| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1338.7B | ¥1461.7B | -8.4% |
| Operating Income / Operating Profit | ¥46.4B | ¥41.4B | +12.2% |
| Ordinary Income | ¥39.9B | ¥22.0B | +81.2% |
| Net Income | ¥140.6B | ¥-62.3B | +325.5% |
| ROE | 20.9% | -9.6% | - |
For the fiscal year ended March 2026, Revenue was ¥1338.7B (YoY -¥123.0B -8.4%), Operating Income was ¥46.4B (YoY +¥5.0B +12.2%), Ordinary Income was ¥39.9B (YoY +¥17.9B +81.2%), and Net Income attributable to parent company shareholders was ¥140.6B (YoY +¥146.8B; prior year was a loss). Despite the revenue decline, operating margin improved to 3.5% (up +0.7pt from 2.8% a year earlier) and ordinary income margin improved to 3.0% (up +1.5pt from 1.5%), reflecting higher profitability. The large improvement in Net Income was mainly due to the reversal of prior-year special losses (subsidiary restructuring allowance ¥66.3B and impairment losses ¥46.3B); special gains/losses in the current period remained net +¥2.4B. Operating Cash Flow was ¥77.2B, capital expenditure was ¥74.2B, leaving Free Cash Flow of ¥1.8B barely positive. Cash after dividends and share buybacks was ¥158.8B (down ¥40.9B from ¥199.7B a year earlier).
[Revenue] Revenue of ¥1338.7B (-8.4%) declined as the core Plastic Products Business recorded ¥1091.8B (-9.6%) and the Chemical Business ¥261.8B (-3.8%), both below prior-year levels. By region, declines in North America ¥655.6B (from ¥746.5B, -12.2%) and Asia ¥293.1B (from ¥337.4B, -13.1%) weighed on results, while Japan ¥388.3B (from ¥375.6B, +3.4%) showed a small increase. By customer, sales to major customer Honda Development & Manufacturing of America were ¥498.9B (from ¥521.6B) and to Honda Motor Co., Ltd. were ¥235.0B (from ¥220.8B); the North America shortfall was the main driver of the revenue decline. Gross margin improved to 18.1% (up +1.9pt from 16.2%) due to progress in cost control despite lower sales.
[Profitability] Operating Income of ¥46.4B (+12.2%) reflected only a slight increase in SG&A to ¥195.5B (SG&A ratio 14.6%, from 13.3% prior year). Improvement in Plastic Products margins (5.1%, up +1.0pt from 4.1%) drove company-level results, while Chemical margins declined to 5.9% (down -0.7pt from 6.6%). Non-operating items included interest expense of ¥7.3B against dividend income ¥2.3B and interest income ¥1.7B, and a large reduction in foreign exchange losses from ¥14.7B in the prior year to ¥0.2B in the current year, contributing to an 81.2% increase in Ordinary Income. Special gains/losses were net +¥2.4B (mainly gain on sale of fixed assets ¥1.3B; prior year net -¥87.8B), Pre-tax Income was ¥42.4B (prior year -¥65.7B) and after an effective tax rate of 40.9% resulted in Net Income of ¥140.6B. In summary, despite lower sales, cost improvements and non-operating improvements produced higher profits.
The Plastic Products Business posted Revenue of ¥1091.8B (-9.6%) but Operating Income of ¥55.6B (+35.7%), with margin improving to 5.1% (up +1.0pt from 4.1%), indicating substantial improvement in profitability. The increase in profit despite lower sales is attributed to yield improvements, optimization of material costs, and revision of headquarters cost allocations. The Chemical Business recorded Revenue of ¥261.8B (-3.8%), Operating Income ¥15.4B (-14.1%), and margin 5.9% (down -0.7pt from 6.6%), reflecting continued challenging conditions. Corporate expenses / adjustments were -¥24.7B (prior year -¥17.6B), increasing the charges deducted from segment profits due to consolidation of headquarters costs. The Plastic Products Business generated approximately 120% of consolidated operating profit, while the Chemical Business contributed about 33%.
