Maruo Calcium Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥6.03B
• Operating Income: ¥-21M
• Net Income: ¥70M
• EPS: ¥40.71

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

Maruo Calcium Co., Ltd. (41020) reported FY2026 Q2 consolidated results under JGAAP showing top-line softness and weak core profitability but resilient cash generation and a solid balance sheet. Revenue declined 6.8% YoY to ¥6.03bn, with gross profit of ¥1.134bn and a gross margin of 18.8%. Operating income slipped to a ¥21m loss (operating margin of approximately -0.3%), indicating cost pressures and/or elevated SG&A relative to the reduced sales base. Despite the operating loss, ordinary income was ¥96m and net income rose 26.6% YoY to ¥86m, implying sizable non-operating gains offsetting core weakness. The DuPont decomposition yields a net margin of 1.43%, asset turnover of 0.358x, and financial leverage of 1.69x, producing an ROE of 0.86% for the period. EBITDA was ¥223m (3.7% margin), supported by depreciation and amortization of ¥244m, underscoring that non-cash charges materially bridge the gap from operating loss to positive EBITDA. Interest expense was modest at ¥6.5m, but the negative operating income results in a reported interest coverage of -3.2x; ordinary income coverage is positive but not disclosed as a metric. Operating cash flow was strong at ¥581m (OCF/NI 6.75x), reflecting robust cash conversion from earnings and likely working-capital release alongside depreciation add-backs. The balance sheet appears conservative: current ratio of 264%, quick ratio of 245%, and a debt-to-equity ratio of 0.67x indicate ample liquidity and moderate leverage. Working capital stands at ¥5.323bn, and inventories of ¥614m appear reasonable relative to half-year sales. Financing cash flow was a sizable inflow of ¥1.39bn, suggesting new borrowings or other financing sources strengthened liquidity; cash and equivalents were not disclosed in the XBRL feed. Several items are unreported (e.g., equity ratio shown as 0.0%, investing cash flow, cash balance, share counts, FCF), which constrains precision on capital returns and per-share metrics. Dividend per share is shown as 0, and payout/FCF coverage are not assessable from the provided data. Overall, the period reflects demand softness and negative operating leverage at the operating income level, offset by non-operating gains and strong cash generation, with the company entering the second half from a position of balance-sheet strength.

Profitability Analysis

• ROE decomposition (DuPont): Net margin 1.43% × Asset turnover 0.358 × Leverage 1.69 = ROE ~0.86%, consistent with the reported figure.
• Margins: Gross margin 18.8% demonstrates basic pricing/spread is intact, but operating margin was -0.3%, implying SG&A and other operating costs exceeded gross profit headroom at the H1 run-rate. Ordinary margin improved to 1.6% on non-operating support; net margin printed at 1.43%.
• Operating leverage: With revenue down 6.8% YoY, fixed-cost absorption likely deteriorated, driving the swing to an operating loss. EBITDA margin of 3.7% indicates cash earnings capacity exists but is thin.
• Margin quality: The divergence between operating and ordinary/net income suggests reliance on non-operating gains (e.g., subsidies, FX, investment income) to offset core weakness; sustainability is less certain than recurring operating profit.
• Cost structure: Depreciation of ¥244m vs. operating loss of ¥21m shows that non-cash expenses explain much of the gap; incremental volume recovery could quickly restore operating profitability if pricing/mix hold.
• Interest burden: Interest expense is low at ¥6.5m, so financing costs are not the primary driver of margin pressure.

Growth Assessment

• Top line: Revenue declined 6.8% YoY to ¥6.03bn, indicating demand softness in H1.
• Profit trajectory: Despite lower sales, net income increased 26.6% YoY to ¥86m, driven by non-operating items rather than operating improvement (operating income was a ¥21m loss).
• Revenue sustainability: Without evidence of new capacity, product launches, or pricing, revenue visibility remains cautious; inventory levels (~¥614m) look reasonable, reducing risk of forced discounting.
• Profit quality: The gap between operating and ordinary/net income reduces earnings quality, as recurring operating earnings were negative while headline net profit benefited from non-operating factors.
• Outlook considerations: A modest rebound in volumes or successful pass-through of costs could restore operating profitability given positive EBITDA; however, if revenue softness persists, negative operating leverage may continue to weigh on core earnings.

