Dualtap Co.,Ltd. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥393M
• Operating Income: ¥-71M
• Net Income: ¥-3M
• EPS: ¥-21.28

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 weak with a deep revenue contraction and a continued operating loss, despite a marginal YoY improvement in operating income. Revenue was 3.93 (−77.3% YoY), indicating a sharp slowdown likely driven by deal/hand-over timing in a project-based real estate model. Operating income was −0.71 (+2.4% YoY), ordinary income was −0.82 (−6.4% YoY), and net income was −0.88 (−57.4% YoY), confirming continued loss-making conditions at all profit layers. Gross profit was reported at 2.61, and SG&A at 2.44, implying positive contribution from core sales activities; however, the reported cost of sales figure appears inconsistent with revenue and gross profit, suggesting classification/timing issues in disclosures. The current operating margin stands at −18.1% (−0.71/3.93), reflecting insufficient scale to absorb fixed costs. Gross margin is disclosed at a high 66.4%, but its comparability is uncertain due to the cost of sales anomaly; margin trends vs YoY are not inferable from the provided data. Non-operating expenses (0.19) exceeded non-operating income (0.02), and interest expense (0.14) weighed on ordinary profit, highlighting debt servicing pressure. Interest coverage was a weak −5.24x, flagging earnings’ inability to cover interest from operations this quarter. Liquidity is ample on paper (current ratio 270.7%, cash 6.49), but near-term refinancing needs exist given short-term loans of 10.00 versus cash on hand. Balance sheet shows total assets 53.11, equity 23.62, and D/E at 1.25x, a leveraged but not excessive profile for real estate, though close monitoring is warranted in loss-making phases. ROE calculated at −3.7% and ROIC at −0.9% point to insufficient returns on capital currently. Cash flow quality cannot be assessed due to missing cash flow statements, limiting visibility on the durability of earnings and working capital movements. The effective tax rate reads abnormally high (400.8%) due to losses and small tax items; this is a mechanical effect, not a recurring structural burden. Forward-looking, the magnitude of revenue decline suggests back-end loaded deliveries or a light pipeline in Q1; recovery will hinge on the timing and margin of property handovers in subsequent quarters. Given the project-driven nature of the business, quarterly volatility can be high; therefore, full-year guidance, contracted backlog, and inventory pipeline will be critical for assessing rebound potential. Overall, Q1 sets a soft starting point, and improvements will require conversion of pipeline to revenue, tighter SG&A control, and stabilization of financing costs.

Profitability Analysis

DuPont decomposition (ROE = Net Profit Margin × Asset Turnover × Financial Leverage): ROE (calc) −3.7% = (−22.4%) × 0.074 × 2.25x. Component changes vs prior period are not directly computable due to limited YoY breakdown; however, the largest drag is clearly the negative net margin driven by subscale revenue and interest burden. Business driver: Revenue fell 77.3% YoY, leaving fixed SG&A (2.44) under-absorbed and turning operating income negative despite a reported gross profit of 2.61. Financial leverage (2.25x in the DuPont set) amplifies the negative margin’s impact on equity returns. Sustainability: The negative margin appears tied to timing of project handovers; margins could normalize with larger closings, but interest expense will continue to pressure ordinary profit until earnings scale improves. Flags: SG&A of 2.44 against revenue of 3.93 indicates a high cost-to-sales ratio; without revenue recovery, operating leverage works against profitability. Non-operating expenses (notably interest of 0.14) are meaningful relative to operating loss, keeping ordinary income below operating income. Current operating margin −18.1% and net margin −22.4% require significant revenue conversion and/or cost rationalization to return to break-even.

Growth Assessment

Top-line contracted sharply (−77.3% YoY to 3.93), indicating either a light delivery quarter or back-end loading typical of real estate handover cycles. Profit growth is negative at the bottom-line (net income −57.4% YoY), and ordinary income declined 6.4% YoY despite a slight improvement in operating income, reflecting higher financing drag. With limited visibility on backlog and inventories (unreported), the sustainability of revenue recovery cannot be assessed from this dataset. Profit quality: one-off items are not evident; non-operating result is primarily interest-related, implying recurring financing costs rather than transitory gains/losses. Outlook hinges on scheduled property deliveries and the mix/margin of those projects; if handovers accelerate in Q2–Q4, operating leverage could swing margins to positive territory. Near term, maintaining SG&A discipline and controlling financing costs will be critical to prevent further erosion of equity when revenues are temporarily low.

