ICHIMASA KAMABOKO CO.,LTD. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥7.43B
• Operating Income: ¥-216M
• Net Income: ¥8M
• EPS: ¥-6.65

Income Statement

Balance Sheet

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

Verdict: FY2026 Q1 was soft, with a continued operating loss and negative ROE, as modest topline growth failed to offset cost pressure and financing burden. Revenue grew 1.2% YoY to 74.33, but gross profit was 14.18 and SG&A of 14.70 left an operating loss of -2.16. Ordinary loss was -2.35 with non-operating income of 0.24 and expenses of 0.51, reflecting a net financing drag as interest expense reached 0.15. Despite a positive profit before tax of 0.39 (suggesting sizable extraordinary gains), net income ended at -1.21 as below-the-line items and taxes offset the one-off benefit. Gross margin printed 19.1%, operating margin -2.9%, ordinary margin -3.2%, and net margin -1.6%. Margin expansion/compression in basis points YoY cannot be quantified due to lack of prior-period margin disclosure, but the operating loss indicates insufficient operating leverage on a slightly higher sales base. Earnings quality is difficult to assess as operating cash flow was not disclosed; the absence of OCF prevents us from comparing cash generation versus reported losses. Financially, liquidity is tight with current ratio at 102.8% and quick ratio at 84.3%, while short-term loans (54.18) are heavy relative to cash (12.46) and receivables (38.17). Leverage is moderate (D/E 1.18x), but interest coverage is weak at -14.65x, highlighting sensitivity to financing costs. Asset efficiency remains low with asset turnover at 0.232 and ROIC at -0.5%, underscoring underutilized capacity or demand/price constraints. The effective tax rate appears elevated (80.2%), indicative of losses/lumpy extraordinary items and limited tax shield utilization. Book value per share is 802.49 JPY and calculated ROE is -0.8%, mirroring the challenging start to the year. Working capital is thin at 2.84, making short-term funding and inventory discipline important near-term priorities. With limited disclosure on cash flows and capex, the durability of dividends (if any) cannot be verified this quarter. Forward-looking, the company must execute price pass-through and SG&A control to return to break-even, while carefully managing refinancing risk amid high short-term borrowings. Absent a rebound in margin or improved cash generation, ROIC is likely to remain below the mid-single-digit level targeted by food manufacturers. Monitoring extraordinary gains/losses is critical given their outsized impact on bottom-line volatility this quarter.

Profitability Analysis

ROE decomposition (DuPont): ROE (-0.8%) = Net Profit Margin (-1.6%) × Asset Turnover (0.232) × Financial Leverage (2.18x). The most influential drag is the negative net margin, as modest leverage and low asset turnover cannot offset operating losses. Business drivers: gross margin of 19.1% combined with SG&A of 14.70 left insufficient contribution, and financing costs (0.15) plus other non-operating items pushed ordinary income further negative. Extraordinary items flipped pretax to positive, but did not translate to a positive bottom line after taxes/other adjustments. Sustainability: the reliance on non-recurring items to lift pretax profit is not durable; core profitability must improve through price/mix, cost controls, and utilization gains. Asset turnover at 0.232 indicates slow sales velocity over the asset base, consistent with a processing/food manufacturer with meaningful fixed assets; improvements would likely be gradual. Concerning trends: operating loss alongside revenue growth (+1.2% YoY) implies negative operating leverage; while SG&A detail was not disclosed, absolute SG&A exceeded gross profit, suggesting overhead burden outweighs current scale. Interest burden is material given negative coverage (-14.65x); further rate increases or refinancing could pressure ordinary income. Overall, ROE weakness is margin-driven, with asset efficiency a secondary constraint and leverage providing limited benefit due to losses.

Growth Assessment

Revenue grew 1.2% YoY to 74.33, indicating stable demand but not enough scale to overcome cost pressures. Operating income was -2.16 (reported YoY change -21.9%), signaling that growth failed to translate into profit due to higher input costs, energy/logistics, or fixed-cost absorption limits. Gross margin was 19.1%; operating margin -2.9%; net margin -1.6%. YoY basis-point changes for margins are not calculable due to missing prior-period margin data. Non-operating result (-0.27 net) and interest expense (0.15) continue to weigh on ordinary profit. Extraordinary items were likely favorable (PBT 0.39 despite ordinary loss), but bottom-line stayed negative after taxes/adjustments, highlighting profit volatility. With ROIC at -0.5% and asset turnover at 0.232, capital productivity remains below acceptable thresholds, implying a need for either price/mix upgrades, cost reductions, or asset rationalization. Outlook hinges on ability to pass through raw material and utility cost inflation and to manage labor/logistics costs; modest topline growth alone appears insufficient. Absent OCF disclosure, we cannot confirm if working capital normalized post-quarter to support sales growth. Near-term catalysts would be successful price revisions with limited volume elasticity, improved factory utilization into peak demand periods, and mix shift toward higher-margin items.