[Profitability] ROE 20.9% recovered sharply from -11.3% a year earlier, largely a rebound effect from the prior-year large loss; the Net Income of ¥140.6B is heavily influenced by the one-off reversal of prior special losses. Operating margin 3.5% (up +0.7pt from 2.8%) and gross margin 18.1% (up +1.9pt from 16.2%) improved, but the rise in SG&A ratio to 14.6% (from 13.3%) limited the overall improvement. [Cash Quality] Operating Cash Flow ¥77.2B is 1.66x Operating Income ¥46.4B; operating subtotal was ¥98.1B including Depreciation ¥63.4B, from which inventory increases -¥45.8B, accounts receivable decrease +¥25.5B, accounts payable decrease -¥8.3B, and tax payments -¥17.2B produced the cash flow. OCF/EBITDA (Operating Income + Depreciation) is ¥77.2B ÷ ¥109.8B = 0.70x, at a borderline level, with inventory increases impeding cash conversion. [Investment Efficiency] Work-in-process ¥78.0B accounts for 40.4% of total inventory, indicating process congestion. Accounts receivable ¥297.0B implies DSO = (297.0 ÷ 1338.7) × 365 = 81 days, trending long, leaving substantial room to improve working capital efficiency. CapEx ¥74.2B is 1.17x depreciation ¥63.4B, outpacing renewal investment, but construction in progress ¥51.6B (from ¥26.6B prior year, +¥25.0B) has accumulated and progress to operation will be key. [Financial Soundness] Equity Ratio 54.4% (up +3.3pt from 51.1%) and Current Ratio 146%, Quick Ratio 132% indicate good short-term liquidity. Interest-bearing debt (short-term borrowings ¥150.9B + long-term borrowings ¥22.2B + bonds ¥8.6B) totals ¥181.7B, Debt/EBITDA 1.65x and Debt/Equity 0.27x are conservative, but short-term borrowings account for 26.8% of total liabilities and refinancing risk should be monitored.
Operating Cash Flow was ¥77.2B (down -17.4% from ¥93.5B prior year), starting from Operating Income ¥46.4B plus Depreciation ¥63.4B and non-cash impairment charges to reach an operating subtotal of ¥98.1B. Working capital movements were dominated by inventory increases -¥45.8B, primarily due to accumulation of work-in-process (from ¥41.0B prior year to ¥78.0B, +¥37.0B). Accounts receivable decreased from ¥319.5B to ¥297.0B (-¥22.5B), providing +¥25.5B cash inflow, while accounts payable decreased from ¥189.1B to ¥185.8B (-¥3.3B), causing -¥8.3B cash outflow. Corporate tax payments -¥17.2B and interest payments -¥7.2B finalized Operating CF. Investing CF was -¥75.5B, driven by CapEx -¥74.2B; acquisition of subsidiary shares +¥3.6B and disposals -¥3.6B nearly offset, and subsidy receipts +¥0.6B were recorded. Financing CF was -¥44.3B, including net short-term borrowings -¥13.0B, long-term borrowings raised +¥12.3B and repaid -¥14.3B, dividends paid -¥16.0B, and share buybacks -¥9.2B. FCF ¥1.8B is insufficient to cover dividends and buybacks, and cash decreased from ¥199.7B at the beginning of the period to ¥158.8B at the end, a decline of ¥40.9B.
Operating Income ¥46.4B is primarily composed of recurring operating earnings; non-operating income ¥5.6B was mainly dividend income ¥2.3B and interest income ¥1.7B, representing 0.4% of Revenue and thus immaterial. Non-operating expenses ¥12.0B were mainly interest expense ¥7.3B and fees ¥3.0B; the contraction of foreign exchange losses from ¥14.7B to ¥0.2B materially contributed to the large improvement in Ordinary Income. Special gains ¥3.0B were mainly gain on sale of fixed assets ¥1.3B and subsidies ¥0.9B; special losses ¥0.6B were mainly loss on disposal of fixed assets ¥0.5B — both temporary and limited in scale. The prior year had special losses totaling ¥117.7B (impairment loss ¥46.3B and subsidiary restructuring allowance ¥66.3B), which have run their course. From Pre-tax Income ¥42.4B and an effective tax rate of 40.9% (income taxes ¥17.4B), Net Income reached ¥140.6B, and Comprehensive Income totaled ¥50.0B including foreign currency translation adjustments ¥20.0B, valuation differences on securities ¥6.7B, and retirement benefit adjustments ¥2.3B. Operating CF / Net Income is 0.55x and Operating CF / Operating Income is 1.66x, so cash backing for profits exists to some degree; however, OCF/EBITDA at 0.70x and inventory increases act as a drag, so earnings quality is assessed as moderate.
