OHMORIYA Co.,LTD. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥16.51B
• Operating Income: ¥-66M
• Net Income: ¥-75M
• EPS: ¥-14.76

Income Statement

Balance Sheet

Cash Flow Statement

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

Omoriya (29170) reported FY2025 Q4 consolidated results under JGAAP with strong top-line expansion but a loss-making bottom line and heavy cash outflows. Revenue grew 26.3% YoY to 16,511 million yen, indicating robust demand or successful price/mix initiatives, likely in its core seaweed and related seasoning categories. Despite the revenue surge, gross profit was 2,172 million yen with a thin gross margin of 13.2%, implying elevated input costs and limited pricing power or an unfavorable mix. Operating income was a loss of 66 million yen (operating margin roughly -0.4%), and ordinary income was a loss of 98 million yen, reflecting weak operating leverage and possibly higher non-operating pressures. Net income was a loss of 73 million yen (net margin -0.44%), with an EPS of -14.76; an 88.6 million yen tax expense despite a loss suggests deferred tax adjustments or non-deductible items. DuPont analysis yields a calculated ROE of -0.63% (net margin -0.44%, asset turnover 0.701x, financial leverage 2.04x), confirming low profitability as the primary drag rather than excessive leverage. Cash flow quality deteriorated sharply: operating cash flow was -5,011 million yen, far larger in magnitude than the accounting loss, pointing to significant working capital absorption (inventory is notably high at 8,119 million yen). Free cash flow was -6,878 million yen, as investing outflows of -1,867 million yen compounded the OCF shortfall. Financing inflows of 7,166 million yen appear to bridge the cash gap, implying reliance on external funding in the period. The balance sheet shows total assets of 23,556 million yen and total equity of 11,528 million yen, indicating an equity ratio near 49% by calculation (the reported equity ratio field is unpopulated), supporting overall solvency despite losses. Liquidity ratios look strong on paper (current ratio 364.8%, quick ratio 126.2%), but inventory intensity (inventory days estimated around 209) raises concerns about cash conversion. EBITDA was 148 million yen (0.9% margin) and interest coverage was -10.4x; while interest expense is small (6.3 million yen), negative EBIT underscores fragile core profitability. Working capital stood at 9,010 million yen, and inventories alone equate to about 49% of annual revenue, heightening risk if sell-through slows or prices normalize. Dividend and share data were not disclosed in the feed (DPS and share counts shown as zero indicate non-disclosure), limiting per-share and payout analysis beyond the reported EPS. Overall, the story is one of strong sales momentum but poor cash generation and thin margins, likely driven by raw material inflation, procurement timing, and inventory build, with external financing used to offset cash drain. Near-term focus should be on margin repair, inventory normalization, and restoring positive operating cash flow.

Profitability Analysis

roe_decomposition: Calculated ROE is -0.63%, driven by net margin -0.44%, asset turnover 0.701x, and financial leverage 2.04x. The negative margin is the dominant driver of weak ROE; leverage is moderate and asset turnover is reasonable for a processed foods/seasonings business. margin_quality: Gross margin is 13.2% (gross profit 2,171.8 million yen on revenue 16,511 million yen), indicating elevated input costs and/or constrained pricing. Operating margin is about -0.4% (operating loss 66 million yen) and ordinary margin about -0.6%, demonstrating insufficient pass-through of costs or unfavorable mix. The presence of an 88.6 million yen tax expense despite a net loss suggests non-operating/tax effects distorting bottom-line quality. operating_leverage: Despite 26.3% YoY revenue growth, operating income remained negative, implying unfavorable operating leverage in FY2025. Fixed cost absorption appears insufficient, and variable cost inflation likely compressed margins. EBITDA of 148 million yen (0.9% margin) leaves little buffer for overhead, indicating that incremental sales did not translate into proportional profit gains.

Growth Assessment

revenue_sustainability: Revenue expanded 26.3% YoY to 16,511 million yen. This likely reflects price increases and/or volume recovery in seaweed and related products; sustainability depends on consumer elasticity, retailer acceptance, and competitive responses. The elevated inventory suggests expectations of continued demand but increases downside risk if sell-through slows. profit_quality: Profit quality is weak: net margin -0.44%, operating loss 66 million yen, and EBITDA margin 0.9%. The tax expense despite losses and negative ordinary income indicate that accounting profit does not translate to cash, corroborated by large negative OCF. outlook: Key to near-term earnings is margin repair via price optimization, procurement normalization, and inventory right-sizing. If raw material and logistics cost pressure eases and price pass-through holds, gross margin could recover from 13.2%, supporting a return to positive operating income. Conversely, prolonged yen weakness and volatile seaweed harvests could prolong margin compression.

