KURIYAMA HOLDINGS CORPORATION FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥66.05B
• Operating Income: ¥3.68B
• Net Income: ¥2.76B
• EPS: ¥183.87

Income Statement

Balance Sheet

Cash Flow Statement

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

Kuriyama Holdings (FY2025 Q3, consolidated, JGAAP) delivered solid top-line momentum with revenue of ¥66.05bn, up 12.2% YoY, but experienced operating margin compression as operating income declined 4.5% to ¥3.68bn. Gross profit of ¥18.57bn implies a gross margin of 28.1%, which is healthy for an industrial distributor/manufacturer profile, yet the operating margin stands at 5.6%, indicating higher SG&A or unfavorable mix and pricing dynamics despite scale benefits. Ordinary income of ¥4.30bn exceeds operating income by roughly ¥0.62bn, suggesting supportive non-operating items (e.g., FX, investment income), partially offsetting operating softness. Net income rose 30.9% to ¥3.61bn, benefiting from non-operating gains and a reasonable tax burden, translating into EPS of ¥183.87. DuPont decomposition shows a net margin of 5.47%, asset turnover of 0.760x, and financial leverage of 1.86x, yielding ROE of 7.72%, which is in line with the calculated figure provided. Liquidity is strong: the current ratio is 267% and the quick ratio is 155%, underpinned by sizable working capital headroom of ¥27.39bn. The balance sheet is conservative with total liabilities of ¥25.66bn against total equity of ¥46.76bn; the implied equity ratio is approximately 53.8% (noting the reported 0.0% is an undisclosed placeholder). Interest expense of ¥126m is modest and interest coverage is robust at 29.1x, indicating low financial risk. Cash generation is solid with operating cash flow (OCF) at ¥5.56bn and an OCF/Net Income ratio of 1.54x, pointing to good earnings quality and working capital management. EBITDA of ¥4.78bn equates to a 7.2% margin; OCF/EBITDA of roughly 1.16x further corroborates healthy cash conversion. Investing CF and cash/equivalents are shown as zero and should be treated as undisclosed; hence free cash flow (FCF) cannot be reliably computed from the provided data. Dividend data (DPS and payout) are also shown as zero and therefore not disclosed; dividend capacity should be assessed with caution until actual policy figures are available. Overall, the company combines top-line growth and strong liquidity with some near-term operating margin pressure, while non-operating gains and disciplined financing costs support bottom-line growth. The outlook hinges on restoring operating leverage, maintaining pricing power, and controlling SG&A against a backdrop of solid demand. Data limitations (several zeros represent non-disclosed items) constrain full-cycle FCF and payout analysis, but the available metrics indicate resilient fundamentals.

Profitability Analysis

ROE_decomposition: ROE 7.72% = Net Profit Margin 5.47% × Asset Turnover 0.760× × Financial Leverage 1.86×. This reflects moderate profitability, efficient asset utilization for the sector, and conservative leverage. margin_quality: Gross margin is 28.1% (¥18.57bn gross profit on ¥66.05bn revenue), while operating margin is 5.6% (¥3.68bn), indicating SG&A and/or mix effects compressed margins YoY as operating income fell 4.5% despite 12.2% revenue growth. Ordinary margin is 6.5% (¥4.30bn), suggesting non-operating support. Net margin at 5.47% is solid for a mid-cap industrial profile. operating_leverage: Revenue +12.2% YoY with operating income -4.5% implies negative operating leverage in the period, likely due to cost inflation, mix shifts, or timing of expense recognition. EBITDA margin of 7.2% versus operating margin of 5.6% indicates limited D&A burden; margin recovery will require SG&A discipline and/or pricing to offset input cost pressures.

Growth Assessment

revenue_sustainability: Top-line growth of 12.2% YoY is strong and appears broad-based at the consolidated level. Sustainability will depend on demand in key end-markets and the company’s ability to maintain share and pricing as supply chains normalize. profit_quality: Net income rose 30.9% to ¥3.61bn, supported by non-operating gains (ordinary income exceeds operating income by ¥0.62bn). Core profitability weakened at the operating level, so earnings quality is mixed: cash conversion is strong (OCF/NI 1.54x), but underlying operating margins softened. outlook: Focus areas for the next quarters include restoring operating leverage, managing input costs, and sustaining pricing. If the company can stabilize SG&A intensity and preserve gross margins, earnings growth should better align with revenue growth; otherwise, reliance on non-operating gains could leave earnings more volatile.

