Yamami Company FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥5.24B
• Operating Income: ¥408M
• Net Income: ¥279M
• EPS: ¥40.17

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

FY2026 Q1 was a solid rebound quarter for Yamami, with strong top-line growth and a sharp recovery in operating profit. Revenue rose 9.3% YoY to 52.44, while operating income nearly doubled (+96.2% YoY) to 4.08, indicating meaningful operating leverage. Ordinary income increased 95.6% YoY to 4.05, supported by negligible net non-operating items (non-operating income 0.03 vs expenses 0.04). Net income was reported at 2.79 (+97.1% YoY), though there are inconsistencies versus the reported profit before tax (2.08) and tax (0.66), which we flag as a data limitation. Gross profit margin is reported at 15.5%, and the operating margin is estimated at 7.8% (4.08/52.44), up sharply YoY. Based on back-calculated prior-year figures, operating margin expanded by roughly 345 bps (from ~4.3% to ~7.8%), reflecting pricing actions and/or input cost normalization. Interest burden is minimal, with interest expense of 0.04 and an interest coverage ratio of 99.13x, underscoring financial flexibility on the P&L. However, ROE is modest at 2.7% via DuPont (NPM 5.3% × ATO 0.329 × leverage 1.52x), and ROIC is low at 2.5%, below a 5% warning threshold. Liquidity is a key watchpoint: the current ratio is 93.2% and quick ratio 91.1%, indicating tight short-term funding conditions and negative working capital (-2.68). Balance sheet leverage is conservative with D/E at 0.53x and total equity of 104.61, but near-term obligations (current liabilities 39.47) are high relative to current assets (36.79). Cash flow data (OCF/FCF) is not disclosed, preventing direct confirmation of earnings quality and cash conversion. The reported payout ratio of 179.8% looks unsustainably high without corroborating FCF, and likely reflects timing or one-off factors; dividend policy visibility is therefore limited. Looking ahead, the margin recovery suggests improved cost pass-through and/or input cost relief, but sustainability hinges on raw material (e.g., soybean) and energy prices, and the pace of demand normalization. We also note data inconsistencies in gross profit vs cost of sales and PBT vs NI, which constrain precision of the analysis. Overall, the quarter shows encouraging operational recovery, but low liquidity and low ROIC temper the quality of the improvement and raise execution and cash conversion risks into subsequent quarters.

Profitability Analysis

ROE decomposition (DuPont): Net Profit Margin 5.3% × Asset Turnover 0.329 × Financial Leverage 1.52x = ROE 2.7%. The largest driver of improvement this quarter is Net Profit Margin, given operating income growth (+96.2% YoY) far outpaced revenue growth (+9.3% YoY), implying strong operating leverage and cost normalization. Asset Turnover (0.329) is modest, reflecting a capital-intensive base (noncurrent assets 123.01 vs total assets 159.23) and typical low-margin, high-volume food manufacturing economics; no clear evidence it changed materially QoQ/YoY from the data provided. Financial leverage (1.52x) remains conservative, with D/E at 0.53x; leverage did not materially contribute to ROE. Business explanation: margin expansion likely stems from pricing/mix and input cost relief (raw materials, utilities, logistics), combined with SG&A discipline (SG&A 6.06 vs OI 4.08), though detailed SG&A breakdown was not disclosed. Sustainability: partially sustainable if pricing discipline and cost pass-through persist and input costs remain stable; however, food commodity and energy price volatility could compress margins. Concerning trends: ROIC at 2.5% is weak relative to cost of capital; if SG&A growth re-accelerates ahead of sales or if cost inflation returns, the nascent margin recovery could reverse. Note: Some reported figures (gross profit vs cost of sales; PBT vs NI) are inconsistent, which could affect precise margin and return calculations.

Growth Assessment

Revenue grew 9.3% YoY to 52.44, indicating healthy demand and/or successful price realization. Operating income grew 96.2% YoY to 4.08, delivering significant operating leverage. Estimated operating margin improved to 7.8% (from ~4.3% a year ago), an expansion of roughly 345 bps, driven by stronger gross profitability and SG&A efficiency. Ordinary income rose 95.6% YoY to 4.05, with minimal net non-operating headwinds, implying the recovery is predominantly operational. Net income growth of 97.1% YoY to 2.79 supports the earnings rebound, though reported effective tax rate (31.6%) computed from PBT conflicts with NI, suggesting classification/timing effects. With ROIC at 2.5%, incremental growth must continue to focus on return improvement (pricing, mix, efficiency) rather than pure volume expansion. Near-term outlook: sustainability depends on raw material (e.g., soybean) and energy cost trends, and maintaining price/mix; if input costs stay benign, current margin levels could be defendable. Risks to growth include retailer bargaining power, private-label competition, and potential weakening of consumer demand amid real income pressure. Absence of D&A and R&D disclosure limits visibility on capacity expansion and innovation-driven growth.

