RIKEN VITAMIN CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥47.27B
• Operating Income: ¥4.09B
• Net Income: ¥3.26B
• EPS: ¥113.03

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

Riken Vitamin (TSE:4526) reported FY2026 Q2 (cumulative) consolidated results with modest top-line growth but weaker operating profitability. Revenue was ¥47.265bn (+0.2% YoY), indicating flat demand and/or limited price/mix gains. Gross profit reached ¥15.747bn, implying a gross margin of 33.3%, which is solid for a food ingredients/seasonings mix but suggests limited incremental margin expansion in the half. Operating income declined 11.6% YoY to ¥4.091bn, pointing to negative operating leverage as costs and/or SG&A grew faster than sales. Ordinary income was ¥4.368bn, supported by minimal interest burden (¥63m), underscoring a conservative balance sheet. Net income rose 3.3% YoY to ¥3.361bn, aided by a normal tax rate and limited financial expenses. Operating margin stands at ~8.7% (OI/Revenue), down YoY, while the net margin of 7.1% (DuPont input) held resilient. The DuPont-based ROE is 4.17%, a function of a 7.11% net margin, 0.419x asset turnover, and 1.40x financial leverage, signaling earnings are capital-lightly leveraged and driven more by margin than leverage. Liquidity is strong: current ratio 311% and quick ratio 270% reflect ample short-term resources and working capital of ¥44.57bn. The capital structure is conservative with debt-to-equity of 0.42x and implied equity ratio around the low-70% range despite the reported 0.0% (not disclosed) equity ratio metric. Interest coverage is robust at ~65x, showing minimal refinancing or rate sensitivity. Inventory of ¥8.587bn appears manageable relative to scale, but turnover details are not disclosed. Cash flow data (OCF/FCF) and D&A were not reported in XBRL; thus, cash conversion and capex intensity cannot be assessed from this filing. Dividend data (DPS, payout, FCF coverage) are also unreported, limiting visibility on shareholder returns policy from this dataset. Overall, the half shows stable revenue with margin compression at the operating level, solid net results, and very strong balance sheet resilience. Near-term focus should be on cost pass-through, SG&A discipline, and restoring operating leverage, while the low leverage profile provides downside protection.

Profitability Analysis

ROE_decomposition: DuPont ROE of 4.17% = Net profit margin 7.11% × Asset turnover 0.419 × Financial leverage 1.40. The profile indicates modest profitability, low asset intensity, and conservative leverage. Improving asset turnover and sustaining margins would be the most direct levers for ROE uplift. margin_quality: Gross margin is 33.3% (¥15.747bn/¥47.265bn). Operating margin is ~8.7% (¥4.091bn/¥47.265bn) and fell YoY given OI -11.6% on flat sales, suggesting cost/SG&A pressure. Net margin at 7.11% is supported by low interest expense and a normalizing tax rate. Ordinary income exceeded operating income by ¥277m, implying modest non-operating gains or FX effects. operating_leverage: With revenue +0.2% YoY but operating income -11.6% YoY, incremental operating leverage was negative in the half. This points to limited price/mix gains and/or cost inflation in raw materials, logistics, utilities, and SG&A that outpaced sales growth.

Growth Assessment

revenue_sustainability: Top-line growth of +0.2% YoY suggests stable but subdued demand in core segments. Given the company’s product set (seasonings, food ingredients, seaweed-related), growth likely hinges on price pass-through, product mix upgrades, and overseas expansion rather than volume alone. profit_quality: Net income grew 3.3% YoY despite weaker operating profit, indicating some support from non-operating items and a normalized tax burden. Interest expense is low (¥63m), reducing financial drag. However, absent cash flow disclosure, we cannot validate cash conversion or working capital drag. outlook: Key to re-accelerating profit growth will be sustaining pricing to offset input costs, tightening SG&A control, and improving utilization/throughput. Macro factors (foodservice recovery, overseas demand, FX) and commodity trends will shape 2H performance.