Financial Health

Liquidity: Current ratio at 102.8% is barely above 1.0, and quick ratio at 84.3% is below 1.0, signaling tight near-term liquidity. Warning: quick ratio <1.0 indicates limited immediate coverage of current liabilities without inventory liquidation. Maturity profile: short-term loans of 54.18 are large versus cash (12.46) and receivables (38.17); refinancing and rollover risk is elevated if credit conditions tighten. Accounts payable (20.53) plus other current liabilities contribute to a thin working capital position (2.84). Solvency: Debt-to-equity is 1.18x (not excessive), but interest coverage is weak (-14.65x) due to operating losses, creating debt service vulnerability. Long-term loans total 49.16, providing some tenor balance, but the concentration in short-term debt raises maturity mismatch risk. Off-balance sheet obligations: not disclosed; no assessment possible from provided data. Equity base is 146.92 with retained earnings of 120.61, offering some buffer, but continued losses could erode this cushion. Explicit warnings: - Current ratio only marginally >1.0; - Quick ratio <1.0; - Interest coverage well below the 2x warning threshold.

Cash Flow Quality

Operating cash flow was not disclosed, so OCF/Net Income cannot be calculated, limiting earnings quality assessment. With negative operating income and weak interest coverage, underlying cash generation is likely challenged absent sizable working capital release, but this cannot be confirmed. Free cash flow and capex were not reported; sustainability of funding for maintenance capex and dividends is therefore unverified. Potential working capital pressure points include inventory (18.70) relative to tight liquidity and the need to support receivables (38.17) with short-term debt (54.18). No clear signs of working capital manipulation can be identified without cash flow data; monitoring days sales outstanding and inventory days in subsequent quarters will be important.

Dividend Sustainability

Dividend data (DPS, total dividends, FCF coverage) were not reported for the quarter, and payout ratios are not meaningful with negative earnings (calculated payout ratio is mechanically negative and not interpretable). Without OCF and capex disclosure, we cannot assess free cash flow coverage. Given the operating loss and weak interest coverage, sustaining cash dividends would likely rely on balance sheet flexibility and bank lines in the near term. Policy outlook depends on management’s stance toward stable dividends versus earnings-linked payouts; absent disclosure, assume a conservative posture until profitability and cash generation stabilize. Key determinant will be restoration of positive ordinary income and evidence of OCF > dividends plus maintenance capex.

Risk Assessment

Business Risks:

• Cost inflation in surimi/fish paste inputs, energy, and logistics compressing margins
• Difficulty in passing price increases through to retailers and foodservice customers without volume loss
• Low asset turnover (0.232) reflecting underutilization and cyclicality/seasonality in demand
• Operational leverage risk as SG&A and fixed costs outpace modest sales growth
• Product mix/innovation risk in a competitive chilled/processed foods market

Financial Risks:

• Tight liquidity: quick ratio 84.3% and minimal working capital (2.84)
• Refinancing risk: short-term loans 54.18 vs cash 12.46 and receivables 38.17
• Debt service strain: interest coverage -14.65x with potential sensitivity to rate increases
• Earnings volatility from extraordinary items and elevated effective tax rate (80.2%)
• Potential covenant pressure if losses persist (not disclosed)

Key Concerns:

• Core operations remain loss-making despite revenue growth (+1.2% YoY)
• Reliance on non-recurring items to lift pretax profit (PBT positive while ordinary income negative)
• ROIC at -0.5% indicates value dilution unless margins improve
• Absence of cash flow disclosure obscures dividend and capex funding capacity
• Concentration of liabilities in short-term debt increases rollover dependence

Investment Implications

Key Takeaways:

• Soft quarter: operating margin -2.9% and ROE -0.8% despite slight sales growth
• Liquidity tight with quick ratio <1.0 and heavy short-term borrowings
• Financing cost burden material (interest expense 0.15) with negative coverage
• Extraordinary gains supported PBT, but bottom line remained negative
• Asset efficiency low; ROIC -0.5% highlights need for margin and utilization recovery

Metrics to Watch:

• Gross margin trajectory and pace of price pass-through
• Operating income and ordinary income inflection back to positive territory
• OCF and FCF disclosure; OCF/NI ratio once available
• Short-term debt levels and average interest rate; refinancing profile
• Inventory and receivables days to gauge working capital strain
• Capex commitments versus available internal cash generation
• Any DPS guidance or payout policy updates

Relative Positioning: Within Japanese processed food peers, the company is currently weaker on profitability (negative operating and ordinary income), tighter on liquidity (quick ratio <1.0), and more exposed to financing risk (negative interest coverage). Recovery requires demonstrable margin improvement and cash generation; until then, capital efficiency and balance sheet resilience lag best-in-class peers.

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