FUJI MEDIA HOLDINGS,INC. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥248.70B
• Operating Income: ¥-12.99B
• Net Income: ¥12.73B
• EPS: ¥82.48

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

Fuji Media Holdings reported FY2026 Q2 consolidated results under JGAAP showing mixed quality: operational weakness but headline profitability buoyed by non-operating/extraordinary items. Revenue declined 7.2% YoY to ¥248.7bn, reflecting softness likely in broadcasting/advertising and possibly weaker content or events-related revenues. Gross profit of ¥74.2bn implies a healthy gross margin of 29.9%, but operating income was a loss of ¥13.0bn, albeit a 6.6% YoY improvement in the loss. Ordinary income was also negative at ¥10.9bn, signaling that recurring profit drivers remain under pressure. Despite this, net income came in at ¥17.1bn (+35.8% YoY), indicating the presence of sizable extraordinary gains and/or tax effects that more than offset recurring losses. The calculated ROE is 2.10%, derived from a 6.88% net margin, 0.173x asset turnover, and 1.77x financial leverage; this is low in absolute terms and largely non-recurring in quality given operating and ordinary losses. EBITDA was negative at ¥3.24bn, underscoring weak core earnings and elevated SG&A or content amortization pressures. Cash generation, however, was resilient: operating cash flow was ¥18.5bn, exceeding net income (OCF/NI of 1.08x), with non-cash D&A of ¥9.7bn helping bridge the operating loss and indicating working capital release. Liquidity is strong with a current ratio of 213.2%, quick ratio of 168.9%, and working capital of ¥211.7bn, providing a sizable buffer for cyclical downturns. Leverage looks moderate with a debt-to-equity ratio of 0.75x and balance-sheet leverage (assets/equity) of 1.77x, consistent with the DuPont leverage factor. Asset turnover at 0.173x reflects the asset-intensive nature of a media holdings structure (including investments and real estate), implying low structural efficiency and dependence on non-operating income for reported returns. Interest coverage is negative (-10.7x) due to operating losses, highlighting pressure on recurring interest-paying capacity despite manageable nominal interest expense (¥1.2bn). Reported effective tax rate appears distorted (0.0% per calculated metric), not unusual under JGAAP in periods of losses and extraordinary gains; taxes paid were ¥4.7bn. Several items are undisclosed in XBRL (e.g., equity ratio, investing CF, cash/cash equivalents, dividends, per-share data), limiting per-share and capital allocation analysis. Overall, while cash flow and liquidity are supportive, the quality of earnings is mixed, with net profit driven by non-recurring items and core operations still in loss, warranting close monitoring of revenue recovery, cost discipline, and the recurrence (or not) of one-off gains.

Profitability Analysis

ROE decomposition points to low-quality returns: net margin of 6.88% (inflated by extraordinary items) × asset turnover of 0.173 × financial leverage of 1.77 = ROE of 2.10% (matches reported). Gross margin at 29.9% is decent for broadcasting/content, but operating margin is deeply negative at -5.2% (operating loss ¥13.0bn on ¥248.7bn revenue), pointing to SG&A/content cost pressure and weak operating leverage at current volumes. EBITDA margin is -1.3%, indicating limited coverage of fixed costs and content amortization by gross profit. Ordinary loss (¥10.9bn) confirms that recurring profit drivers (broadcasting, content, real estate, affiliates) did not offset fixed costs. The positive net income implies material extraordinary gains and/or valuation allowance movements, which are not repeatable at the same cadence. Operating leverage is unfavorable: a 7.2% revenue decline coincides with operating losses despite a sizeable gross profit pool, suggesting fixed cost rigidity in programming/content, personnel, and infrastructure. Interest expense is modest at ¥1.2bn, but negative EBIT yields interest coverage of -10.7x, underscoring vulnerability if operating weakness persists. Overall profitability quality is weak on a recurring basis; returns rely on non-operating/extraordinary items given negative operating and ordinary results.

Growth Assessment

Top-line declined 7.2% YoY to ¥248.7bn, indicative of ad market softness and possibly lower event/concert and content distribution revenues. Operating loss narrowed 6.6% YoY, suggesting cost actions are underway but not yet sufficient to restore profitability at the operating level. Net income growth (+35.8% YoY) is not reflective of underlying momentum given the negative ordinary income; the growth is driven by one-off/non-operating factors. Asset turnover at 0.173x is low and likely stable without portfolio reshaping, limiting growth in ROE absent margin recovery. The sustainability of revenue appears fragile near term, hinging on advertising recovery, program ratings/content slate performance, and monetization of digital/streaming platforms. Profit quality is mixed: OCF is positive and slightly exceeds net income, but EBITDA and operating profit are negative, implying that working capital and non-cash add-backs (D&A) currently support cash flows. Near-term outlook depends on cost restructuring, content spend optimization, and the cadence of extraordinary gains (e.g., asset sales or investment security gains), none of which should be assumed recurring. We therefore view revenue and profit trends as in transition with execution risk on restoring recurring profitability.

