KIBUN FOODS INC. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥48.86B
• Operating Income: ¥-413M
• Net Income: ¥-31M
• EPS: ¥-46.14

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

Kibun Foods (2933) reported FY2026 Q2 consolidated results under JGAAP with modest top-line growth but a return to operating losses. Revenue rose 2.3% YoY to ¥48.864 billion, supported by steady demand across core surimi/fish paste and prepared foods, but gross profit of ¥10.101 billion (gross margin 20.7%) was insufficient to cover fixed costs and higher overheads. Operating income was a loss of ¥413 million (operating margin -0.8%), a significant deterioration from profitability needs despite the YoY percentage being shown as a positive swing due to the prior-year base effect. Ordinary income fell to a loss of ¥833 million, reflecting not only operating weakness but also the burden of interest expense of ¥286 million. Net income was a loss of ¥1.053 billion (net margin -2.15%) and EPS of -¥46.14, indicating continued bottom-line pressure. DuPont decomposition shows ROE of -5.42%, driven by a negative net margin, moderate asset turnover of 0.659x, and meaningful financial leverage of 3.81x. The company’s balance sheet shows total assets of ¥74.097 billion and total liabilities of ¥51.138 billion, with total equity of ¥19.427 billion, implying an equity ratio around 26% (though the reported metric is undisclosed). Liquidity remains adequate with a current ratio of 119.7% and a quick ratio of 88.9%, while working capital stands at ¥5.136 billion. Interest coverage is weak at -1.4x, highlighting near-term pressure on debt service from operating losses. Inventory of ¥8.030 billion suggests normal seasonal stocking for autumn–winter demand but raises working capital sensitivity if sales underperform. Cash flow statements, depreciation, and EBITDA were not disclosed in the dataset, limiting visibility on cash generation, non-cash charges, and capex needs. Dividend per share is disclosed as zero; with losses and missing cash flow disclosure, near-term distributions appear constrained by earnings. Overall, Kibun’s Q2 shows modest sales resilience but margin compression, pointing to cost pass-through, mix, and efficiency as critical levers for the second half. With leverage elevating earnings volatility, restoring operating profitability and protecting gross margin are essential to stabilize ROE. Data limitations around cash flows and depreciation temper the ability to assess earnings quality and free cash flow coverage. Near-term outlook hinges on raw material costs (surimi/fish paste inputs), energy/logistics inflation, and the success of pricing and product mix optimization. Competitive dynamics in retail and convenience channels remain a key determinant of volume and pricing power.

Profitability Analysis

ROE decomposition:

• net_profit_margin: -2.15%
• asset_turnover: 0.659x
• financial_leverage: 3.81x
• calculated_ROE: -5.42%
• interpretation: Negative ROE is entirely driven by the negative net margin; asset turnover is moderate for a food manufacturer, while higher leverage amplifies losses. margin_quality:
• gross_margin: 20.7%
• operating_margin: -0.8% (operating loss of ¥413m)
• ordinary_margin: -1.7%
• net_margin: -2.15%
• drivers: Input cost inflation (surimi/fish paste, seasonings), energy and logistics costs, and likely limited pricing power in certain channels. Gross margin remains positive but insufficient to absorb SG&A and fixed costs. operating_leverage:
• assessment: High fixed-cost sensitivity suggested by operating loss despite positive gross profit; small revenue changes have outsized impact on operating income.
• interest_burden: Interest expense of ¥286m erodes ordinary income; interest coverage at -1.4x indicates limited cushion until operating profits recover.

Growth Assessment

revenue_sustainability: Revenue grew 2.3% YoY to ¥48.864b, indicating steady demand. Seasonality (oden/winter products) and convenience/retail channels support second-half sales, but competitive pricing could cap growth. profit_quality: Profitability remains weak with operating and net losses; without disclosed depreciation, it is unclear how much of the loss is cash vs. non-cash. Margin recovery depends on price/mix actions and cost controls. outlook: Focus on price optimization, product mix (value-added prepared foods), and efficiency should support gradual margin recovery if input cost pressures ease. A stronger H2 is typical seasonally, but the pace of recovery is uncertain given channel competition and cost pass-through elasticity.

