MITANI SEKISAN CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥49.70B
• Operating Income: ¥8.59B
• Net Income: ¥5.05B
• EPS: ¥392.60

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

Mitani Sekisan (5273) delivered strong FY2026 Q2 (cumulative) results under JGAAP on a consolidated basis, with solid top-line growth and even stronger bottom-line expansion. Revenue rose 18.2% YoY to ¥49.7bn, while operating income increased 28.3% to ¥8.59bn, indicating margin expansion and positive operating leverage. Net income advanced 39.2% YoY to ¥6.92bn, with a net margin of 13.92%, underscoring improved profitability. The operating margin stands at approximately 17.3%, up from an estimated 15.9% in the prior-year period, a roughly 1.4pp improvement. Ordinary income of ¥9.18bn implies stable non-operating balance, and the effective tax rate is estimated at about 24–25% based on disclosed tax expense versus pre-tax income. Balance sheet strength is notable, with total equity of ¥96.4bn representing roughly 72.4% of total assets of ¥133.1bn (computed equity ratio), despite the equity ratio field showing 0% due to non-disclosure formatting. Liquidity is robust, evidenced by a current ratio of 299% and quick ratio of 282%, supported by sizeable working capital of ¥48.5bn. Leverage is low, with total liabilities of ¥34.7bn translating to a debt-to-equity proxy of 0.36x. The DuPont profile shows ROE of 7.18% driven by a 13.92% net margin, asset turnover of 0.373x, and conservative financial leverage of 1.38x. Gross margin of 19.8% and the operating margin suggest disciplined cost control and/or improved pricing. Cash flow statements were not disclosed in this dataset (zeros indicate unreported), so operating cash flow, free cash flow, and EBITDA cannot be assessed here. Dividend fields also indicate no disclosure (DPS and payout ratio shown as zero), so distribution policy cannot be inferred from this snapshot. Share count and book value per share were not disclosed, though EPS is reported at ¥392.60. Overall, fundamentals indicate earnings quality improvement and a strong balance sheet, but the lack of cash flow disclosure limits the assessment of cash conversion and capital allocation. Key monitoring points include cost inflation pass-through, order momentum, and eventual cash flow and dividend disclosures.

Profitability Analysis

ROE of 7.18% reflects a DuPont decomposition of 13.92% net margin × 0.373x asset turnover × 1.38x financial leverage. The net margin is healthy for a materials/industrial supplier and improved YoY alongside operating profit growth outpacing revenue. Operating margin is approximately 17.3% (¥8.59bn/¥49.70bn), up ~1.4pp from an estimated ~15.9% in the prior-year period, indicating positive operating leverage and improved cost absorption. Gross margin of 19.8% suggests a relatively tight spread between gross and operating margins, implying good SG&A discipline. Ordinary income exceeded operating income, pointing to a favorable non-operating balance (e.g., financial income), though details are not disclosed. Effective tax rate is approximately 24.4% (¥2.23bn tax / ~¥9.15bn pre-tax), consistent with a normalized rate in Japan. EBITDA and interest coverage cannot be analyzed due to non-disclosure of depreciation and interest expense in this dataset; margins based on EBITDA are thus not meaningful here. Overall, profitability quality appears sound, with margin expansion and controlled overheads supporting returns.

Growth Assessment

Revenue increased 18.2% YoY to ¥49.7bn, while operating income rose 28.3% and net income 39.2%, indicating quality growth with margin expansion. Estimated prior-period revenue of ~¥42.1bn and operating income of ~¥6.70bn imply operating margin expansion from ~15.9% to ~17.3%. The stronger growth in net income vs. operating income suggests an additional lift from non-operating items and/or a modestly lower effective tax burden. The gross margin at 19.8% combined with higher operating margin indicates improved SG&A efficiency or better pricing/mix. Asset turnover at 0.373x (on a cumulative Q2 basis) implies moderate utilization; seasonality and timing effects should be considered. Revenue sustainability will hinge on order inflows in construction/civil engineering end-markets and the company’s ability to pass through raw material and energy costs. With leverage low and liquidity ample, the company has capacity to sustain growth initiatives; however, absence of CF disclosures limits visibility into internal funding via operating cash flow. Near-term outlook appears constructive given operating leverage, but sensitivity to demand cycles and input cost volatility remains.

