| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥751.0B | ¥748.5B | +0.3% |
| Operating Income | ¥64.8B | ¥79.0B | -17.9% |
| Ordinary Income | ¥89.7B | ¥61.0B | +47.0% |
| Net Income | ¥84.0B | ¥51.1B | +64.3% |
| ROE | 1.7% | 1.0% | - |
Q1 results for the fiscal year ended March 2025: Revenue ¥751.0B (YoY +¥2.5B +0.3%), Operating Income ¥64.8B (YoY -¥14.2B -17.9%), Ordinary Income ¥89.7B (YoY +¥28.7B +47.0%), Net Income ¥84.0B (YoY +¥32.9B +64.3%). At the operating stage, gross margin declined to 24.3% (prior 24.9%) down 0.6pt, SG&A ratio rose to 15.6% (prior 14.3%) up 1.3pt, compressing operating margin to 8.6% (prior 10.6%) down 2.0pt. Conversely, improvements in non-operating results (recorded foreign exchange gains of ¥16.5B, etc.) and extraordinary gains of ¥47.3B (primarily ¥36.3B gain on sale of investment securities) drove final profit increase.
[Revenue] Revenue ¥751.0B (YoY +0.3%) remained essentially flat. As the Glass Business is a single segment, regional/product breakdowns are undisclosed, but the muted increase suggests stagnating demand and pricing competition. Gross margin at 24.3% declined 0.6pt from 24.9% the prior year, indicating delayed pass-through of rising raw material and energy costs. Cost of sales ¥568.8B (prior ¥562.3B) rose +1.2%, outpacing revenue growth, highlighting cost management challenges.
[Profitability] SG&A ¥117.4B (prior ¥107.2B) increased +9.5%, markedly outpacing revenue growth, pushing SG&A ratio to 15.6% (prior 14.3%) up 1.3pt. Rising personnel and logistics costs reduced operating leverage. As a result, Operating Income ¥64.8B (-17.9%), operating margin 8.6% (-2.0pt) — operating-stage earnings declined. In non-operating items, foreign exchange gains of ¥16.5B and increased dividend income ¥4.7B drove non-operating income to ¥33.0B (prior ¥18.6B), a substantial increase; non-operating expenses ¥8.1B (prior ¥36.6B) decreased as interest expense was ¥3.1B and foreign exchange losses were not recorded, leading to Ordinary Income ¥89.7B (+47.0%). Extraordinary gains ¥47.3B (including ¥36.3B gain on sale of investment securities) were added, yielding profit before tax ¥124.2B and Net Income ¥84.0B (after corporate taxes of ¥40.3B) (+64.3%). However, the Net Income increase was largely driven by one-off items (gain on sale of investment securities, etc.), and core operating profitability was below the prior year. In conclusion: revenue up but operating profit down; revenue and ordinary/net income up.
[Profitability] Operating margin 8.6% down 2.0pt from 10.6% last year; gross margin 24.3% (prior 24.9%) down 0.6pt; SG&A ratio 15.6% (prior 14.3%) up 1.3pt, indicating issues in cost control and operating leverage. Net margin 11.2% (prior 6.8%) improved due to one-off gains, but sustainability is limited. ROE 1.7% (annualized) reflects higher net income but capital efficiency remains low. [Cash Quality] Cash and deposits ¥1,058.3B, current ratio 252.8%, quick ratio 205.4% — liquidity is very high. [Investment Efficiency] Total assets ¥6,922.2B vs. quarterly Revenue ¥751.0B (annualized ¥3,004B) yields total asset turnover of 0.43x/year, indicating low asset efficiency. [Financial Soundness] Equity Ratio 71.9% (prior 70.2%) improved 1.7pt; interest-bearing debt ¥773.8B (short-term borrowings ¥236.6B, long-term borrowings ¥537.2B) yields Debt/Capital ratio 13.5%, a conservative capital structure. Interest coverage (based on operating income) is high at 21.0x, indicating strong serviceability.
Cash flow statement data is undisclosed, but balance sheet movements indicate cash trends: Cash and deposits decreased ¥148.8B to ¥1,058.3B (prior ¥1,207.1B). Accounts payable ¥359.9B (prior ¥389.7B) decreased ¥29.9B, and accrued corporate taxes ¥3.7B (prior ¥81.5B) decreased ¥77.8B, suggesting cash outflows for trade payables settlement and tax payments. Property, plant and equipment ¥3,660.0B (prior ¥3,606.6B) increased ¥53.4B, confirming ongoing maintenance and capex. Inventories ¥508.2B (prior ¥503.3B) rose slightly; accounts receivable ¥591.9B (prior ¥618.5B) declined, so working capital remained broadly stable. Treasury stock ¥559.8B (prior ¥480.7B) increased ¥79.2B, indicating progress in share buybacks. Given Net Income ¥84.0B and cash decrease ¥148.8B, the drivers likely include tax payments, working capital maintenance, capital expenditures, and share buybacks.
