| Metric | Current Period | Prior-year Period | YoY |
|---|---|---|---|
| Revenue | ¥113.6B | ¥109.1B | +4.1% |
| Operating Income | ¥13.4B | ¥13.8B | -3.1% |
| Ordinary Income | ¥16.3B | ¥15.8B | +3.3% |
| Net Income | ¥11.5B | ¥11.0B | +4.2% |
| ROE | 5.2% | 5.2% | - |
Yasuhara Chemical’s FY2026 Q3 results were: Revenue ¥113.6B (YoY +¥4.5B +4.1%), Operating Income ¥13.4B (YoY -¥0.4B -3.1%), Ordinary Income ¥16.3B (YoY +¥0.5B +3.3%), and Net Income ¥11.5B (YoY +¥0.5B +4.2%). While revenue increased, higher SG&A led to a decline in operating profit; however, ordinary and net income rose due to non-operating income that included ¥2.5B in foreign exchange gains.
[Profitability] ROE 5.2% (flat YoY), Operating Margin 11.8%, Net Margin 10.1%, Gross Margin 28.0%. Of the ¥3.6B in non-operating income, ¥2.5B in foreign exchange gains lifted ordinary income, resulting in an Ordinary Income Margin of 14.3%. [Cash Quality] Cash and deposits ¥32.2B (down -46.5% from ¥60.2B a year ago), cash coverage of short-term liabilities 1.89x. Interest coverage 133.7x. [Investment Efficiency] Total Asset Turnover 0.44x, ROIC 4.3%. [Financial Soundness] Equity Ratio 86.4%, Current Ratio 1286.8%, Interest-bearing Debt ¥27.0B (Debt/Capital ratio 10.8%), Short-term Liabilities Ratio 63.0%. Working capital of ¥164.6B is tying up funds, with inventories in raw materials ¥57.1B, work-in-process ¥25.7B, and finished goods ¥28.4B.
Cash and deposits decreased by -¥28.0B YoY to ¥32.2B, narrowing the liquidity buffer. Long-term borrowings declined from ¥18.5B to ¥10.0B, a decrease of -¥8.5B (-45.9%), suggesting repayment or refinancing into shorter tenors. Accounts payable increased from ¥4.7B to ¥6.4B (+¥1.8B, +37.4%), indicating utilization of supplier credit via extended payment terms. Against short-term borrowings of ¥17.0B, cash coverage remains at 1.89x, but the sharp drop in cash and concentration of short-term debt have reduced funding flexibility versus the prior year. Working capital of ¥164.6B equals 145% of revenue, with ongoing cash tied up in inventories.
Against Ordinary Income of ¥16.3B, Operating Income was ¥13.4B, implying a net non-operating increase of approximately ¥2.9B. The breakdown shows ¥2.5B in foreign exchange gains as the largest component, with ¥0.4B in interest income and ¥0.1B in dividend income also contributing. Non-operating income of ¥3.6B accounts for 3.2% of revenue, indicating some earnings sensitivity to exchange rate movements. Although operating income declined, ordinary income increased due to foreign exchange gains; in core operations, while gross margin was maintained, SG&A rose from ¥14.8B to ¥18.4B (+24.2%), pressuring operating leverage. Operating Cash Flow was not disclosed, preventing assessment of earnings cash conversion, but the sharp decline in cash warrants attention to the balance with cash generation.
Short-term debt concentration risk: With a Short-term Liabilities Ratio of 63.0% and short-term borrowings of ¥17.0B as the core funding source, combined with a -46.5% YoY decrease in cash, refinancing risk is elevated. Working capital lock-up risk: Working capital of ¥164.6B (145% of revenue) ties up funds; declining inventory turnover and rising slow-moving inventory could pressure cash flow. Foreign exchange risk: Foreign exchange gains of ¥2.5B account for 15.4% of ordinary income; if exchange rates reverse, non-operating income may decline and the increase in ordinary income could reverse.
[Position within industry] (Reference information; our research) Profitability: Net Margin 10.1% significantly exceeds the industry median of 5.4%, and Operating Margin 11.8% also surpasses the industry median of 7.3%. ROE 5.2% slightly exceeds the industry median of 4.9%, and Return on Assets 4.5% is above the industry median of 3.3%. Soundness: Equity Ratio 86.4% is far above the industry median of 63.9%, indicating a highly conservative capital structure. Current Ratio 12.9x is well above the industry median of 2.67x, driven by the size of working capital. Efficiency: Revenue growth of 4.1% exceeds the industry median of 2.8%. The Net Debt/EBITDA multiple is in a net cash position, and compared with the industry median of -1.11, financial soundness is favorable. (Industry: Manufacturing; comparison set: 2025 Q3; N=65 companies; Source: Our aggregation)
Dependence on non-operating income: Despite a -3.1% YoY decline in operating income, ¥2.5B in foreign exchange gains drove increases in ordinary and net income, underscoring the need to strengthen core operating profitability. SG&A growth of +24.2% far outpaced revenue growth of +4.1%; cost control is key to improving operating margin. Reliance on short-term debt and declining cash: With a Short-term Liabilities Ratio of 63.0% and cash down -46.5% YoY, extending debt maturities or improving Operating Cash Flow will be necessary to enhance funding stability.
This report is an automatically generated earnings analysis created by AI based on XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. The industry benchmark is reference information compiled by our firm based on publicly available financial reports. Investment decisions are your own responsibility; consult a professional as necessary before investing.