Financial Health

• Liquidity: Current ratio 264% and quick ratio 245% signal strong short-term solvency. Working capital is ¥5.323bn, providing a substantial cushion.
• Solvency: Debt-to-equity 0.67x (Total liabilities ¥6.661bn vs. equity ¥9.949bn) indicates moderate leverage. Interest burden is low (¥6.5m), reducing financial stress.
• Capital structure: Financial leverage of 1.69x (Assets ¥16.833bn / Equity ¥9.949bn) is conservative. Equity ratio was not disclosed (0.0% placeholder).
• Cash position: Cash and equivalents were not disclosed; however, positive operating and financing cash flows suggest liquidity likely improved during the half.
• Asset efficiency: Asset turnover at 0.358x (period basis) is modest; improving utilization could enhance ROE.

Cash Flow Quality

• Earnings-to-cash conversion: OCF of ¥581m vs. net income of ¥86m gives OCF/NI of 6.75x, supported by ¥244m of depreciation and likely favorable working-capital movements. This indicates strong cash conversion for the period.
• Free cash flow: Investing cash flow was not disclosed (shown as 0), so FCF cannot be reliably computed; the FCF figure shown as 0 should be treated as unreported.
• Working capital dynamics: With inventories at ~10% of H1 sales and strong OCF, it is likely that receivable collections and/or inventory normalization contributed positively; detailed component changes were not provided.
• Sustainability: While cash conversion is solid, it partly reflects non-operating contributions to earnings and potentially timing effects in working capital; persistence should be monitored into H2.

Dividend Sustainability

• Reported DPS: 0.00 and payout ratio 0.0% (both likely reflect no dividend declared in the data set or lack of disclosure during the interim period).
• Coverage: FCF data are not available (investing CF not disclosed), so FCF-based coverage cannot be assessed.
• Capacity indicators: Strong OCF (¥581m) and moderate leverage (0.67x D/E) suggest capacity exists in principle, but with operating income negative and earnings quality reliant on non-operating items, a conservative stance on distributions would be prudent until core profitability normalizes.
• Policy outlook: No guidance on dividend policy was provided; interim non-payment is common in some smaller JGAAP reporters and does not necessarily indicate a change in full-year policy.

Risk Assessment

Business Risks:

• Demand softness evidenced by a 6.8% YoY revenue decline.
• Negative operating income points to adverse operating leverage if sales remain weak.
• Margin pressure from input costs and fixed-cost absorption risk.
• Dependence on non-operating gains to support ordinary and net income in the period.
• Potential pricing pressure in end markets if volumes do not recover.

Financial Risks:

• Negative interest coverage on EBIT basis (-3.2x) in the half.
• Unreported cash and investing flows limit visibility on liquidity runway and capex commitments.
• Potential volatility in non-operating items (FX, investment income) that supported profits.
• Execution risk in working-capital management if sales mix or timing shifts in H2.

Key Concerns:

• Sustainability of non-operating income that lifted ordinary and net profit.
• Restoring operating profitability amid lower sales.
• Limited disclosure on cash, capex, and share metrics constraining per-share analysis.

Investment Implications

Key Takeaways:

• Core operations posted a small operating loss despite an 18.8% gross margin, highlighting negative operating leverage.
• Ordinary and net income remained positive due to non-operating gains; earnings quality is mixed.
• Cash generation was strong (OCF ¥581m), aided by depreciation and likely working-capital release.
• Balance sheet liquidity is ample (current ratio 264%, quick ratio 245%) with moderate leverage (D/E 0.67x).
• Several key disclosures (cash balance, investing CF, equity ratio, share counts) are missing, limiting precision on valuation and capital returns.

Metrics to Watch:

• Revenue trajectory and order trends in H2 to gauge recovery from -6.8% YoY.
• Operating income and EBITDA margins to confirm improvement in core profitability.
• Non-operating income composition and sustainability.
• Working-capital movements (receivables, inventories) and OCF persistence.
• Capex and investing cash flows (when disclosed) to assess true FCF.
• Interest coverage on an EBIT basis as operating profits normalize.

Relative Positioning: Financially conservative with strong liquidity and moderate leverage, but currently weaker on core operating profitability versus peers that maintained positive operating margins; cash generation and balance sheet strength provide resilience pending demand and margin recovery.

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