KADOYA SESAME MILLS INCORPORATED FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥20.61B
• Operating Income: ¥2.46B
• Net Income: ¥1.40B
• EPS: ¥183.73

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

Kadoya Seiyu (TSE:2612) delivered solid H1 FY2026 (Q2 YTD) results under JGAAP on a consolidated basis, with revenue of ¥20.6bn (+4.8% YoY) and operating income of ¥2.46bn (+22.2% YoY), indicating clear positive operating leverage. Gross profit reached ¥5.34bn, equating to a gross margin of 25.9%, while operating margin expanded to 11.9%, reflecting effective cost control and/or improved price-mix. Ordinary income (¥2.49bn) slightly exceeded operating income, implying modest non-operating gains. Net income rose 20.5% to ¥1.69bn, with a net margin of 8.2% and an inferred effective tax rate of ~27.9% (¥655m tax on ~¥2.35bn pre-tax). DuPont analysis yields an ROE of 4.68% based on the provided decomposition, driven by moderate asset turnover (0.465x) and low financial leverage (1.23x), consistent with a conservative balance sheet. The company exhibits a very strong liquidity position: current ratio ~505%, quick ratio ~463%, and working capital of ¥24.35bn. Solvency appears robust with total liabilities of ¥8.27bn against equity of ¥36.12bn; the implied equity ratio is approximately 81.5% (despite the reported field being 0.0%, which is an unreported item). Operating cash flow was ¥913m, resulting in an OCF/Net income ratio of 0.54, suggesting earnings outpaced cash conversion this half, likely due to working capital movements. Financing cash outflow of ¥922m indicates distributions to shareholders and/or debt reduction; however, dividend data for the period is not disclosed (DPS and payout show as zero, which should be treated as undisclosed rather than zero). EBITDA was ¥3.02bn, with a margin of 14.6%, and D&A totaled ¥563m, indicating manageable capital intensity. Interest expense is shown as zero (unreported), but with low leverage, interest burden is likely minimal. Given the H1 nature of the data, seasonality and procurement timing can affect cash flows and margins; nonetheless, the margin resilience and leverage of the business model appear intact. Overall, Kadoya enters the second half with improved profitability, strong liquidity, and low leverage, though near-term cash flow quality bears monitoring due to working capital. Data limitations (notably cash balance, investing cash flow, equity ratio field, share count, and dividend details) constrain full assessment of capital allocation and FCF coverage, but available non-zero data support a picture of healthy operations and a conservative balance sheet.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 8.20%
• asset_turnover: 0.465
• financial_leverage: 1.23
• calculated_ROE: 4.68%
• commentary: ROE is primarily driven by margins rather than leverage, with modest asset turnover typical for a branded condiments/oils business. Low leverage caps ROE but enhances stability. margin_quality:
• gross_margin: 25.9%
• operating_margin: 11.9%
• ordinary_margin: 12.1%
• net_margin: 8.2%
• insights: Operating income grew 22.2% on 4.8% revenue growth, implying SG&A efficiency and/or successful price pass-through. Ordinary income slightly above operating income indicates minor net non-operating gains. operating_leverage: Strong positive operating leverage evidenced by operating income growth outpacing revenue (+22.2% vs +4.8%). This suggests scale benefits and/or pricing actions more than offsetting cost inflation. tax_rate: Approx. 27.9% (income tax ¥655m on estimated pre-tax income of ~¥2,346m).

Growth Assessment

revenue_sustainability: Revenue growth of +4.8% YoY appears steady, likely supported by price adjustments and resilient domestic demand for sesame oil and related products. Sustainability will hinge on consumer demand, competitive pricing, and ability to maintain price-cost spread amid input volatility. profit_quality: Profit growth is quality-improving given margin expansion and limited reliance on non-operating items (ordinary income ~¥30m above operating income). EBITDA margin at 14.6% and operating margin at 11.9% indicate solid underlying economics. outlook: Assuming stable input costs and continued pricing discipline, margins should remain resilient into H2. Key external variables include sesame seed procurement costs, FX (yen/USD), and potential shifts in retail channels or private-label competition.

