Yamaichi Real Estate Co.,Ltd FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥4.49B
• Operating Income: ¥-123M
• Net Income: ¥229M
• EPS: ¥-37.08

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

Yamaichi Estate Co., Ltd. (2984) reported FY2026 Q2 consolidated results under JGAAP showing a sharp contraction in topline and a continued, though narrowing, loss at the operating and net levels. Revenue declined 49.7% YoY to ¥4.494bn, reflecting a materially lower transaction volume or project handovers versus the prior year. Despite the steep revenue drop, reported gross profit of ¥2.340bn implies a gross margin of 52.1%, suggesting that projects recognized in this half carried relatively strong margins or that the mix skewed toward higher-margin fees/ancillary income. Operating loss narrowed to ¥123mn (+199.3% YoY improvement), indicating meaningful operating cost discipline and/or favorable gross margin resilience amid the revenue decline. Ordinary loss widened to ¥376mn due to financial costs and non-operating factors, with interest expense of ¥180mn compressing earnings given limited operating scale in the period. Net loss improved to ¥318mn (+311.8% YoY), aided by cost controls, though the company still faces scale deleveraging at current revenue levels. The DuPont profile shows net margin of -7.08%, asset turnover of 0.080x, and financial leverage of 4.28x, yielding a calculated ROE of -2.41%, consistent with reported ROE. Liquidity appears ample with a current ratio of 305% and working capital of ¥18.058bn, providing buffer to navigate project cycles. However, operating cash flow was negative at -¥3.406bn, likely reflecting working capital investment typical of real estate development cycles, and was partly funded by ¥1.483bn of financing cash inflow. Interest coverage is weak at -0.7x, highlighting sensitivity to financing costs until earnings scale normalizes. Debt-to-equity stands at 2.81x, implying a leveraged balance sheet consistent with the asset-heavy, project-based model. Dividend per share is zero, with a payout ratio of 0%, prudent given negative earnings and cash outflows. Several items are undisclosed (e.g., inventories, cash and equivalents, investing cash flows, equity ratio in the XBRL), and zeros reflect non-disclosure, not actual zero balances. Given these data limitations, conclusions focus on disclosed metrics: margin resilience, cost control, and liquidity strength juxtaposed against weak operating scale, negative OCF, and interest burden. The outlook hinges on the timing of project deliveries in H2 and financing conditions; sustained improvement requires revenue normalization to restore operating leverage and interest coverage.

Profitability Analysis

ROE_decomposition: Net margin -7.08% x Asset turnover 0.080x x Financial leverage 4.28x = ROE -2.41% (matches reported). The negative net margin is the main drag; slow asset turns for the half also weigh on ROE, while high leverage amplifies losses. margin_quality: Gross margin at 52.1% (¥2,339,818k gross profit on ¥4,494,000k revenue) is strong relative to the revenue decline, implying favorable project mix or recognition of higher-margin streams. Operating margin was -2.7% (¥-123,000k/¥4,494,000k), showing improved cost containment versus last year despite deleveraging. Ordinary margin deteriorated due to financial expenses (interest ¥180,232k). operating_leverage: Revenue fell 49.7% YoY, but operating loss narrowed, indicating meaningful fixed-cost flex and SG&A discipline. Nonetheless, current run-rate revenue is insufficient to cover fixed costs and financing costs; incremental revenue recognition in H2 should have high flow-through to operating income given the cost base.

Growth Assessment

revenue_sustainability: H1 revenue of ¥4.49bn is down ~50% YoY, likely reflecting timing of property handovers and project pipeline phasing typical in real estate. Sustainability hinges on scheduled completions and transaction environment in H2. profit_quality: Gross margin strength suggests underlying project economics are intact. However, negative operating and ordinary income show that current scale does not absorb fixed and financial costs; profit quality will improve only with revenue normalization. outlook: If H2 recognizes larger projects, operating leverage could lift EBIT back to positive territory and improve interest coverage. Key external variables include mortgage/financing conditions and property market demand. Internal drivers are project delivery timing, sales velocity, and cost control.

Financial Health

liquidity: Current assets ¥26,862,187k vs current liabilities ¥8,804,104k yields a current ratio of 305% and quick ratio of 305% (inventories undisclosed). Working capital stands at ¥18,058,083k, providing near-term cushion. solvency: Debt-to-equity is 2.81x, indicating high leverage typical of developers. Interest expense of ¥180,232k against negative EBIT implies weak debt service capacity until earnings recover. capital_structure: Total assets ¥56,464,000k; total liabilities ¥37,053,051k; total equity disclosed at ¥13,191,000k aligns with the leverage ratio used in DuPont (assets/equity ≈ 4.28x). The equity ratio item is undisclosed in XBRL despite a displayed 0.0% placeholder.

Cash Flow Quality

earnings_quality: OCF/Net Income is 10.71x (both negative), indicating cash outflow materially exceeds the accounting loss, driven by working capital investment rather than accrual reversals. FCF_analysis: Investing CF is undisclosed; reported FCF is 0 in the dataset, so true FCF cannot be determined. The sizable negative OCF suggests internally generated cash was insufficient in H1, with funding partly via financing inflows of ¥1,482,511k. working_capital: Negative OCF is likely tied to project expenditures and inventory build (inventories not disclosed), as well as potential receivable timing. Monitoring changes in advances, real estate for sale, and deposits received will be critical.

Dividend Sustainability

payout_ratio_assessment: DPS is ¥0.00 with a payout ratio of 0%, appropriate given negative EPS of -¥37.08. FCF_coverage: FCF coverage cannot be assessed due to undisclosed investing CF; with OCF negative, internal coverage would be weak even if capex were modest. policy_outlook: Given losses and negative OCF in H1, the near-term stance likely prioritizes balance sheet flexibility and project funding over distributions until profitability and cash generation normalize.

Risk Assessment

Business Risks:

• Revenue timing risk from project handover schedules and sales recognition
• Market demand fluctuations in the real estate sector affecting sales velocity and pricing
• Cost inflation in construction and financing potentially pressuring margins
• Concentration risk if revenue depends on a limited number of large projects
• Regulatory and zoning changes impacting project pipelines

Financial Risks:

• High leverage (D/E 2.81x) and weak interest coverage (-0.7x) amid reduced operating scale
• Negative operating cash flow requiring reliance on external financing
• Refinancing and interest rate risk affecting borrowing costs and liquidity
• Working capital intensity and potential inventory/receivable build (details undisclosed)

Key Concerns:

• Sustained revenue shortfall versus cost base leading to continued ordinary losses
• Interest burden eroding profitability until EBIT scales up
• Visibility on inventories, cash balances, and investing cash flows is limited due to disclosures

Investment Implications

Key Takeaways:

• Topline contracted 49.7% YoY, but operating loss narrowed to ¥123mn on cost control
• Gross margin remained strong at 52.1%, supporting underlying project economics
• Ordinary and net losses persist due to interest burden and deleveraging
• Liquidity appears ample (current ratio 305%, WC ¥18.1bn), but OCF was -¥3.41bn
• Leverage is elevated (D/E 2.81x) with weak interest coverage (-0.7x)

Metrics to Watch:

• H2 revenue recognition and backlog conversion to sales
• EBIT and EBITDA run-rate vs. interest expense to restore coverage
• Operating cash flow trajectory and working capital movements
• Debt levels, refinancing timelines, and average borrowing costs
• Gross margin sustainability and mix of project deliveries

Relative Positioning: Within Japan-listed real estate developers, the company exhibits higher sensitivity to project timing with elevated leverage and currently weak coverage, offset by strong reported gross margins and ample working capital liquidity.

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