These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.
| Metric | Current Period | Same Period Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥2347.0B | ¥2195.0B | +6.9% |
| Operating Income | ¥-371.6B | ¥625.4B | -3.9% |
| Profit Before Tax | ¥131.9B | ¥134.9B | -2.2% |
| Net Income | ¥82.6B | ¥85.3B | -3.2% |
| ROE | 1.8% | 1.9% | - |
This period’s results saw both operating income and final profit fall from the black into the red due to the recognition of substantial impairment losses, resulting in a significant deterioration in profitability despite higher revenue. Revenue increased to ¥1兆667.95B (¥1兆130.70B in the previous period, +5.3% YoY), but Operating Income fell from a profit of ¥625.38B in the previous period to a loss of ¥371.57B, while Profit Before Tax also declined from ¥608.69B in the previous period to a loss of ¥514.47B. Net Income attributable to owners of the parent fell from a profit of ¥399.29B in the previous period to a loss of ¥639.49B, and basic EPS declined from ¥174.58 to △¥279.01. The primary factor was the sharp increase in impairment losses from ¥95.18B in the previous period to ¥1,079.81B, of which ¥706.45B was attributable to the Digital & Industry segment alone.
【Revenue】Consolidated Revenue was ¥1兆667.95B, representing a +5.3% increase YoY. By segment, Health & Safety recorded a substantial increase in revenue to ¥2,684.71B (25.2% of total revenue, +21.8% YoY), driving overall growth. In contrast, Digital & Industry reported lower revenue of ¥3,299.38B (30.9% of total revenue, -4.2% YoY). Energy Solutions at ¥985.02B (+6.3%), Agri & Foods at ¥1,529.88B (+2.2%), and Other Businesses at ¥2,168.94B (+5.4%) each posted only modest revenue growth.
【Profit and Loss】Operating Income fell from a profit of ¥625.38B in the previous period to a loss of ¥371.57B, representing an approximately ¥997B decline. The primary factor was the sharp increase in other expenses from ¥94.14B to ¥999.90B, driven by the substantial increase in impairment losses (¥95.18B→¥1,079.81B). By segment, Digital & Industry fell from a profit of ¥301.13B in the previous period to a loss of ¥408.88B, primarily due to the recognition of ¥706.45B in impairment losses, making it the central factor behind the consolidated loss. All other segments also recorded lower profits, while financial expenses expanded approximately 3.2-fold from ¥57.78B to ¥184.90B, amplifying the deterioration in Profit Before Tax and final profit. In conclusion, the current period saw higher revenue but lower profit, with both operating and final profit falling into the red.
Digital & Industry recorded revenue of ¥3,299.38B (-4.2%), while operating income was △¥408.88B, representing a shift into the red from a profit of ¥301.13B in the previous period. The primary factor was the recognition of ¥706.45B in impairment losses, with the margin plunging from 8.74% in the previous period to △12.39%. Health & Safety reported higher revenue of ¥2,684.71B (+21.8%), but Operating Income declined to ¥103.95B (¥119.42B in the previous period, -13.0%), with the margin falling from 5.42% to 3.87%. Energy Solutions recorded revenue of ¥985.02B (+6.3%) and Operating Income of ¥63.94B (-21.4%, margin of 6.49%), while Agri & Foods reported revenue of ¥1,529.88B (+2.2%) and Operating Income of ¥36.64B (-26.5%, margin of 2.39%); both segments recorded lower profits. Other Businesses saw a substantial decline in Operating Income to ¥14.75B (¥74.69B in the previous period, -80.3%). With all segments recording lower profits, the substantial impairment loss in Digital & Industry was the central factor behind the consolidated loss.
【Profitability】The Operating Margin deteriorated significantly to △3.5% from 6.2% in the previous period, while the Net Profit Margin attributable to owners of the parent also shifted from 3.9% to △6.0%. ROE (Net Income attributable to owners of the parent ÷ average Equity during the period) was △15.4%, representing a substantial decline from the positive level recorded in the previous period.【Cash Quality】While Operating Income and Net Income fell into the red, Operating Cash Flow (OCF) increased to ¥1,075.83B (¥927.37B in the previous period, +16.0%), indicating a divergence between earnings and cash flow. 【Investment Efficiency】Capital expenditures were ¥736.06B (¥853.20B in the previous period, -13.7%); compared with depreciation and amortization of ¥570.56B, Capex / depreciation and amortization remained above 1.0x at 1.29x, indicating continued investment in excess of depreciation. 【Financial Soundness】The Equity Ratio declined to 32.09% (36.55% in the previous period, -4.46pt), while goodwill decreased to ¥515.87B (¥782.24B in the previous period, -34.1%). This primarily reflects the recognition of impairment losses in Digital & Industry.
Operating Cash Flow (OCF) was ¥1,075.83B, increasing +16.0% from ¥927.37B in the previous period, in contrast to the shift of net profit and loss into the red. This was because non-cash items such as impairment losses of ¥1,079.81B and depreciation and amortization of ¥570.56B offset the loss reported in the income statement on a cash basis. Investing Cash Flow was △¥886.11B, reflecting capital expenditures of ¥736.06B as well as expenditures including the acquisition of shares in subsidiaries. Financing Cash Flow was △¥57.08B; while net short-term borrowings increased by ¥622.56B, repayments of long-term borrowings of ¥537.25B and dividend payments of ¥184.63B were sources of cash outflow. Free Cash Flow after netting was positive at ¥189.72B, maintaining a level sufficient to fund capital expenditures and dividends.
