OAT Agrio Co.,Ltd. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥23.61B
• Operating Income: ¥3.04B
• Net Income: ¥1.80B
• EPS: ¥192.14

Income Statement

Balance Sheet

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

OAT Agrio (4979) delivered solid FY2025 Q3 year-to-date results with revenue of ¥23.605bn, up 6.4% YoY, and operating income of ¥3.039bn, up 13.4% YoY, indicating positive operating leverage. Net income rose 14.5% YoY to ¥1.942bn, with EPS at ¥192.14, supported by strong gross margins and disciplined costs. Gross profit margin stands at 45.9%, reflecting healthy pricing and product mix in agrochemicals and related solutions. Operating margin improved to 12.9%, outpacing topline growth and signaling efficiency gains in SG&A or favorable mix. Ordinary income of ¥3.008bn is broadly aligned with operating income, suggesting limited non-operating drag aside from interest expense. Using provided DuPont components, ROE is 10.5%, decomposed into an 8.23% net margin, 0.656x asset turnover, and 1.95x financial leverage. The balance sheet shows total assets of ¥35.971bn and equity of ¥18.493bn, implying an equity ratio of ~51.4% (versus a reported 0% placeholder), which indicates a moderate, balanced capital structure. Liquidity appears healthy with a current ratio of 1.53x and quick ratio of 1.32x, supported by ¥7.136bn in working capital. Interest coverage is robust at 22.7x (operating income/interest expense), providing cushion against rate and credit cost increases. The effective tax burden inferred from income tax expense (¥786m) and net income suggests an implied effective tax rate of ~28.8%, in line with Japan’s statutory range. Inventory of ¥2.761bn represents roughly 13% of current assets, manageable for a seasonal, working-capital-intensive business. Cash flow statements, depreciation, and dividend details were not disclosed in this dataset (zeros represent non-disclosure, not actual zero), which limits free cash flow and payout assessment. Despite this limitation, profitability and solvency indicators are strong enough to support continued investment in growth and resilience. The company’s ROE at 10.5% is respectable for the sector, driven more by margins than asset turnover, suggesting scope to improve capital efficiency. Overall, the quarterly trajectory is favorable, but confirmation via operating cash conversion, capex discipline, and inventory turnover will be important for sustaining returns.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 8.23% (NI ¥1.942bn / Revenue ¥23.605bn)
• asset_turnover: 0.656x (Revenue ¥23.605bn / Assets ¥35.971bn)
• financial_leverage: 1.95x (Assets ¥35.971bn / Equity ¥18.493bn)
• calculated_ROE: 10.5% (matches provided DuPont result) margin_quality:
• gross_margin: 45.9% (¥10.845bn/¥23.605bn) driven by favorable mix/pricing
• operating_margin: 12.9% (¥3.039bn/¥23.605bn), improved YoY with cost discipline
• ordinary_margin: 12.7% (¥3.008bn/¥23.605bn), limited non-operating drag
• net_margin: 8.23% reflecting standard tax burden and interest costs
• tax_rate_inferred: ~28.8% (¥786m tax / ~¥2.728bn pre-tax) operating_leverage: Operating income grew 13.4% YoY vs. revenue +6.4% YoY, implying positive operating leverage from scale benefits and/or mix; interest coverage 22.7x indicates profits comfortably service financing costs.

Growth Assessment

revenue_sustainability: Topline +6.4% YoY is steady for agrochemicals, likely supported by product mix and pricing; sustainability will depend on planting conditions, distribution pull-through, and FX sensitivity (not disclosed). profit_quality: Margin expansion and ordinary income closely tracking operating income point to core-business-driven growth; limited reliance on non-operating items. outlook: With a 12.9% operating margin and 10.5% ROE, the trajectory is constructive; key to sustaining growth will be maintaining gross margin, managing SG&A, and improving asset turnover through inventory and receivables efficiency. Lack of cash flow disclosure warrants monitoring to confirm earnings translate into cash.