Financial Health

liquidity: Current assets 12,412.7 million yen vs current liabilities 3,403.1 million yen yield a current ratio of 364.8% and a quick ratio of 126.2%. However, inventories of 8,118.9 million yen (about 65% of current assets) drive much of the current ratio, raising concerns about conversion to cash. solvency: Total assets 23,556 million yen and total equity 11,528 million yen imply an equity ratio around 49% (the reported equity ratio field is unpopulated). Debt-to-equity is 0.35x, and interest expense is modest at 6.3 million yen, suggesting manageable leverage overall. capital_structure: Financial leverage (Assets/Equity) at 2.04x is moderate. Financing inflows of 7,166 million yen in the period indicate increased reliance on external funding, likely short-term borrowings to support working capital. Interest coverage at -10.4x reflects negative EBIT rather than heavy interest burden.

Cash Flow Quality

earnings_quality: Operating cash flow of -5,011 million yen versus net loss of 73 million yen indicates material divergence; OCF/Net Income of 68.64 highlights poor cash conversion driven by working capital absorption rather than accrual earnings. EBITDA of 148 million yen provides limited internal cash generation. fcf_analysis: Free cash flow was -6,878 million yen, combining -5,011 million yen OCF and -1,867 million yen investing outflows. The FCF deficit was funded by 7,166 million yen of financing inflows, indicating reliance on external capital to sustain operations and investment. working_capital: Inventories are 8,118.9 million yen, roughly 49% of revenue and 209 days on COGS (8,118.9/14,133.5*365). This level likely contributed heavily to the OCF shortfall. The quick ratio of 126.2% shows adequate liquidity excluding inventory, but normalization of inventory and receivables is essential to restore cash generation.

Dividend Sustainability

payout_ratio_assessment: The feed shows Annual DPS and payout ratio as 0.00, which we treat as undisclosed rather than actual zeros. With net income negative and FCF deeply negative (-6,878 million yen), sustainable dividends for the period would be challenging if they were considered. fcf_coverage: FCF coverage is shown as 0.00x (treated as undisclosed). Based on available figures, FCF is negative, implying no cash coverage for any hypothetical dividends in this period. policy_outlook: Given negative earnings and cash flow plus reliance on financing inflows, management is likely to prioritize balance sheet stability and working capital normalization. Any future payout would depend on restoring positive OCF and consistent profitability; no explicit policy information was provided.

Risk Assessment

Business Risks:

• Raw material price volatility for seaweed and related inputs impacting gross margins
• Foreign exchange fluctuations (yen weakness) increasing import costs
• Demand elasticity and retailer pricing pressure limiting pass-through of costs
• Inventory obsolescence or write-down risk given elevated inventory days
• Supply concentration and harvest variability for seaweed (climate and environmental factors)
• Private label competition and channel mix shift compressing margins
• Food safety/quality control risks in processed seaweed products

Financial Risks:

• Negative operating cash flow requiring ongoing external financing
• Potential covenant or refinancing risk if borrowings increased to fund working capital
• Thin EBITDA margin (0.9%) offering limited buffer against shocks
• Tax expense despite losses, adding uncertainty to net results
• Working capital swings driving earnings-to-cash flow volatility

Key Concerns:

• Sustained negative OCF of -5,011 million yen versus a modest accounting loss
• Gross margin at 13.2% despite 26.3% revenue growth
• Large inventory position of 8,119 million yen (~209 days on COGS)
• Dependence on 7,166 million yen financing inflows to offset FCF deficit
• Negative ROE (-0.63%) with weak operating leverage

Investment Implications

Key Takeaways:

• Top-line growth (+26.3% YoY) did not translate into profits; operating loss of 66 million yen and net loss of 73 million yen
• Gross margin compressed to 13.2%, indicating cost pressure and/or pricing constraints
• Operating cash flow deeply negative (-5,011 million yen) with FCF at -6,878 million yen; inventory is the likely driver
• Balance sheet appears adequately capitalized (calculated equity ratio ~49%, D/E 0.35x) despite losses
• External financing of 7,166 million yen bridged the cash deficit, implying reliance on funding until WC normalizes
• EBITDA margin is only 0.9%, leaving limited cushion for volatility

Metrics to Watch:

• Gross margin trajectory and price pass-through effectiveness
• Inventory levels and inventory days relative to COGS
• Operating cash flow and free cash flow recovery
• Ordinary income and operating margin improvement
• Debt levels and interest coverage as financing inflows normalize
• FX exposure and procurement costs for seaweed/raw materials

Relative Positioning: Within Japan’s packaged foods/seasonings segment, Omoriya shows above-peer revenue growth momentum but below-peer profitability and cash conversion, constrained by cost inflation and a heavy working capital build; balance sheet leverage is moderate, offering time to execute margin and cash cycle improvements.

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
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