Financial Health

liquidity:

• current_ratio: 119.7%
• quick_ratio: 88.9%
• working_capital: ¥5,136,103,000
• commentary: Short-term liquidity is adequate but not abundant; quick ratio below 100% indicates reliance on inventory conversion to meet obligations. solvency:
• debt_to_equity: 2.63x (total liabilities/equity)
• equity_ratio: Approx. 26% (computed from totals; reported metric undisclosed)
• interest_coverage: -1.4x (operating income/interest expense)
• commentary: Leverage is meaningful for a food manufacturer; negative coverage underscores the need to restore operating profit to comfortably service interest. capital_structure: Total assets ¥74.097b financed by ¥51.138b liabilities and ¥19.427b equity. Elevated leverage magnifies earnings volatility; preserving equity base through improved profitability is a priority.

Cash Flow Quality

earnings_quality: Not assessable from disclosed data; OCF, FCF, and depreciation were not reported in this dataset. Net loss raises questions on cash burn, but absence of non-cash detail limits conclusions. FCF_analysis: Free cash flow not disclosed; capex and working capital movements unavailable. Given inventory levels and losses, FCF likely pressured in the period. working_capital: Inventories at ¥8.030b represent a significant portion of current assets; efficient sell-through in peak season is key to avoid cash tie-up.

Dividend Sustainability

payout_ratio_assessment: Annual DPS reported as ¥0.00 with a net loss (EPS -¥46.14). Payout ratio is effectively 0% due to losses. FCF_coverage: Not assessable; OCF/FCF undisclosed in this dataset. With negative earnings and interest burden, internal coverage appears constrained. policy_outlook: Near-term dividend capacity is limited until profitability and cash generation are restored; management likely prioritizes balance sheet stability.

Risk Assessment

Business Risks:

• Raw material cost volatility (surimi/fish paste, seafood inputs)
• Energy and logistics inflation affecting manufacturing and distribution costs
• Price competition and private label pressure in retail and CVS channels
• Seasonality risk (winter product concentration) leading to demand volatility
• Product mix risk if higher-margin value-added items underperform
• Demand elasticity to further price increases

Financial Risks:

• Negative operating income leading to weak interest coverage (-1.4x)
• Elevated leverage (total liabilities/equity 2.63x) amplifying earnings swings
• Liquidity reliance on inventory conversion (quick ratio 88.9%)
• Potential working capital expansion if inventory sell-through lags
• Exposure to interest rate changes on floating-rate debt (if applicable)

Key Concerns:

• Sustained operating losses despite revenue growth
• Ability to pass through costs without sacrificing volume
• Visibility on cash flows and capex due to undisclosed CF data in this dataset

Investment Implications

Key Takeaways:

• Top-line growth of 2.3% YoY but continued operating and net losses
• Gross margin at 20.7% provides a base for recovery if SG&A efficiencies materialize
• Leverage (3.81x assets/equity; 2.63x liabilities/equity) heightens sensitivity to margins
• Adequate but tight liquidity (current ratio 119.7%, quick ratio 88.9%)
• Interest burden (¥286m) requires swift operating profit restoration
• Data gaps on cash flows and depreciation limit assessment of earnings quality

Metrics to Watch:

• Quarterly gross and operating margins (pricing and cost pass-through effectiveness)
• Sales mix toward higher-margin prepared foods/value-added products
• Inventory turnover and days inventory on hand through peak season
• Operating cash flow and capex once disclosed
• Interest coverage trajectory and net debt movement
• Raw material cost trends (surimi/seafood) and energy/logistics costs

Relative Positioning: Within Japanese packaged foods, Kibun’s product portfolio has seasonal concentration and input sensitivity; profitability currently lags peers with steadier year-round demand and stronger pricing power, making margin restoration and cost discipline comparatively more critical.

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