Financial Health

Liquidity is strong: current ratio 299.1%, quick ratio 281.8%, and working capital of ¥48.5bn, supported by current assets of ¥72.9bn versus current liabilities of ¥24.4bn. Solvency is robust: total equity of ¥96.4bn versus total liabilities of ¥34.7bn yields a liabilities-to-equity ratio of ~0.36x. Computed equity ratio is ~72.4% (¥96.4bn/¥133.1bn), indicating a conservative capital structure, despite the reported field showing 0% due to non-disclosure formatting. Financial leverage in the DuPont framework is 1.38x, consistent with low balance sheet risk. Interest expense is not disclosed in this dataset, but given low leverage, refinancing and interest-rate risks appear contained. Inventories are modest at ¥4.20bn relative to sales, suggesting disciplined working capital, though without comparative data we cannot assess turns. Overall, the balance sheet provides ample resilience against cyclical volatility.

Cash Flow Quality

Operating cash flow, investing cash flow, financing cash flow, cash and cash equivalents, depreciation, and EBITDA were not disclosed in this dataset (zeros indicate unreported), preventing a direct assessment of cash conversion, capital intensity, or free cash flow generation. Consequently, OCF/Net Income and FCF metrics presented as zero are not informative. Earnings quality must therefore be inferred from margins and balance sheet strength: margin expansion and low leverage suggest sustainability, but cash conversion remains unverified. Working capital appears ample with large current asset buffers; however, without period-over-period changes, we cannot judge whether earnings are supported by cash inflows or offset by working capital build. Capex intensity and maintenance requirements cannot be evaluated here due to missing investing CF and depreciation data.

Dividend Sustainability

Dividend-related fields (DPS, payout ratio, FCF coverage) are undisclosed in this dataset and shown as zero placeholders; thus, dividend sustainability cannot be directly assessed. EPS is ¥392.60 for the cumulative period, indicating capacity for distributions in principle, but without actual DPS, policy commentary, or cash flow data, coverage from earnings and free cash flow cannot be determined. The company’s conservative balance sheet (equity ratio ~72%) provides flexibility for dividends or buybacks, but actual policy and timing remain unknown from this snapshot. Until OCF and capex are disclosed, prudent assessment relies on monitoring future guidance and board resolutions on dividends.

Risk Assessment

Business Risks:

• Exposure to domestic construction and civil engineering demand cycles affecting order intake and capacity utilization
• Input cost volatility (cement, aggregates, energy, logistics) impacting gross margins and pricing power
• Project execution timing and potential delays that can shift revenue recognition and margins
• Labor availability and wage inflation pressures in manufacturing and construction supply chains
• Competitive pricing dynamics in precast/concrete products and related materials
• Regulatory and safety standards changes impacting production processes and costs
• Natural disaster risk affecting operations, supply chain, and sites in Japan

Financial Risks:

• Limited visibility on cash generation due to non-disclosure of cash flow statements in this dataset
• Potential working capital swings tied to project timing and receivables collections
• Raw material and energy price spikes could compress margins if pass-through lags
• Interest rate and refinancing risk appear modest given low leverage but not fully assessed without debt detail

Key Concerns:

• Absence of disclosed operating, investing, and financing cash flows constrains assessment of earnings-to-cash conversion
• Lack of depreciation and capex data limits visibility on maintenance needs and sustainable EBITDA
• Dividend policy and payout not disclosed, reducing clarity on capital allocation priorities

Investment Implications

Key Takeaways:

• Strong H1 topline growth (+18.2% YoY) with outsized operating profit growth (+28.3%) signals positive operating leverage
• Operating margin improved to ~17.3% from ~15.9% YoY, reflecting better cost control and/or pricing
• Net margin of 13.9% and ~24% effective tax rate bolster bottom-line quality
• Balance sheet is conservative: equity ratio ~72% and liabilities/equity ~0.36x
• Liquidity remains ample with a current ratio near 3.0x and sizeable working capital
• Cash flow, EBITDA, and dividend data are not disclosed here, limiting cash-based valuation and payout analysis

Metrics to Watch:

• Order backlog, new orders, and book-to-bill to gauge revenue sustainability
• Gross and operating margin trends versus raw material and energy cost indices
• Operating cash flow and free cash flow once disclosed; OCF/NI ratio and working capital changes
• Capex and depreciation to assess capital intensity and maintenance needs
• ROE drivers: asset turnover improvements and any change in financial leverage
• Dividend announcements, payout ratio, and capital allocation guidance

Relative Positioning: Within building materials and precast-related peers, the company stands out for margin expansion and a strong equity base, suggesting resilience; however, the absence of cash flow disclosures in this snapshot limits comparability on cash conversion and capital intensity.

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