Financial Health

liquidity: Current assets ¥43.76bn vs current liabilities ¥16.37bn yield a 267% current ratio and a 155% quick ratio (ex-inventories). Working capital is ¥27.39bn, providing ample short-term flexibility. solvency: Total liabilities ¥25.66bn against equity ¥46.76bn gives a debt-to-equity of 0.55x and an implied equity ratio near 53.8% (reported 0.0% is undisclosed). Interest coverage is 29.1x, indicating low refinancing and interest rate risk at current levels. capital_structure: Leverage is moderate with financial leverage of 1.86x. The balance sheet can likely support selective investment or M&A, though actual cash and net debt cannot be confirmed due to undisclosed cash and investing CF.

Cash Flow Quality

earnings_quality: OCF of ¥5.56bn vs net income of ¥3.61bn yields OCF/NI of 1.54x, signaling good earnings convertibility and likely working capital release or efficient collections. FCF_analysis: Investing CF is shown as zero (undisclosed), and capex is not provided, so FCF cannot be reliably calculated. As a proxy, OCF margin is ~8.4% of revenue, which is supportive if capex remains disciplined. working_capital: Inventories are ¥18.41bn within current assets of ¥43.76bn, and the quick ratio of 155% indicates limited over-reliance on inventory for liquidity. The strong OCF suggests net working capital was a tailwind or at least not a drag in the period.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are shown as 0.0%, which should be treated as undisclosed. With EPS of ¥183.87 and positive OCF, capacity exists for dividends, but actual payout cannot be inferred without policy disclosure. FCF_coverage: FCF is not computable from the provided data (investing cash flows undisclosed), so coverage metrics cannot be assessed. On a cash earnings basis, OCF appears to comfortably cover interest and typical maintenance needs, but this is contingent on actual capex. policy_outlook: No dividend policy data is provided. Future distributions will depend on capex intensity, M&A appetite, and management’s capital allocation stance. Monitoring official guidance and historical payout trends is necessary.

Risk Assessment

Business Risks:

• Operating margin compression despite revenue growth indicates vulnerability to input cost inflation and SG&A pressure.
• Potential dependence on non-operating gains (ordinary income > operating income) to support bottom-line results.
• Exposure to cyclical end-markets typical of industrial products could affect volume and pricing.
• Inventory management risk if demand normalizes or slows, given inventories of ¥18.41bn.
• Foreign exchange volatility affecting both non-operating income and imported material costs.

Financial Risks:

• Data gaps on cash and investing flows limit visibility into net cash/debt and capex commitments.
• Interest rate risk is low currently due to 29.1x coverage, but rising rates could marginally increase finance costs.
• Working capital swings could impact OCF given the scale of inventories and receivables typical for the sector.

Key Concerns:

• Negative operating leverage in FY2025 Q3 despite strong revenue growth.
• Reliance on non-operating items to bridge operating shortfalls.
• Insufficient disclosure on capex and cash balances, constraining FCF and dividend analysis.

Investment Implications

Key Takeaways:

• Revenue up 12.2% YoY to ¥66.05bn, but operating income down 4.5% to ¥3.68bn, signaling margin pressure.
• ROE of 7.72% driven by 5.47% net margin, 0.760x asset turnover, and 1.86x leverage.
• Strong liquidity: current ratio 267%, quick ratio 155%, working capital ¥27.39bn.
• Healthy cash conversion: OCF ¥5.56bn (1.54x net income), OCF/EBITDA ~1.16x.
• Ordinary income ¥4.30bn above operating income, implying non-operating support.
• Debt-to-equity 0.55x and interest coverage 29.1x indicate low financial stress.

Metrics to Watch:

• Operating margin trajectory and SG&A ratio in coming quarters.
• Gross margin resilience versus raw material and logistics costs.
• Capex levels and disclosure to enable FCF assessment.
• Composition of non-operating income (FX, equity-method, others) and its volatility.
• Working capital turns (inventory and receivables) and OCF sustainability.
• Dividend policy announcements and payout guidance.

Relative Positioning: Within Japan-listed industrial/functional materials peers, the company exhibits stronger-than-average liquidity and conservative leverage, with mid-range profitability (ROE ~7.7%) and currently pressured operating margins offset by solid non-operating contributions and cash conversion.

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