Full-year forecast expects Revenue ¥1944.0B (YoY +45.2%), Operating Income ¥60.0B (YoY +29.4%), and Ordinary Income ¥53.0B (YoY +32.7%), implying a substantial rebound. Given Q2 results Revenue ¥1338.7B and Operating Income ¥46.4B, the second half requires additional Revenue ¥605.3B and Operating Income ¥13.6B, yielding progress rates of 68.9% for Revenue and 77.3% for Operating Income, which are relatively high. The revenue recovery is predicated on normalization of production and shipments in North America and Asia and ramp-up of new projects; Operating Income is expected to improve through revenue growth and fixed-cost absorption, but achieving inventory and receivables compression and improving cash conversion rates are conditions for realization. EPS forecast ¥216.55 versus current period actual ¥170.79 (prior year -¥532.37); dividend forecast ¥62.5 versus current period actual ¥115 (prior year ¥52.5), so market focus will be on second-half profit levels and alignment with dividend policy.
Annual dividend ¥115 (interim ¥57.5 × 2) totaling approximately ¥16.0B, representing a Payout Ratio of 67.3%, a relatively high level. Dividend coverage by FCF is ¥16.0B ÷ ¥1.8B = 8.9x, substantially exceeding FCF, indicating dividends were effectively funded from beginning cash or borrowings. Share buybacks amounted to ¥9.2B and proceeds from share disposals ¥2.3B, net buybacks ¥6.9B, and total shareholder returns (dividends + net share buybacks) were approximately ¥22.9B, 12.7x FCF of ¥1.8B. The Payout Ratio returns roughly two-thirds of profits, but because current Net Income includes a rebound from prior-year special losses, sustainability should be evaluated conditional on improvements in Operating CF and FCF. The full-year dividend forecast of ¥62.5 implies a cut from current-period ¥115, seen as normalization after one-off factors.
Major customer concentration and short-term debt bias: Approximately 37% of sales are to Honda Development & Manufacturing of America and Honda Motor Co., Ltd., making revenue vulnerable to customer production adjustments and inventory adjustments. Short-term borrowings ¥150.9B account for 83% of interest-bearing debt, and the short-term debt ratio reaches 87%. Cash / short-term debt is 1.05x so the company can withstand the near term, but refinancing and rate reset risks exist.
Expansion of working capital and deterioration of cash conversion: Work-in-process ratio 40.4% and DSO 81 days indicate heavy working capital and OCF/EBITDA 0.70x shows cash conversion challenges. Inventory increase -¥45.8B pressured Operating CF and FCF ¥1.8B is far below shareholder returns ¥22.9B. Process congestion and prolonged receivable collection impair liquidity and capital efficiency.
Low-margin structure and high tax burden: Gross margin 18.1% and operating margin 3.5% are low relative to peers, and the effective tax rate 40.9% compresses net margins and constrains ROE improvement. R&D ratio 1.9% indicates limited investment in technological differentiation, restricting pricing power and product-mix improvement. While cost improvements proceeded during the downturn, it is uncertain whether leverage effects will persist in a revenue upturn.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 3.5% | 7.8% (4.6%–12.3%) | -4.3pt |
| Net Margin | 10.5% | 5.2% (2.3%–8.2%) | +5.3pt |
Operating margin is 4.3pt below the industry median, placing profitability at the lower end of peers. Net margin appears high due to the rebound from prior-year special losses, but recurring operating-level earnings lag peers.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | -8.4% | 3.7% (-0.4%–9.3%) | -12.1pt |
Revenue growth underperforms the industry median by 12.1pt and is in a contraction phase. If the strong rebound forecast for the next period realizes, the company could move toward the top of the industry, but currently growth is lagging.
※Source: Company compilation
Despite lower sales, cost management and non-operating improvements drove Ordinary Income +81.2% and a recovery in profitability. If the Plastic Products Business sustains margin at 5.1%, it could contribute to mid-term earnings stability. However, the operating margin of 3.5% is 4.3pt below the industry median of 7.8%, and the extent to which fixed-cost absorption and leverage will materialize in a revenue upturn is a key point to monitor.
FCF ¥1.8B versus shareholder returns ¥22.9B (12.7x FCF) and short-term borrowings ratio 83% / short-term debt ratio 87% require ongoing liquidity monitoring. Cash / short-term debt 1.05x provides short-term resilience, but reduction of inventory and receivables (shortening DSO 81 days, correcting work-in-process ratio 40.4%) and improvement in OCF/EBITDA 0.70x are prerequisites for sustainable returns and financial stability.
The next-period forecast of Revenue +45.2% and Operating Income +29.4% assumes a strong rebound, but first-half progress of Revenue 69% and Operating Income 77% is high, and the certainty of second-half production/shipments normalizing and new project ramp-ups is critical. If process congestion (work-in-process increase ¥37.0B) is resolved and receivable collections accelerate, simultaneous improvement in cash generation and capital efficiency can be expected.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the Company based on publicly disclosed financial statements. Investment decisions should be made at your own responsibility; consult a professional advisor as appropriate.