In evaluating the quality of current-period profit, it is necessary to distinguish the non-recurring factor of ¥1,079.81B in impairment losses, which was the primary cause of the operating loss. Equity-method investment income was ¥40.01B (¥43.31B in the previous period), remaining broadly flat and continuing to function as a stable source of earnings. Meanwhile, financial expenses rose sharply from ¥57.78B to ¥184.90B, which appears to represent a structural increase in expenses reflecting the borrowing composition and interest-rate levels. The fact that Operating Cash Flow remained positive and increased despite the net loss indicates a substantial impact from non-cash earnings and losses (accruals), suggesting that cash-based business operations themselves have not been materially impaired. Comprehensive income was △¥299.32B, and the difference from the net loss for the period of △¥662.82B was attributable to other comprehensive income of ¥36.35B, including positive changes in the fair value of financial assets and foreign currency translation adjustments.
These financial results represent the finalized results for the full year, and the disclosed earnings forecasts relate to the outlook for the next period. For the next period, the Company plans Revenue of ¥1兆1,000B ( +3.1% versus current-period actual Revenue of ¥1兆667.95B), Operating Income of ¥780B (a return to profitability from the current-period operating loss of ¥371.57B), EPS of ¥218.88, and DPS of ¥64. Assuming that the non-recurring factor of the substantial impairment losses recorded this period has run its course, the Company appears to anticipate normalized profitability in the next period. There have been no recent revisions to the earnings or dividend forecasts.
As Net Income attributable to owners of the parent was a loss of △¥639.49B for the period, the Payout Ratio cannot be calculated. Dividend payments on a cash flow basis were ¥184.63B, increasing from ¥151.14B in the previous period, indicating that the dividend level was maintained despite the loss. Share repurchases remained negligible at ¥0.03B. The forecast for the next period indicates EPS of ¥218.88 and DPS of ¥64, implying a forecast Payout Ratio of approximately 29.2%.
Possibility of recurring impairment risk: The Digital & Industry segment recognized impairment losses of ¥706.45B, and consolidated goodwill declined 34.1% from ¥782.24B to ¥515.87B. Additional impairment losses may arise for the remaining goodwill and long-lived assets depending on the business environment.
Increase in financial expenses: Financial expenses increased approximately 3.2-fold from ¥57.78B to ¥184.90B. Borrowings totaled ¥4,684.55B, comprising current borrowings of ¥1,770.19B and non-current borrowings of ¥2,914.36B, creating a risk that higher interest burdens may pressure profitability.
Broadening deterioration in profitability: All segments other than Digital & Industry—Energy Solutions, Health & Safety, Agri & Foods, and Other Businesses—also recorded lower Operating Income. This may indicate that profitability has deteriorated across the businesses rather than being limited to a one-off factor in a single segment.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | -15.8% | – | – |
| Net Profit Margin | 3.5% | – | – |
The Company’s Operating Margin is negative and is at a challenging level even within the industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 6.9% | – | – |
The Revenue Growth Rate remains in positive territory.
※Source: Compiled by the Company
Due to the recognition of ¥1,079.81B in impairment losses, Operating Income fell from a profit of ¥625.38B in the previous period to a loss of ¥371.57B, and full-year Net Income attributable to owners of the parent also resulted in a loss of ¥639.49B. The results were characterized by an extremely significant impact from the non-recurring impairment factor on earnings.
Meanwhile, Operating Cash Flow (OCF) was ¥1,075.83B, securing a +16.0% increase YoY, and Free Cash Flow remained positive at ¥189.72B. In contrast to the deterioration in earnings, the Company’s cash-generating capacity itself was not impaired.
The Equity Ratio declined to 32.09% (36.55% in the previous period), while goodwill decreased to ¥515.87B following the recognition of impairment losses. The forecast for the next period anticipates a return to profitability with Operating Income of ¥780B, making the pace of profitability recovery after the impairment losses recorded this period have run their course a key point to monitor.
This is a mechanically calculated reference range based solely on publicly disclosed data using a residual income model (Ohlson type, with an explicit 5-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear | ¥2,032 |
| base | ¥2,093 |
| bull | ¥2,144 |
| Calculation Assumption | Value |
|---|---|
| Book Value Per Share (BPS) | ¥1,917 |
| Adjusted Forecast EPS | ¥235.3 |
| Cost of Equity r | 9.15% (10-year government bond 2.65% + equity risk premium 6.00% + size premium 0.50%) |
| Residual Income Persistence Coefficient ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 29.2% |
| Forecast EPS Confidence Adjustment | ×1.075 (based on the track record of guidance achievement in the same industry) |
| Implied PBR / PER |
Sensitivity: ¥2,034–¥2,155 at ±1% for the cost of equity, and ¥2,089–¥2,100 at ±0.1 for ω.
Notes:
(Calculation model: residual income model / Interest-rate reference month: 2026-06 / This figure does not predict or guarantee future share prices)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting with professionals as necessary.
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| 1.09x / 8.9x |