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.
| Metric | Current Period | Same Period Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥8342.5B | ¥5989.0B | +39.3% |
| Operating Income | ¥283.2B | ¥120.1B | +135.8% |
| Equity in Earnings of Affiliates | ¥140.6B | ¥108.0B | +30.1% |
| Profit Before Tax | ¥411.2B | ¥249.5B | +64.8% |
| Net Income | ¥323.6B | ¥219.5B | +47.4% |
| ROE | 2.7% | 1.9% | - |
The quarter was characterized by double-digit earnings growth driven by substantial revenue growth and improved operating leverage, while Operating Cash Flow (OCF) turned negative due to deterioration in working capital. Revenue was ¥8,342.5B (+39.3% YoY), Operating Income was ¥283.2B (+135.8% YoY; the Operating Margin improved to 3.4% from 2.0% in the previous year, a +139bp improvement), and Profit Before Tax was ¥411.2B (+64.8% YoY). Consolidated Net Income was ¥323.6B (+47.4% YoY), of which Net Income attributable to owners of the parent was ¥302.2B (+43.4% YoY). The primary drivers of revenue growth were the expansion of business flows in the Energy & Social Infrastructure and Chemicals segments, while the improvement in the SG&A ratio (10.0% versus 11.7% in the previous year) supported earnings growth.
【Revenue】Revenue was ¥8,342.5B, up +39.3% YoY. By segment, Energy & Social Infrastructure showed the highest growth rate at ¥1,910.8B (¥676.3B in the previous year, +182.5%), followed by Chemicals at ¥1,901.1B (+32.6% YoY) and Metals, Mineral Resources & Recycling at ¥1,318.1B (+50.1% YoY). Meanwhile, the Lifestyle & Agri Business segment recorded a decline in revenue to ¥1,013.6B (-7.0% YoY). The sharp expansion of Energy & Social Infrastructure led overall revenue growth.
【Profit and Loss】Gross Profit was ¥1,113.5B (gross margin of 13.3%, slightly down from 13.7% in the previous year). SG&A expenses were ¥830.2B (SG&A ratio of 10.0%, improved from 11.7% in the previous year), resulting in positive operating leverage and Operating Income of ¥283.2B (Operating Margin of 3.4%, a +139bp improvement from 2.0% in the previous year). Profit Before Tax was ¥411.2B (+64.8% YoY), with Equity in Earnings of Affiliates of ¥140.6B accounting for 34.2% and contributing to the increase. Financial Income of ¥82.4B versus Financial Expenses of ¥93.7B resulted in a net expense of ▲¥11.3B, indicating an increase in interest burden. Consolidated Net Income was ¥323.6B (+47.4% YoY), while Net Income attributable to owners of the parent was ¥302.2B (+43.4% YoY). Both revenue and earnings increased.
On a Net Income attributable to owners of the parent basis, Chemicals was the largest contributing segment at ¥110.5B, representing an +89.5% increase from ¥58.3B in the previous year. Energy & Social Infrastructure recorded ¥68.6B (¥43.7B in the previous year, +57.0%), while Retail & Consumer Services posted significant earnings growth to ¥43.1B (¥9.1B in the previous year). Aviation & Transportation Infrastructure remained solid at ¥33.9B (¥30.7B in the previous year, +10.5%), whereas Lifestyle & Agri Business declined to ¥26.5B (¥34.5B in the previous year, ▲23.2%) and Metals, Mineral Resources & Recycling declined to ¥21.3B (¥31.0B in the previous year, ▲31.3%). Automotive remained loss-making at ▲¥3.4B (▲¥4.5B in the previous year), although the loss narrowed. Profit concentration in Chemicals and Energy has increased, while declining earnings in resource-related segments have somewhat weakened the portfolio’s diversification effect.
【Profitability】The Operating Margin improved to 3.4% from 2.0% in the previous year, a +139bp improvement, while the gross margin declined slightly to 13.3% from 13.7%. The consolidated Net Margin improved modestly to 3.9% from 3.7%, while the margin based on Net Income attributable to owners of the parent improved slightly to 3.6% from 3.5%.【Cash Flow Quality】OCF was ▲¥572.8B, substantially below Net Income of ¥323.6B, indicating a widening divergence between earnings and cash flow.【Investment Efficiency】ROE was 2.7% (based on Net Income attributable to owners of the parent), while Equity in Earnings of Affiliates accounted for 34.2% of Profit Before Tax, indicating a certain level of reliance on earnings from partners in the trading company business.【Financial Soundness】The Equity Ratio improved to 30.7% from 29.9% in the previous year. Interest-bearing debt (total bonds and borrowings) was ¥14,205.2B, and the ratio to equity attributable to owners of the parent of ¥11,447.2B was approximately 1.24x, slightly higher than approximately 1.19x in the same period of the previous year.
Cash Flow from Operating Activities was ▲¥572.8B (▲¥7.3B in the previous year), substantially below Net Income of ¥323.6B. Even at the subtotal level before changes in working capital, cash flow was already negative at ▲¥546.1B, primarily due to a decrease in trade payables (accounts payable and other items) of ▲¥1,124.8B and an increase in inventories of ▲¥136.0B. Cash Flow from Investing Activities was ▲¥419.2B, reflecting the continuation of strategic investments, including acquisitions of investments of ▲¥469.5B. Cash Flow from Financing Activities was +¥935.7B, with financing through long-term borrowings of +¥402.8B and short-term borrowings of +¥380.7B offsetting funding shortfalls in operating and investing activities, while dividend payments of ▲¥172.7B were made. As a result, Free Cash Flow, combining OCF and Investing CF, was ▲¥992.0B, indicating that the quarter’s investments and dividends were funded through borrowings. Cash and cash equivalents at the end of the period were ¥2,421.1B, nearly unchanged from ¥2,451.5B at the end of the previous fiscal year.