Financial Health

liquidity:

• current_ratio: 504.6%
• quick_ratio: 463.0%
• working_capital: ¥24,351m
• commentary: Very strong liquidity with substantial buffers relative to short-term obligations. solvency:
• total_liabilities: ¥8,271m
• total_equity: ¥36,123m
• debt_to_equity: 0.23x (using total liabilities as proxy)
• equity_ratio_implied: 81.5% (Total equity / Total assets)
• commentary: Low leverage and high equity cushion reduce financial risk; reported equity ratio field is unreported (0.0%) but implied metric shows strong solvency. capital_structure: Conservative, equity-heavy structure consistent with stable food business; limited financial leverage suggests low interest burden and ample capacity for downturns.

Cash Flow Quality

earnings_quality: OCF/Net income at 0.54 indicates earnings outpaced cash conversion in H1, likely due to working capital build (e.g., inventory procurement, receivables timing) and tax payments. Needs monitoring to ensure normalization over the full fiscal year. FCF_analysis: Free cash flow is not assessable due to undisclosed investing cash flow (reported as zero). With positive OCF of ¥913m and unknown capex, underlying FCF direction is indeterminate this period. working_capital: Inventories at ¥2,505m and strong current asset base suggest procurement and inventory policies can materially influence period OCF. Without prior-period comps, we cannot quantify turns, but the liquidity cushion mitigates near-term risk.

Dividend Sustainability

payout_ratio_assessment: Payout and DPS are undisclosed in this dataset (zeros are placeholders). EPS is ¥183.73 for H1, implying robust interim earnings capacity. FCF_coverage: Not measurable this period due to undisclosed investing cash flow; OCF is positive, but distributions (Financing CF -¥922m) may include dividends and/or share repurchases or debt service. policy_outlook: Given the conservative balance sheet and recurring profitability, the company appears positioned to sustain shareholder returns; however, explicit dividend policy and H1 dividend decisions are not provided here.

Risk Assessment

Business Risks:

• Input cost volatility for sesame seeds and edible oils.
• Foreign exchange risk affecting imported raw materials (USD/JPY).
• Ability to pass through cost increases to retail and foodservice customers.
• Competition from private-label and larger edible oil makers.
• Consumer demand shifts and down-trading in a deflationary environment.
• Supply chain disruptions or geopolitical constraints in sesame seed–producing regions.
• Food safety, quality control, and reputation risks.
• Natural disasters affecting production or logistics in Japan.

Financial Risks:

• Working capital swings leading to OCF volatility (as seen with OCF/NI at 0.54).
• Potential inventory valuation risks amid price fluctuations.
• FX-driven margin compression if costs rise faster than pricing actions.
• Uncertain capex profile due to undisclosed investing cash flows.
• Dividend and capital return outflows (Financing CF -¥922m) potentially exceeding OCF in certain periods if OCF is temporarily soft.

Key Concerns:

• H1 cash conversion lag versus earnings.
• Exposure to raw material and FX volatility impacting gross margin.
• Data gaps (investing CF, cash balance, DPS) limiting visibility on capital allocation and FCF coverage.

Investment Implications

Key Takeaways:

• Margin expansion with strong operating leverage: OI +22.2% on sales +4.8%.
• Solid profitability profile: GM 25.9%, OP margin 11.9%, EBITDA margin 14.6%.
• Robust balance sheet: implied equity ratio ~81.5%, D/E ~0.23x.
• Positive OCF (¥913m) but sub-1.0x OCF/NI warrants monitoring.
• Financing outflows of ¥922m suggest active shareholder returns and/or debt service, details undisclosed.

Metrics to Watch:

• Gross margin and price–cost spread versus sesame seed procurement costs.
• OCF/Net income and working capital metrics (inventory and receivable days).
• Capex and investing cash flows to gauge FCF and maintenance needs.
• FX rates (USD/JPY) and hedging effectiveness.
• Operating margin trajectory in H2 and full-year guidance updates.
• Dividend announcements and payout policy clarity.

Relative Positioning: Within Japan’s edible oils space, Kadoya’s sesame oil niche typically supports above-average margins and a conservative capital structure versus diversified peers. The company’s low leverage and strong liquidity provide resilience, while growth is more contingent on pricing discipline and brand strength than on volume-led expansion.

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