Financial Health

Liquidity is tight: current ratio 93.2% (<1.0) and quick ratio 91.1% are below healthy thresholds; explicit warning warranted. Working capital is negative (-2.68), with current liabilities (39.47) modestly exceeding current assets (36.79), indicating reliance on rolling short-term funding. Maturity mismatch risk: short-term loans of 5.00 and accounts payable of 16.37 are sizable versus cash and deposits of 8.57 and receivables of 23.22; while receivables provide coverage, any collection delays could stress liquidity. Solvency is sound: D/E 0.53x and long-term loans 10.24 suggest conservative leverage; total equity is 104.61 against total liabilities of 55.48. Interest burden is low (interest expense 0.04) with very strong coverage (99.13x), reducing refinancing risk in the near term. No off-balance sheet obligations are disclosed in the data provided. Equity ratio is not disclosed, but equity constitutes about 65.7% of total assets (104.61/159.23), indicating a solid capital base. Overall, short-term liquidity warrants monitoring, despite a conservative long-term capital structure.

Cash Flow Quality

Operating cash flow was not disclosed, preventing direct assessment of cash conversion or OCF/NI; therefore, we cannot compute OCF/NI or FCF. In the absence of OCF and capex detail, we cannot confirm whether free cash flow covers dividends and maintenance capex. Earnings quality flags: the divergence between reported PBT and NI suggests potential classification/timing items under JGAAP; without the cash flow statement, it is unclear whether these are cash or non-cash. Working capital dynamics appear tight (negative working capital), which is common in food manufacturing but can mask cash conversion issues if payables are stretched. No clear signs of working capital manipulation can be identified without period-to-period inventory/receivable/payable turnover data.

Dividend Sustainability

The calculated payout ratio is 179.8%, which appears unsustainably high against earnings absent evidence of strong FCF; however, quarterly payout ratios can be misleading due to seasonality and timing. With OCF and FCF unreported, we cannot verify dividend coverage. Given low ROIC (2.5%) and tight liquidity (current ratio 0.93), a conservative stance on dividends would typically be prudent unless cash generation is demonstrably strong. Policy outlook is unclear from disclosures; investors should watch for full-year guidance and cash flow statements to reassess coverage.

Risk Assessment

Business Risks:

• Raw material price volatility (e.g., soybeans, eggs/inputs) impacting gross margins
• Energy and utility cost fluctuations affecting production costs
• Retailer bargaining power and private-label competition pressuring pricing
• Demand elasticity in a price-sensitive consumer environment
• Operational risks in perishable food manufacturing (quality, recalls, wastage)

Financial Risks:

• Low liquidity: current ratio 0.93 and negative working capital
• Reliance on short-term liabilities (current liabilities 39.47) vs current assets 36.79
• Potential cash flow shortfalls if receivable collections lag or payables tighten
• Low ROIC (2.5%) indicating weak capital efficiency

Key Concerns:

• Data inconsistencies (PBT vs NI; gross profit vs cost of sales) complicate analysis
• Absence of OCF/FCF disclosure limits earnings quality assessment
• High calculated payout ratio (179.8%) may be unsustainable without FCF support

Investment Implications

Key Takeaways:

• Strong operational recovery: revenue +9.3% YoY, operating income +96.2% YoY
• Operating margin estimated at 7.8%, up ~345 bps YoY
• Financial leverage conservative (D/E 0.53x) with very high interest coverage
• Liquidity tight (current ratio 0.93), increasing short-term risk
• ROIC at 2.5% underscores the need for improved capital efficiency
• Dividend sustainability unclear given a calculated payout ratio of 179.8% and no FCF data

Metrics to Watch:

• OCF and FCF (cash conversion vs NI; OCF/NI target >1.0)
• Gross and operating margin trends vs input costs (soybeans, energy)
• Working capital metrics: receivable days, payable days, inventory days
• Pricing/mix sustainability with key retail customers
• Capex plans and D&A to gauge ROIC trajectory
• Effective tax rate normalization and reconciliation between PBT and NI

Relative Positioning: Within Japan’s packaged/processed foods peer set, Yamami shows a solid margin rebound and conservative leverage but lags on ROIC and exhibits tighter liquidity than many mid-cap peers; sustained margin retention and demonstrable cash conversion will be key to narrowing this quality gap.

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