Of current Net Income ¥84.0B, Extraordinary Gains ¥47.3B (including ¥36.3B gain on sale of investment securities) account for approximately 56.3%, indicating large one-off contributions. Operating Income ¥64.8B is the source of recurring earnings but declined -17.9% YoY, showing weakened core profitability. Non-operating income ¥33.0B includes foreign exchange gains ¥16.5B, making earnings sensitive to FX volatility. Comprehensive income ¥156.5B exceeds Net Income by ¥72.5B, mainly due to positive foreign currency translation adjustments of ¥72.1B — valuation differences on the balance sheet expanded. The gap between Ordinary Income ¥89.7B and Net Income ¥84.0B is small; effective tax rate (corporate taxes ¥40.3B / profit before tax ¥124.2B = 32.4%) is standard. Overall, operating-stage declines are offset by non-operating and extraordinary gains; the repeatable sources of earnings are below last year and there is room to improve earnings quality.
Full Year forecast is maintained: Revenue ¥3,200.0B (YoY +2.8%), Operating Income ¥330.0B (YoY -3.3%), Ordinary Income ¥330.0B (YoY -12.6%), Net Income ¥230.0B. Q1 progress rates: Revenue 23.5% (standard ~25%), Operating Income 19.6% (standard 25%: -5.4pt), Ordinary Income 27.2% (standard +2.2pt), Net Income 36.5% (standard +11.5pt). Operating Income progress is behind schedule, requiring a rebound in the second half. Net Income is significantly front-loaded due to Q1 gain on sale of investment securities ¥36.3B, achieving 36.5% of full-year Net Income forecast ¥230.0B already. Similar one-off gains are unlikely in future quarters; improving operating-stage earnings (correcting gross margin and SG&A ratio) is key to achieving full-year targets.
Q1 dividend of ¥70 per share was paid. Full-year dividend forecast is ¥80 (interim ¥40, year-end ¥40 assumed), implying a payout ratio of approximately 26.0% against full-year EPS forecast ¥307.69 — a conservative level. This represents a ¥10 increase on a full-year basis from prior full-year dividend ¥70. With cash and deposits ¥1,058.3B, Equity Ratio 71.9%, and interest-bearing debt ratio 13.5%, the balance sheet is very healthy and dividend sustainability is not a concern. Treasury stock ¥559.8B (prior ¥480.7B) increased ¥79.2B, indicating concurrent share buybacks. Total Return Ratio combining dividends and buybacks is not disclosed, but the shareholder return stance appears increasingly proactive.
Risk of further operating margin deterioration: Gross margin 24.3% (prior 24.9%), SG&A ratio 15.6% (prior 14.3%) indicate worsening operating profitability. Delayed price pass-through for higher raw material and energy costs and rising SG&A lowering operating leverage are primary causes. If these conditions persist into Q2 and beyond, achieving full-year Operating Income ¥330.0B (-3.3%) may become difficult.
Dependence on one-off gains: Of current Net Income ¥84.0B, approximately 56% is Extraordinary Gains ¥47.3B (including ¥36.3B gain on sale of investment securities), which lack repeatability. Although Q1 has already reached 36.5% of the full-year Net Income forecast ¥230.0B, similar one-off gains are unlikely ahead; a delayed operating recovery would expose downside risk to final profit.
Earnings volatility from foreign exchange fluctuations: Non-operating income included foreign exchange gains ¥16.5B (prior year had foreign exchange loss ¥26.6B), so FX movements materially affect Ordinary Income. Comprehensive income also benefited from ¥72.1B positive foreign currency translation adjustments; yen depreciation boosted earnings. Future FX reversals or yen appreciation could negatively impact non-operating and comprehensive income, increasing Ordinary Income volatility.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 8.6% | 6.8% (2.9%–9.0%) | +1.8pt |
| Net Margin | 11.2% | 5.9% (3.3%–7.7%) | +5.3pt |
Operating margin 8.6% is 1.8pt above the industry median 6.8%; Net margin 11.2% is 5.3pt above the median 5.9%. However, the Net margin advantage is largely due to one-off gains; relative advantage in recurring earnings should be assessed by operating margin.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 0.3% | 13.2% (2.5%–28.5%) | -12.8pt |
Revenue growth 0.3% trails the industry median 13.2% by 12.8pt, indicating weaker growth within the sector.
※Source: Company compilation
Core operating profitability declined (Operating Income -17.9%, Operating Margin -2.0pt), with structural issues evident: gross margin down 0.6pt and SG&A ratio up 1.3pt. Achieving full-year Operating Income ¥330.0B (-3.3%) requires executing price pass-through and cost optimization from Q2 onward; monitoring progress is critical.
Net Income ¥84.0B was driven roughly 56% by one-off items such as gain on sale of investment securities ¥36.3B, limiting repeatability. Although Q1 has already reached 36.5% of the full-year Net Income forecast ¥230.0B, further extraordinary gains are unlikely; restoration of operating performance will determine sustainability of final profits.
Financial soundness (Equity Ratio 71.9%, Cash and deposits ¥1,058.3B, Debt/Capital 13.5%) is very strong, and payout ratio 26.0% indicates ample shareholder return capacity. Share buybacks are being conducted alongside dividends, showing a stance toward improving capital efficiency and enhancing shareholder returns.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are compiled by the company based on public financial statement data and are for reference only. Investment decisions are your responsibility; consult a professional if necessary before making investment decisions.