaining high profitability with an operating margin of 12.3%, and is the primary contributor to consolidated operating profit. The Industrial Chocolate Business posted Revenue ¥3709.0B (+10.8%) and Operating Income ¥23.9B (+116.9%), turning profitable, though its operating margin remains low at 0.6%. The Emulsified & Fermentation Ingredients Business posted Revenue ¥974.3B (+3.4%) and Operating Income ¥11.4B (-32.7%), with profitability declining to an operating margin of 1.2%. The Soy Processing Ingredients Business posted Revenue ¥328.7B (-5.9%) and an operating loss of -¥8.7B (prior year -¥8.2B), with operating margin -2.7% and continued struggles. While high margins in Plant-based Fats & Oils drive consolidated profit, low profitability in Industrial Chocolate and Soy Processing Ingredients constrains overall margin expansion.
[Profitability] ROE 5.0% (prior year 1.8%) rose substantially due to improved net profit margin but remains 1.0pt below the industry median of 6.0%. Operating margin 3.9% improved +2.2pt from 1.7% but is 1.1pt below the industry median 5.0%, with low-profit segments weighing on results. Net profit margin 1.5% (prior year 0.6%) improved +0.9pt but is 1.7pt below the industry median 3.2%. Financial expenses of ¥81.8B (1.1% of sales) and an effective tax rate of ~51% depress net profit margin. [Cash Quality] Operating Cash Flow (OCF) was ¥548.4B, approximately 4.8x Net Income ¥115.1B, supported by Depreciation & Amortization of ¥213.6B and working capital improvements. OCF/EBITDA (EBITDA = Operating Income + Depreciation = ¥511.8B) is about 1.07x, indicating healthy cash conversion. [Investment Efficiency] Total asset turnover was 1.21x (Revenue ¥7722.9B ÷ Total Assets ¥6369.3B), improved from 1.12x, with total assets up +6.7%—lagging revenue growth. ROIC approximately 3.1% (EBIT ¥298.2B ÷ Invested Capital ¥9607B, Invested Capital = Interest-bearing debt ¥6615B + Equity ¥2401B + Lease liabilities ¥127B) is below capital cost, indicating substantial room to improve capital efficiency. [Financial Soundness] Equity Ratio 37.7% (prior year 34.7%, +3.0pt) improved, but Debt/EBITDA approx. 4.64x (interest-bearing debt ¥2374B ÷ EBITDA ¥511.8B) shows high leverage, and Interest Coverage approx. 3.6x (EBIT ¥298.2B ÷ Financial expenses ¥81.8B) indicates cautious tolerance for interest burden. Current ratio approx. 140% (Current assets ¥3590.5B ÷ Current liabilities ¥2573.2B) provides a degree of safety, but with short-term borrowings of ¥1585.4B versus cash ¥468.1B, the liquidity buffer is limited at about 0.30x.
Operating Cash Flow improved substantially to ¥548.4B (prior year -¥488.3B), starting from Profit Before Tax ¥234.3B and Depreciation ¥213.6B, with working capital improvements: inventory increase -¥45.6B, trade receivables decrease ¥84.3B, and trade payables increase ¥133.7B. After corporate tax payments -¥132.3B and interest payments -¥81.9B, net operating cash flow was ¥548.4B. Investing Cash Flow was -¥468.5B, with capital expenditures -¥264.1B, acquisition of subsidiary shares -¥167.3B, and acquisition of affiliate shares -¥14.8B, reflecting continued active investment and resulting in Free Cash Flow of ¥79.9B. Financing Cash Flow was -¥385.9B, with net decrease in short-term borrowings -¥885.8B and long-term borrowings +¥649.2B as debt maturity was extended, and dividend payments -¥44.8B were made. Adding foreign exchange translation effects +¥65.7B, cash balance decreased to ¥468.1B (prior year ¥708.4B), a decline of -¥240.3B. Inventory days are high at approx. 100 days (Inventories ¥1820.3B ÷ Cost of Sales ¥6613.4B × 365), so inventory reduction is key to working capital improvement. The rise in trade payables provided a short-term cash boost, but risk exists of reversal next fiscal year reducing OCF.
Operating Income ¥298.2B and equity-method investment income ¥2.4B are recurring earnings, while Other Expenses ¥54.7B included impairment losses ¥55.2B which are one-off factors that depressed Net Income. Non-operating items showed financial income ¥15.5B versus financial expenses ¥81.8B, producing a net financial result of -¥66.3B, with interest paid ¥78.8B effectively a fixed cost. Non-operating income was limited in scope, and revenue dependence is high—indicating a generally sound revenue structure. OCF ¥548.4B is about 4.8x Net Income ¥115.1B; Accrual (Net Income - OCF) is about -¥433.3B, and accrual ratio approx. -6.9% indicates high accrual health. The divergence between Ordinary Income ¥199.0B and Net Income ¥115.1B is mainly due to income taxes ¥119.2B (effective tax rate ~50.9%) and impairment losses ¥55.2B; normalization of tax rate and reduction of one-off expenses could improve Net Profit margin next year. Comprehensive Income ¥385.5B included foreign currency translation differences on overseas operations of ¥237.2B, with forex valuation gains significantly exceeding Net Income and driving large comprehensive income.