Financial Health

liquidity:

• current_ratio: 1.53x (¥20.669bn / ¥13.533bn)
• quick_ratio: 1.32x ((¥20.669bn-¥2.761bn)/¥13.533bn)
• working_capital: ¥7.136bn, adequate buffer for seasonal needs solvency:
• equity_ratio_computed: 51.4% (¥18.493bn/¥35.971bn); reported 0% reflects non-disclosure placeholder
• debt_to_equity: 0.95x (Total liabilities ¥17.559bn / Equity ¥18.493bn; proxy for leverage given no debt split)
• interest_coverage: 22.7x (¥3.039bn OI / ¥134m interest) capital_structure: Balanced mix of liabilities and equity with moderate leverage; capacity to absorb volatility appears sound given strong coverage and liquidity.

Cash Flow Quality

earnings_quality: Earnings appear operations-driven (ordinary≈operating); however, lack of OCF and D&A disclosure prevents assessment of non-cash components and accrual intensity. FCF_analysis: OCF and capex not disclosed; FCF cannot be derived. Given working-capital-intensive nature of agrochemicals, seasonal OCF swings are expected—confirmation needed post year-end. working_capital: Inventories ¥2.761bn (~13% of current assets) appear manageable; monitoring receivables and inventory turnover will be key to safeguarding cash conversion.

Dividend Sustainability

payout_ratio_assessment: EPS ¥192.14 is disclosed; DPS is not disclosed (reported ¥0 is a placeholder). Therefore, payout ratio cannot be reliably assessed from this dataset. FCF_coverage: Not assessable due to absent OCF/FCF data; coverage ratio shown as 0.00x is a non-disclosure artifact. policy_outlook: With ROE at 10.5% and moderate leverage, the balance sheet could support dividends; actual policy and sustainability require confirmed OCF and capex trends from full-year filings.

Risk Assessment

Business Risks:

• Seasonality and weather dependence affecting agrochemical demand and application timing
• Raw material price volatility impacting gross margins
• Regulatory changes in pesticide approvals and environmental standards
• Competitive pricing pressures from domestic and global peers
• FX fluctuations impacting import costs and export competitiveness
• Product mix risk between higher-margin specialty products and commoditized lines

Financial Risks:

• Working capital intensity and potential for receivable/inventory build to pressure OCF
• Moderate leverage (liabilities/equity ~0.95x) amplifies downside if earnings soften
• Interest rate risk on variable-rate borrowings (debt composition not disclosed)
• Cash flow visibility limited due to non-disclosure of OCF and capex
• Potential tax rate variability (implied ~28.8%) affecting net profitability

Key Concerns:

• Absence of cash flow statement and D&A details restricts assessment of earnings-to-cash conversion
• Dependence on favorable pricing/mix to sustain elevated gross margin (45.9%)
• Asset turnover at 0.656x suggests room to enhance capital efficiency

Investment Implications

Key Takeaways:

• Revenue +6.4% YoY and operating income +13.4% YoY indicate healthy operating leverage
• Strong gross margin of 45.9% underpins profitability; operating margin 12.9%
• ROE 10.5% driven by margins and moderate leverage (1.95x), with asset turnover at 0.656x
• Liquidity is sound (current ratio 1.53x; quick ratio 1.32x) and interest coverage 22.7x
• Key missing disclosures (OCF, capex, DPS, D&A) limit cash flow and payout analysis

Metrics to Watch:

• Operating cash flow and free cash flow at FY-end
• Inventory and receivables turnover (days on hand, DSO)
• Gross and operating margin trajectory versus input cost trends
• Leverage and interest coverage as rates evolve
• Capex intensity and new product/mix contributions
• Effective tax rate versus statutory benchmarks
• Overseas sales/FX exposure (if disclosed in full-year report)

Relative Positioning: Within Japan’s agrochemical and crop-solution peers, OAT Agrio’s 12.9% operating margin and 10.5% ROE are competitive, supported by strong gross margins and moderate leverage; capital efficiency (asset turnover 0.656x) presents an avenue for further improvement.

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
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