The core sources of earnings for the period were gross profit generated from business flows and Equity in Earnings of Affiliates of ¥140.6B. Other income and expenses of ¥22.6B and ¥17.9B, respectively, were almost offset, resulting in a net ▲¥1.4B and a limited impact from nonrecurring factors. Equity in Earnings of Affiliates accounted for 34.2% of Profit Before Tax of ¥411.2B. Although this is a standard level for a trading company, the structure of reliance on the performance of partners and resource market conditions continues to affect earnings quality. OCF of ▲¥572.8B was substantially below Net Income of ¥323.6B, and the divergence between the two (accruals) was attributable to working capital factors, namely an increase in inventories and a decrease in accounts payable, indicating a delay in the conversion of earnings into cash. Comprehensive Income was ¥766.0B, substantially above Net Income, and it should be noted that valuation-related factors separate from operating earnings, including foreign currency translation adjustments for foreign operations of +¥165.3B and valuation gains on FVTOCI financial assets of +¥187.6B, increased equity.
Against the full-year forecast of ¥130.0B for Net Income attributable to owners of the parent, Q1 actual results were ¥302.2B, representing a progress rate of 23.2%. Against the EPS forecast of ¥622.55, actual EPS was ¥144.72, also representing a progress rate of 23.2%. On a quarterly basis, the progress rate was broadly within the standard range compared with a simple pro rata benchmark of 25%, and no revisions were made to the earnings or dividend forecasts as of the end of the quarter.
The full-year dividend forecast is ¥180 per share, implying a Payout Ratio of 28.9% based on forecast EPS of ¥622.55. Dividend payments during Q1 were ¥172.7B (¥159.1B in the previous year, +8.6%). Share repurchases were ▲¥0.04B, a negligible amount, meaning that shareholder returns were effectively centered on dividends. When dividends alone are considered, the applicable Payout Ratio is 28.9%, and the Total Return Ratio including share repurchases also remains at approximately the same level.
Liquidity risk associated with deteriorating working capital: OCF was ▲¥572.8B, primarily due to a decrease in accounts payable of ▲¥1,124.8B and an increase in inventories of +¥136.0B. If the decline in cash-generating capacity continues, reliance on external financing may increase.
Higher interest burden and leverage risk: Interest-bearing debt was ¥14,205.2B, while Financial Expenses increased to ¥93.7B (¥68.1B in the previous year, +37.6%). Although the Equity Ratio of 30.7% is improving, the expense burden may increase further in a rising interest-rate environment.
Concentration of segment earnings: Net Income attributable to owners of the parent is highly concentrated in Chemicals (¥110.5B) and Energy & Social Infrastructure (¥68.6B), while Metals, Mineral Resources & Recycling (¥21.3B, ▲31.3% YoY) and Automotive (continuing loss of ▲¥3.4B) remain relatively weak, with dispersion among segments widening.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Margin | 3.9% | 3.8% (1.5%–5.1%) | +0.1pt |
| The Net Margin is slightly above the industry median. |
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 39.3% | 3.1% (-0.6%–11.7%) | +36.2pt |
| The Revenue Growth Rate is substantially above the industry median and represents an outstanding rate of revenue growth within the industry. |
※Source: Compiled by the Company
While positive operating leverage was confirmed through increases in revenue and earnings (Revenue +39.3%, Operating Income +135.8%), OCF turned negative (▲¥572.8B). The widening qualitative divergence between earnings and cash flow is a structural characteristic identifiable from the financial results data.
While the Chemicals segment grew to become the largest contributor on a Net Income attributable to owners of the parent basis (¥110.5B), the profitability of the Metals, Mineral Resources & Recycling and Automotive segments declined relatively, making the concentration of earnings among segments more apparent.
The full-year progress rate was approximately standard at 23.2% on a Net Income basis, and neither the earnings forecast nor the dividend forecast was revised.
This is a mechanically calculated reference range based solely on publicly disclosed data using a residual income model (Ohlson-type model with an explicit five-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear | ¥5,850 |
| base | ¥5,919 |
| bull | ¥6,040 |
| Calculation Assumption | Value |
|---|---|
| Book Value per Share (BPS) | ¥5,502 |
| Adjusted Forecast EPS | ¥645.4 |
| Cost of Equity r | 9.15% (10-year government bond 2.65% + equity risk premium 6.00% + size premium 0.50%) |
| Residual Income Persistence Coefficient ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 28.9% |
| Forecast EPS Confidence Adjustment | ×1.037 (based on the industry’s historical guidance achievement rate) |
| Implied PBR / PER |
Sensitivity: ¥5,751–¥6,094 at ±1% for the Cost of Equity, and ¥5,909–¥5,934 at ±0.1 for ω.
Notes:
(Calculation model: Residual Income Model / Interest Rate Reference Month: 2026-06 / This figure does not predict or guarantee future share prices)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting a professional as necessary.
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| 1.08x / 9.2x |