Carlit Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥17.76B
• Operating Income: ¥1.50B
• Net Income: ¥951M
• EPS: ¥49.82

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

For FY2026 Q2 (consolidated, JGAAP), 株式会社カーリット delivered resilient profitability despite a modest top-line contraction. Revenue declined 1.6% year over year to ¥17,763 million, yet operating income rose 25.9% YoY to ¥1,504 million, evidencing effective cost control and mix improvement. Gross profit is reported at ¥4,377 million (gross margin 24.6%), implying material expansion in value capture versus the prior year given the operating profit growth. Operating margin improved to 8.5%, and ordinary income reached ¥1,657 million, supported by healthy non-operating contributions relative to a small interest burden. Net income increased 20.8% YoY to ¥1,149 million, with a net margin of 6.47%, highlighting improved earnings quality. DuPont analysis indicates ROE of 3.05% for the period, driven by a 6.47% net margin, asset turnover of 0.317x, and financial leverage of 1.49x. Leverage remains conservative, with implied equity of ¥37,708 million against total assets of ¥56,017 million (implied equity ratio about 67% based on balance sheet totals; the reported equity ratio field is unreported). Liquidity is strong: current ratio 231% and quick ratio 195%, underpinned by ¥12,971 million of working capital. Cash generation is robust, with operating cash flow of ¥2,239 million (OCF/Net income ~1.95x), comfortably exceeding accounting earnings. Interest coverage is ample at 71.6x, reflecting low financial risk and solid operating profitability. Inventory discipline appears sound, with estimated inventory days around 47 days on a half-year COGS basis. While dividends are not disclosed in this dataset (DPS and payout ratio fields show as unreported), earnings and cash flow capacity suggest room for returns subject to policy. Some data fields (cash balance, investing cash flow, equity ratio, DPS, shares outstanding) are unreported, which limits precision on per-share and FCF coverage analyses. There is a minor discrepancy between revenue minus cost of sales and reported gross profit, which may reflect classification of cost items or other operating income; conclusions focus on the provided subtotals. Overall, the company demonstrates improved margin quality, strong liquidity, low leverage, and high cash conversion in 1H, positioning it well for the remainder of the fiscal year, subject to demand conditions and input cost trends.

Profitability Analysis

roe_decomposition: ROE 3.05% = Net margin 6.47% × Asset turnover 0.317× × Financial leverage 1.49×. Net margin improvement drove ROE, while low leverage and moderate turnover constrain headline ROE. margin_quality: Gross margin 24.6% and operating margin 8.5% (¥1,504m on ¥17,763m sales) reflect stronger cost discipline and/or improved product mix. Ordinary margin 9.3% exceeds operating margin, indicating positive non-operating balance (net non-operating +¥153m vs. ¥21m interest expense). Net margin at 6.47% is solid for the profile. operating_leverage: Revenue declined 1.6% YoY while operating income rose 25.9% YoY, evidencing favorable operating leverage from cost reductions and higher gross spreads. D&A of ¥841m supports EBITDA of ¥2,345m (13.2% margin), indicating healthy incremental margins.

Growth Assessment

revenue_sustainability: Top line softened 1.6% YoY to ¥17.8bn, suggesting subdued demand or pricing in certain end markets; however, the limited decline points to resilient baseline demand. profit_quality: Operating profit grew 25.9% YoY despite lower sales, driven by better gross economics and tight SG&A control. Ordinary profit outpaced operating profit due to supportive non-operating items and minimal interest burden, though these may be less repeatable than core operations. outlook: Near-term growth hinges on maintaining improved margins and stabilizing demand. If volume recovers modestly with current cost structure, earnings could scale further. Risks include raw material/energy cost re-inflation and demand softness in industrial end-markets; tailwinds include procurement normalization and potential price pass-through.

Financial Health

liquidity: Current ratio 230.6% (¥22,906m CA / ¥9,935m CL) and quick ratio 195.3% show ample near-term coverage. Working capital totals ¥12,971m, offering buffer for volatility. solvency: Debt-to-equity 0.41x (total liabilities ¥15,533m / equity ¥37,708m) signals low balance-sheet risk. Interest coverage is 71.6x, reflecting high capacity to service debt. capital_structure: Implied equity ratio from balance sheet is ~67% (¥37,708m / ¥56,017m). Reported equity ratio field is unreported. Overall leverage is conservative, supporting financial flexibility.

Cash Flow Quality

earnings_quality: OCF ¥2,239m vs. net income ¥1,149m yields OCF/NI of 1.95x, indicating strong cash conversion and limited accrual risk in the period. fcf_analysis: Investing cash flow and capex are unreported, so FCF cannot be reliably computed from this dataset. EBITDA of ¥2,345m and robust OCF suggest capacity to fund maintenance investment and working capital needs. working_capital: Inventories ¥3,503m; estimated inventory days ~47 (Inventories / COGS × ~182 days). Receivables and payables breakdowns are not disclosed, but liquidity ratios imply manageable working capital intensity.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio are unreported here. With EPS of ¥49.82 and strong OCF/NI, capacity for distributions appears supported by earnings, subject to capital allocation priorities. fcf_coverage: FCF coverage cannot be assessed due to unreported investing cash flows and capex. Cash balance is also unreported, limiting visibility on distribution headroom. policy_outlook: Given low leverage and resilient cash generation, the balance sheet can accommodate stable or progressive shareholder returns over a cycle; actual outcomes depend on disclosed dividend policy, capex plans, and M&A needs.

Risk Assessment

Business Risks:

• End-market cyclicality in industrial and specialty chemical demand
• Raw material and energy price volatility impacting gross margin
• Regulatory and safety compliance requirements in chemical manufacturing
• Potential pricing pressure from customers and competitive dynamics
• Foreign exchange exposure on imported inputs or export sales

Financial Risks:

• Working capital swings affecting cash conversion in downcycles
• Potential normalization of non-operating gains reducing ordinary income
• Tax rate variability; effective rate estimated around 27–28% this period

Key Concerns:

• Sustainability of margin gains if input costs reflate
• Limited visibility on capex and investing cash flows (unreported)
• Data discrepancy between reported gross profit and revenue minus COGS (may reflect classification differences)

Investment Implications

Key Takeaways:

• Operating margin expanded to 8.5% despite a 1.6% YoY sales decline
• Strong cash conversion with OCF/NI at ~1.95x
• Low leverage (D/E ~0.41x) and high implied equity ratio (~67%)
• Interest coverage extremely comfortable at ~72x
• ROE of 3.05% constrained by modest turnover and low leverage

Metrics to Watch:

• Gross and operating margin sustainability by segment
• Raw material cost trends and price pass-through
• Capex and investing cash flow disclosures to assess FCF
• OCF/NI ratio and working capital days (especially inventories)
• Ordinary vs. operating income gap (non-operating income durability)
• Effective tax rate normalization vs. historical levels

Relative Positioning: Within Japanese specialty/industrial chemical peers, the company shows above-average balance sheet strength and recent margin momentum, with ROE tempered by conservative leverage and moderate asset turnover.

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