Financial Health

liquidity: Current assets ¥65.699bn vs current liabilities ¥21.129bn yield a current ratio of 310.9% and quick ratio of 270.3%, with working capital of ¥44.57bn. Liquidity is ample for operating needs and contingencies. solvency: Total liabilities ¥33.799bn against total equity ¥80.671bn indicate a conservative balance sheet; implied equity-to-asset ratio is ~71.5% (80.671/112.806), and financial leverage is 1.40x. Interest coverage of ~65x reflects very low solvency risk. capital_structure: Debt-to-equity is 0.42x, suggesting capacity to absorb shocks or fund selective investments. Minor discrepancies between Assets−Liabilities and reported Equity likely reflect rounding/classification; leverage indicators remain consistent with low gearing.

Cash Flow Quality

earnings_quality: Tax expense of ¥1.25bn against ordinary income of ¥4.368bn implies an effective tax rate in the high-20% range, consistent with normal operations. Low interest expense supports clean earnings quality. However, without OCF/FCF disclosure, accruals and cash conversion cannot be evaluated. FCF_analysis: Operating CF and Investing CF are not disclosed in this dataset (zeros indicate unreported), so FCF cannot be derived. Capex intensity and maintenance vs growth spend remain unknown for the period. working_capital: Current assets ¥65.699bn include inventories of ¥8.587bn. With flat revenue, careful inventory and receivables management will be important to protect cash conversion in 2H; detailed DSO/DIO/DPO metrics are not available.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are not disclosed in the provided data. With net income of ¥3.361bn and a solid balance sheet, capacity exists in principle, but policy and actual distributions cannot be inferred here. FCF_coverage: FCF data are not reported; thus, dividend coverage by free cash flow cannot be assessed from this filing. policy_outlook: Given conservative leverage and strong liquidity, a sustainable dividend policy is plausible, but confirmation requires management guidance and actual DPS data from full disclosures.

Risk Assessment

Business Risks:

• Raw material price volatility (e.g., seaweed, edible oils, seasonings inputs) impacting gross margin
• FX fluctuations affecting overseas revenues, input costs, and translation effects
• Customer pricing pressure and time lag in cost pass-through
• Demand variability in foodservice and processed foods channels
• Supply chain/logistics cost normalization risk and freight volatility
• Product mix shifts that could dilute margins

Financial Risks:

• Potential working capital build weighing on cash conversion (OCF not disclosed)
• Exposure to commodity and FX hedging effectiveness
• Interest rate risk is low but not zero; rising rates could modestly lift financing costs
• Asset revaluation or impairment risks not discernible without D&A/capex detail

Key Concerns:

• Negative operating leverage in the half amid flat sales
• Lack of OCF/FCF disclosure limits assessment of earnings-to-cash conversion
• Visibility on dividend policy limited due to unreported DPS/payout
• Need for continued price/mix gains to offset cost inflation into 2H

Investment Implications

Key Takeaways:

• Stable revenue (+0.2% YoY) but operating income down 11.6% indicates cost pressure and negative operating leverage
• Net income resilience (+3.3% YoY) aided by low interest burden and a normal tax rate
• Gross margin at 33.3% and operating margin ~8.7% remain decent but compressed YoY
• ROE at 4.17% reflects modest profitability with conservative leverage (1.40x)
• Balance sheet strength: equity ratio implied ~71.5%, current ratio 311%, interest coverage ~65x
• Cash flow and dividend details not disclosed, limiting full-quality and payout assessment

Metrics to Watch:

• Gross and operating margin trajectory and SG&A ratio in 2H
• Price pass-through vs raw material and logistics cost indices
• Operating cash flow, inventory levels, and working capital turns
• FX impacts on revenue and ordinary income
• Capex and D&A trends to gauge maintenance vs growth investment
• ROE components: asset turnover improvement and leverage discipline

Relative Positioning: Within Japanese food ingredients/seasonings peers, Riken Vitamin exhibits a conservative balance sheet and healthy liquidity, with recent operating margin compression versus largely stable top-line; near-term positioning hinges on cost normalization and pricing execution.

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