Financial Health

Liquidity: Current ratio 270.7% and quick ratio 270.7% indicate ample short-term liquidity; no warning for current ratio (<1.0) is triggered. Working capital is 24.32 with cash and deposits of 6.49, providing a buffer but not fully covering short-term loans of 10.00; dependence on operating cash conversion or refinancing persists. Solvency: D/E ratio 1.25x is within typical real estate ranges but adds risk while earnings are negative. Total loans (short-term 10.00, long-term 14.23) sum to 24.23 against equity of 23.62, implying leverage just above 1x on a gross debt-to-equity basis. Maturity mismatch: Current assets 38.57 comfortably exceed current liabilities 14.25; however, cash coverage of short-term debt is modest, pointing to rollover risk if cash generation lags. Off-balance sheet obligations: Not disclosed; none can be inferred from the provided data. No explicit covenant or guarantee information available.

Cash Flow Quality

Operating cash flow is unreported; OCF/Net Income cannot be calculated, preventing a quality check versus accrual earnings. Free cash flow is unreported; hence, we cannot assess coverage for dividends or capex needs. Working capital: With revenue falling 77.3% YoY and no inventory/receivable details disclosed, we cannot detect potential timing-based working capital swings or deliberate drawdowns. Given negative operating income and weak interest coverage (−5.24x), internal cash generation likely undershot financing needs in the quarter, elevating reliance on cash balances or debt. No evidence of extraordinary cash inflows/outflows is available in the dataset.

Dividend Sustainability

Dividend information is unreported. The calculated payout ratio at −59.9% is not meaningful due to negative earnings. Without OCF/FCF data, dividend coverage cannot be assessed. Given negative net income and weak interest coverage, sustaining cash dividends would depend on future-period cash inflows from property deliveries; absent visibility, a conservative stance on distribution capacity is prudent. Policy guidance and full-year outlook are needed to refine dividend sustainability.

Risk Assessment

Business Risks:

• Project-delivery timing risk leading to high quarterly revenue volatility (−77.3% YoY in Q1).
• Margin risk from under-absorption of SG&A when revenue is low (operating margin −18.1%).
• Execution risk on pipeline conversion amid limited disclosed backlog/inventory data.
• Pricing risk in residential/investment condominium markets affecting gross margins.

Financial Risks:

• Interest coverage −5.24x indicates earnings cannot cover interest this quarter.
• Leverage at D/E 1.25x with short-term loans of 10.00 creates refinancing dependence.
• ROIC −0.9% (<5% warning) signals sub-par capital efficiency during the period.
• Potential liquidity strain if handovers slip and cash remains at 6.49 vs short-term debt 10.00.

Key Concerns:

• Data inconsistencies in cost of sales versus gross profit suggest classification/timing effects, limiting margin analysis reliability.
• Lack of cash flow disclosures obscures earnings quality and FCF outlook.
• Effective tax rate distortion (400.8%) complicates normalized EPS inference in a loss quarter.

Investment Implications

Key Takeaways:

• Soft quarter with revenue at 3.93 and operating loss of −0.71 despite slight YoY improvement.
• Interest burden (0.14) and non-operating expenses (0.19) keep ordinary profit negative.
• Liquidity headline metrics are strong (current ratio 270.7%), but cash vs short-term debt is tight.
• Capital efficiency is weak (ROE −3.7%, ROIC −0.9%) pending revenue normalization.
• Quarterly volatility likely reflects project timing; full-year recovery depends on delivery schedule.

Metrics to Watch:

• Contracted backlog and scheduled handovers for Q2–Q4.
• Operating cash flow and working capital movements (inventories/receivables).
• SG&A run-rate vs revenue scaling to gauge operating leverage.
• Average borrowing rate and interest expense trajectory.
• Debt maturity profile and refinancing actions.

Relative Positioning: Within Japan’s small-cap real estate developers, the company currently exhibits below-peer revenue momentum and weaker interest coverage, offset by a relatively adequate current ratio; performance could normalize if project deliveries accelerate, but near-term earnings visibility is limited due to absent cash flow and backlog disclosure.

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