SAKATA INX CORPORATION FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥192.04B
• Operating Income: ¥11.90B
• Net Income: ¥9.33B
• EPS: ¥197.92

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

Sakata Inx (46330) delivered steady top-line and improved bottom-line performance in FY2025 Q3 (cumulative), with revenue up 5.3% YoY to ¥192.0bn and operating income up 8.8% YoY to ¥11.9bn. Net income rose 17.1% YoY to ¥9.78bn, indicating margin expansion and/or favorable non-operating factors (e.g., FX gains, investment income) alongside moderate operating leverage. Gross margin was 23.0% and operating margin 6.2%, reflecting improved profitability compared with revenue growth. Ordinary income exceeded operating income by ¥1.21bn, suggesting net non-operating gains more than offset the ¥0.51bn interest expense. The effective tax burden implied by reported tax expense and net income is approximately 21–22%, consistent with a normalized rate for a Japan-headquartered multinational. DuPont shows net margin of 5.09%, asset turnover of 0.89x, and financial leverage of 1.82x, yielding an ROE of 8.24%, broadly healthy for a mature chemicals/ink manufacturer. Balance sheet quality appears solid: total assets are ¥215.8bn against total equity of ¥118.8bn and total liabilities of ¥102.2bn, implying an equity ratio around 55% (even though the tabular “Equity Ratio” shows 0.0% due to non-disclosure). Liquidity is strong with a current ratio of 185% and a quick ratio of 156%, underpinned by working capital of ¥56.5bn. Interest coverage of 23.2x points to low financial risk and ample cushion against rate or earnings volatility. Inventories are ¥19.3bn, relatively modest at ~16% of current assets, which helps working capital flexibility. Cash flow figures are not disclosed in this dataset (zeros indicate unreported), so operating cash conversion and free cash flow coverage cannot be assessed here. Depreciation and EBITDA are also not disclosed, limiting analysis of capital intensity and non-cash earnings components. Dividend data are similarly not provided in this extract; therefore, payout and FCF coverage cannot be concluded from the supplied numbers. Strategically, the mix shift toward packaging inks and price optimization in response to raw material inflation likely supported margins despite a structurally challenged publication market. Overall, the company exhibits disciplined cost control and low balance sheet risk, with improving earnings quality visible through the widening spread between revenue and net income growth. Near-term performance will hinge on raw material costs (resins, solvents, pigments), FX, and demand trends in packaging and industrial inks across Asia and the Americas.

Profitability Analysis

roe_decomposition:

• net_profit_margin: 5.09%
• asset_turnover: 0.89x
• financial_leverage: 1.82x
• calculated_roe: 8.24%
• commentary: ROE is driven primarily by respectable asset turnover and moderate leverage, with a modest but improving net margin. Ordinary income exceeding operating income implies positive non-operating contributions supporting bottom line. margin_quality:
• gross_margin: 23.0%
• operating_margin: 6.2%
• ordinary_margin: 6.8%
• net_margin: 5.1%
• sg_and_a_ratio: 16.8%
• tax_rate_implied: ≈21.6% (2,690 / (9,780 + 2,690))
• notes: Margin expansion outpaced revenue growth, indicating either pricing power, easing input costs, or mix improvement (e.g., packaging inks). Implied tax rate appears normalized despite the 0.0% figure shown in the summary metrics table. operating_leverage: With gross margin at 23.0% and SG&A at 16.8% of sales, incremental revenue can translate into improved operating margins; the 8.8% YoY gain in operating income vs. 5.3% revenue growth suggests positive, but not extreme, operating leverage.

Growth Assessment

revenue_sustainability: Revenue grew 5.3% YoY to ¥192.0bn, consistent with steady end-market demand in packaging and selective price maintenance. Publication print remains structurally weak but packaging and industrial applications provide resilience. profit_quality: Net income growth (+17.1% YoY) outpaced operating income growth, aided by non-operating gains and a normalized tax rate. Interest expense remains modest (¥513m), and ordinary income of ¥13.1bn indicates diversified earnings drivers. outlook: Sustainability depends on raw material cost trajectories (petrochemical derivatives), FX (yen level affecting overseas sales translation and input costs), and geographic demand, particularly in Asia. If input cost pressures remain contained and price discipline holds, margins can remain near current levels.