For the fiscal year ending March 2027, company guidance projects Revenue ¥7540.0B (YoY -2.4%), Net Income attributable to owners of the parent ¥195.0B (YoY +75.0%), EPS 226.79 yen, and a dividend of 31.00 yen. While revenue is expected to decline slightly, substantial profit growth is planned assuming further gross margin improvement (stabilization of raw material prices and optimized pricing & mix), inventory and logistics efficiencies, and normalization of financial expenses and tax rate. Progress rate (FY2026 results / FY2027 plan) is Revenue 102.4% and Net Income 57.1%, indicating revenue achievement is ahead of schedule while profit is lagging relative to plan. The projected dividend of 31 yen is a cut from this year’s 52 yen, prioritizing cash preservation, but upside potential for dividends remains depending on progress in debt duration extension and working capital improvement.
Annual dividend was 52 yen (interim 26 yen, year-end 26 yen), with a payout ratio of approx. 40.1% (Total dividends ¥44.8B ÷ Net Income attributable to owners of the parent ¥111.4B), which is within a sustainable range. Total dividends ¥44.8B versus Free Cash Flow ¥79.9B gives FCF coverage about 1.78x, indicating headroom. Share buybacks were ¥4.2B (small), and Total Return Ratio is approx. 43.9% ((Dividends ¥44.8B + Buybacks ¥4.2B) ÷ Net Income ¥111.4B). Capital expenditures ¥264.1B are about 1.24x Depreciation ¥213.6B, reflecting a growth investment phase; balancing dividends and investments requires maintaining OCF and leverage control. Next fiscal year dividend guidance of 31 yen is conservative relative to planned profit growth, but depending on debt duration extension and inventory compression progress, there may be scope for dividend increases.
Delay in improving low-profit segments: Low margins in Industrial Chocolate (operating margin 0.6%), Emulsified & Fermentation Ingredients (1.2%), and Soy Processing Ingredients (-2.7%) may persist and cap consolidated operating margin at 3.9% (industry median 5.0%). High dependence on Plant-based Fats & Oils (12.3% margin) increases concentration risk.
High leverage and short-term debt dependency: Debt/EBITDA 4.64x and short-term borrowings ratio 66.7% (short-term borrowings ¥1585.4B ÷ interest-bearing debt ¥2374.2B) expose refinancing and interest-rate risks. Interest coverage approx. 3.6x and financial expenses ¥81.8B being effectively fixed costs weigh on net margin. Cash ¥468.1B ÷ short-term borrowings ¥1585.4B = approx. 0.30x, indicating limited liquidity buffer.
Inventory levels and working capital efficiency: Inventories ¥1820.3B (inventory days approx. 100 days) are high, posing obsolescence / valuation loss risks and continued capital tie-up. The sharp increase in trade payables (+¥215.4B, +46.3%) contributed to short-term cash improvement, but attention is needed for the risk of reversal next fiscal year and consequent OCF decline.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| ROE | 5.0% | 6.0% (2.6%–11.7%) | -1.0pt |
| Operating Margin | 3.9% | 5.0% (3.3%–8.4%) | -1.1pt |
| Net Profit Margin | 1.5% | 3.2% (1.9%–6.6%) | -1.7pt |
All profitability metrics are below industry medians, constrained by low-profit segments and high financial/tax burdens.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 15.1% | 5.4% (1.0%–8.6%) | +9.7pt |
Revenue growth outperformed the industry median by +9.7pt, driven by expansion in Plant-based Fats & Oils and Chocolate and contributions from M&A.
※ Source: Company compilation
Rapid margin recovery from cost improvements and operating leverage: Gross margin 14.4% (+2.2pt) and operating margin 3.9% (+2.2pt) improved notably, with high cash generation OCF ¥548.4B (OCF / Net Income 4.8x). The high-margin Plant-based Fats & Oils Business (operating margin 12.3%) led improvements, aided by price pass-through and raw material cost stabilization. Although a slight revenue decline is planned next year, large profit increases are expected as cost rationalization and quality of earnings improvement progress.
Room to improve low-profit segments and capital efficiency: Improving Industrial Chocolate (operating margin 0.6%), Emulsified & Fermentation Ingredients (1.2%), and Soy Processing Ingredients (-2.7%) is key to expanding consolidated margins. ROIC approx. 3.1% is below capital costs; inventory compression (inventory days approx. 100) and extending debt maturities (short-term borrowings ratio 66.7%) would be catalysts for capital efficiency improvement. Increases in goodwill and intangibles (goodwill +28.3%, intangibles +26.8%) show expansion of growth investments, but monitoring for future impairment risk is required.
This report is an AI-generated financial analysis document created by analyzing XBRL financial statement data. It does not constitute a recommendation to invest in specific securities. Industry benchmarks are reference information compiled by the Company from public financial statements. Investment decisions are your responsibility; please consult professionals as needed.