Financial Health

Liquidity is strong with current assets of ¥398.6bn versus current liabilities of ¥186.9bn, yielding a current ratio of 213.2% and quick ratio of 168.9%. Working capital stands at ¥211.7bn, affording flexibility to absorb operating volatility and content cycle needs. Total assets are ¥1,441.5bn against total liabilities of ¥610.3bn and equity of ¥815.6bn, giving balance-sheet leverage of 1.77x assets/equity and a debt-to-equity ratio of 0.75x (moderate). The reported equity ratio is undisclosed in XBRL (0.0% placeholder) and should not be interpreted as zero; by balance sheet totals, book equity appears robust. Interest expense is manageable at ¥1.2bn; however, with negative EBIT, recurring coverage is strained. The capital structure appears conservative for a media conglomerate, with ample asset backing and liquidity to support ongoing operations and potential restructuring.

Cash Flow Quality

Operating cash flow of ¥18.5bn exceeds net income of ¥17.1bn (OCF/NI 1.08x), suggesting acceptable earnings-to-cash conversion for the period, aided by ¥9.7bn of D&A and likely working capital release. EBITDA is negative, so OCF strength likely reflects timing/working capital dynamics rather than core profitability improvements; sustainability should be monitored. Investing cash flow is undisclosed (0 reported indicates not available), so free cash flow cannot be robustly assessed; the calculated FCF of 0 is a placeholder and not decision-useful. Financing cash flow was an inflow of ¥12.7bn, implying net borrowing or other financing sources; detailed components are not disclosed here. Cash and equivalents are undisclosed in this dataset (reported as 0). Overall, cash flow quality is mixed: conversion of reported earnings is fine this quarter, but underlying operating losses and negative EBITDA temper confidence in repeatability absent working capital tailwinds.

Dividend Sustainability

Dividend data (DPS, payout ratio, FCF coverage) is not disclosed in this dataset; the 0.00 values are placeholders, and per-share data such as outstanding shares and BVPS are also undisclosed. Historically, the company has maintained dividends, but we cannot assess current payout or coverage from the provided inputs. From a capacity perspective, liquidity is ample and leverage moderate, but recurring earnings are currently weak (operating and ordinary losses). Sustainable dividends depend on restoring positive ordinary income and generating consistent free cash flow; without investing cash flow and capex detail, FCF coverage cannot be evaluated. Policy outlook cannot be inferred from the provided data and should be checked against management guidance and historical policy.

Risk Assessment

Business Risks:

• Advertising market softness impacting core broadcasting revenues
• High fixed cost base in programming/content leading to negative operating leverage
• Competition from digital/streaming platforms eroding audience share and CPMs
• Content performance volatility and rights cost inflation
• Event and live business cyclicality (if applicable) and potential cancellations
• Dependence on non-operating/extraordinary gains to achieve net profit
• Regulatory and licensing risks in broadcasting and media ownership
• Portfolio/affiliate performance variability (equity-method and investment securities)
• Potential impairment risk on content libraries, goodwill, or long-lived assets

Financial Risks:

• Negative interest coverage due to operating losses
• Earnings quality reliance on extraordinary gains and tax effects
• Working capital timing effects masking underlying cash burn
• Possible mark-to-market volatility on investment securities affecting below-ordinary line
• Limited asset turnover constraining ROE without margin recovery
• Uncertain capex/investing outflows (investing CF not disclosed) affecting FCF

Key Concerns:

• Operating and ordinary losses despite positive net income
• Negative EBITDA indicating weak core profitability
• Revenue decline of 7.2% YoY highlighting demand/market pressures
• Reliance on liquidity and balance sheet rather than recurring earnings for resilience
• Insufficient disclosure in this dataset on investing cash flows and dividend policy

Investment Implications

Key Takeaways:

• Core profitability remains under pressure with operating loss of ¥13.0bn and EBITDA margin of -1.3%
• Net income of ¥17.1bn and ROE of 2.10% are supported by non-operating/extraordinary items, not recurring earnings
• Cash generation is acceptable this quarter (OCF/NI 1.08x), aided by D&A and likely working capital release
• Balance sheet strength (current ratio 213%, D/E 0.75x) provides a cushion while restructuring progresses
• Revenue headwinds (-7.2% YoY) and negative operating leverage are key issues to address

Metrics to Watch:

• Advertising revenues and unit prices (spot/time sales) and audience ratings
• SG&A and content/programming cost trajectory; progress on fixed cost reduction
• Ordinary income recovery and interest coverage returning to positive territory
• Operating cash flow sustainability and working capital movements
• Investing cash flow/capex and proceeds from asset sales; true free cash flow
• Extraordinary gains/losses cadence and reliance on non-recurring items
• Equity ratio (true value) and net cash/debt position when disclosed
• Digital/streaming monetization KPIs and affiliate contributions

Relative Positioning: Within Japanese broadcasting/media peers, Fuji Media exhibits stronger liquidity and asset backing but weaker recurring profitability this period, with ROE lagging due to low asset turnover and negative operating results; recovery depends on ad market conditions and cost discipline relative to peers pursuing digital transition.

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