Financial Health

liquidity:

• current_ratio: 185.3%
• quick_ratio: 156.2%
• working_capital: ¥56.5bn
• commentary: Ample short-term liquidity with solid buffers; inventories of ¥19.3bn represent ~16% of current assets, supporting flexibility. solvency:
• total_assets: ¥215.8bn
• total_liabilities: ¥102.2bn
• total_equity: ¥118.8bn
• equity_ratio_implied: ≈55.0% (118.8 / 215.8)
• debt_to_equity: 0.86x (liabilities/equity)
• interest_coverage: 23.2x
• commentary: Low leverage and robust coverage indicate conservative capital structure and limited refinancing risk. capital_structure: Balanced with moderate leverage; positive non-operating income suggests additional financial flexibility. Cash balance not disclosed in this dataset, so net debt cannot be assessed here.

Cash Flow Quality

earnings_quality: Net income is supported by operating profit expansion and positive non-operating factors; however, absence of disclosed depreciation and cash flow data limits assessment of non-cash items and accruals. fcf_analysis: Operating and investing cash flows are not disclosed (reported as zeros in this extract), so free cash flow cannot be evaluated. Historically, the business tends to be cash generative, but this cannot be confirmed from the provided data. working_capital: Working capital of ¥56.5bn and quick ratio of 156% imply healthy liquidity. Receivables and payables details are not provided; inventory level appears reasonable at ¥19.3bn relative to current assets.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout data are not disclosed in this dataset (zeros are placeholders), preventing a direct payout ratio assessment versus EPS of ¥197.92. fcf_coverage: Not assessable due to undisclosed operating and investing cash flows in the provided data. policy_outlook: Given stable profitability, low leverage, and historically conservative financial policies in the sector, dividend capacity appears supported in principle, but confirmation requires actual DPS and cash flow disclosures.

Risk Assessment

Business Risks:

• Raw material price volatility (resins, solvents, pigments linked to crude oil and naphtha).
• Structural decline in publication printing volumes offset only partially by packaging and industrial inks.
• Foreign exchange fluctuations impacting translation of overseas earnings and input costs.
• Competitive pricing pressure from global and regional ink manufacturers.
• Regulatory and environmental compliance costs (VOC, sustainability requirements).
• Demand cyclicality in end markets (consumer goods, electronics, automotive packaging).

Financial Risks:

• Potential working capital swings (receivables/inventories) in a global distribution footprint.
• FX translation and transaction impacts on non-operating income.
• Interest rate increases marginally affecting interest expense (though coverage is strong).
• Undisclosed cash flow data in this extract limits visibility on cash conversion and capex intensity.

Key Concerns:

• Sustainability of non-operating income that boosted ordinary income over operating income.
• Input cost normalization may reverse if crude-linked feedstocks re-inflate.
• Visibility on cash generation and capex is limited without OCF/FCF disclosure.

Investment Implications

Key Takeaways:

• Top-line grew 5.3% YoY with operating income up 8.8%, indicating modest operating leverage.
• ROE at 8.24% is supported by 0.89x asset turnover and 1.82x leverage; room remains via margin improvements.
• Strong liquidity (current ratio 185%, quick ratio 156%) and conservative solvency (implied equity ratio ~55%).
• Interest coverage at 23.2x signals low financial risk.
• Non-operating gains supported ordinary income; sustainability should be monitored.
• Cash flow and dividend figures are not disclosed in this dataset, constraining FCF and payout analysis.

Metrics to Watch:

• Gross and operating margin trajectory (price/mix vs. input costs).
• Raw material cost indices (crude oil derivatives, pigments) and purchasing contracts.
• FX rates (USD/JPY, EUR/JPY, emerging Asia currencies) and their P/L sensitivity.
• Working capital efficiency (inventory days, receivable days) and OCF/NI once disclosed.
• Capex and depreciation trends to gauge capital intensity and maintenance needs.
• Ordinary vs. operating income gap (scale and drivers of non-operating gains).
• Dividend per share and payout ratio when disclosed.

Relative Positioning: Within Japan-listed ink and broader specialty chemicals peers, Sakata Inx appears smaller than mega-cap peers but maintains a conservative balance sheet, mid-to-high single-digit ROE, and exposure skewed to packaging and overseas markets, which can provide resilience versus structurally declining publication demand.

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