| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥88.6B | ¥79.6B | +11.3% |
| Operating Income | ¥10.6B | ¥12.9B | -17.9% |
| Ordinary Income | ¥8.3B | ¥12.1B | -31.2% |
| Net Income | ¥6.0B | ¥8.5B | -29.5% |
| ROE | 0.9% | 1.3% | - |
FY2026 Q1 results: Revenue ¥88.6B (YoY +¥9.0B +11.3%), Operating Income ¥10.6B (YoY -¥2.3B -17.9%), Ordinary Income ¥8.3B (YoY -¥3.8B -31.2%), quarterly Net Income attributable to owners of the parent ¥4.8B (YoY -¥1.9B -28.6%). Revenue achieved double-digit growth, but gross profit margin deteriorated substantially to 26.1% (prior year 31.7%, -5.6pt), and Operating Income margin fell to 11.9% (prior year 16.2%, -4.3pt). In addition to operating profit decline, foreign exchange loss of ¥1.0B (offset partially by foreign exchange gain of ¥0.7B recorded in non-operating income, net negative) and interest expense of ¥0.4B pressured Ordinary Income. Pre-tax profit was ¥8.3B, tax expense ¥2.4B, non-controlling interests ¥1.1B, leaving Net Income attributable to owners of the parent of ¥4.8B. The pattern is revenue up and profit down, with deterioration in profitability of the CarbonProduct business and increases in non-operating expenses depressing earnings.
[Revenue] Revenue of ¥88.6B, up +11.3% YoY. CarbonProduct Business ¥74.2B (sales mix 83.8%, YoY +10.3%), SiliconCarbideProduct Business ¥11.1B (sales mix 12.6%, YoY +10.7%)—both segments achieved double-digit revenue growth. Within CarbonProduct, fine carbon-related products ¥48.2B and electrode-related products ¥26.0B, suggesting contributions from both volume and price. SiliconCarbideProduct performed steadily amid expanding demand for high-performance materials. Other segments (real estate leasing, etc.) ¥3.2B, up +44.7% YoY, but limited impact on consolidated revenue.
[Profitability] Cost of sales ¥65.4B (cost of sales ratio 73.9%, prior year 68.3%, +5.6pt) rose sharply, worsening gross profit to ¥23.2B (gross margin 26.1%, prior year 31.7%, -5.6pt). SG&A ¥12.6B (SG&A ratio 14.2%) was restrained, rising only +2.4% YoY relative to revenue growth, resulting in Operating Income ¥10.6B (Operating margin 11.9%, prior year 16.2%, -4.3pt). The main drivers of lower gross margin appear to be higher raw material and energy costs and changes in product mix in CarbonProduct; silicon carbide’s high margin could not offset the overall margin deterioration. Non-operating income included equity-method investment income ¥0.5B and foreign exchange gains ¥0.7B, while non-operating expenses ¥3.3B (including foreign exchange losses ¥1.0B and interest expense ¥0.4B) pushed Ordinary Income down to ¥8.3B (YoY -31.2%). Pre-tax profit ¥8.3B less corporate taxes ¥2.4B (effective tax rate 28.9%) and non-controlling interests ¥1.1B yielded consolidated Net Income ¥6.0B (Net margin 6.7%, prior year 10.6%, -3.9pt). In conclusion, the quarter exhibited revenue growth but profit decline, notably due to large gross margin deterioration and negative operating leverage.
CarbonProduct Business: Revenue ¥74.2B (YoY +10.3%), Operating Income ¥5.2B (YoY -34.7%), margin 7.0% (prior year 11.9%, -4.9pt). Despite revenue growth, margin declined significantly, strongly affected by higher costs and adverse product mix. SiliconCarbideProduct Business: Revenue ¥11.1B (YoY +10.7%), Operating Income ¥4.2B (YoY -2.4%), margin 37.3% (prior year 42.5%, -5.2pt). High profitability maintained, though margin compressed slightly. Both segments saw reduced Operating Income, but SiC’s high margins continued to underpin consolidated profit. Other segments: Revenue ¥3.2B, Operating Income ¥1.2B from stable income such as real estate leasing. Of consolidated Operating Income ¥10.6B, SiC accounts for roughly 40%, indicating very high profit contribution relative to its 12.6% revenue share.
[Profitability] Operating margin 11.9% (prior year 16.2%, -4.3pt), Net margin 6.7% (prior year 10.6%, -3.9pt)—profitability metrics declined across the board. ROE 0.9% (Net Income attributable to owners of the parent ¥4.8B ÷ shareholders’ equity ¥53.6B ×4 annualized) remains very low. The large deterioration in gross margin to 26.1% (prior year 31.7%) is the main cause, producing negative operating leverage where profit margins shrink despite revenue growth. [Cash Quality] Operating Cash Flow data not disclosed, but Accounts Receivable ¥97.0B (prior year ¥113.7B, -14.7%), Inventories total ¥201.6B (finished goods ¥38.4B, raw materials ¥39.8B, work-in-process ¥123.5B; prior year total ¥194.4B, +3.7%) indicate working capital remains elevated. Work-in-process ratio 61.3% signals expanded in-process inventory and potential delays in cash conversion. [Investment Efficiency] Total assets ¥836.0B vs. Revenue ¥88.6B yields quarter-based total asset turnover 0.11x (annualized 0.43x), low. Estimated ROIC = Operating Income ¥10.6B × (1-0.29) ÷ (Net Assets ¥628.8B + Interest-bearing debt ¥102.9B) ≒ 1.0%, indicating weak capital efficiency. [Financial Health] Equity Ratio 75.2% (Net assets ¥628.8B ÷ Total assets ¥836.0B), interest-bearing debt ¥102.9B (short-term borrowings ¥102.3B + long-term borrowings ¥1.6B) giving debt-to-equity 0.16x—financially very sound. Cash and deposits ¥151.7B can broadly cover short-term borrowings (coverage vs. short-term borrowings 1.48x), current ratio 275.9%, quick ratio 253.8%—liquidity ample.
Cash flow statement data not disclosed; analysis based on balance sheet movements. Cash and deposits ¥151.7B (prior year ¥151.8B, -¥0.1B) virtually unchanged. Accounts Receivable ¥97.0B (prior year ¥113.7B, -¥16.7B) decreased significantly, indicating improved collections, while Inventories increased to ¥201.6B (prior year ¥194.4B, +¥7.2B), with Work-in-Process ¥123.5B (prior year ¥122.3B) remaining elevated. Accounts Payable ¥37.5B (prior year ¥29.1B, +¥8.4B, +28.9%) rose with expanded procurement/production. Short-term borrowings ¥102.3B (prior year ¥101.5B) slightly increased, indicating continued reliance on short-term debt for working capital. Investment securities ¥101.4B (prior year ¥102.0B) slightly decreased; fixed assets ¥356.8B (prior year ¥365.3B) declined due to depreciation. Net assets ¥628.8B (prior year ¥636.1B, -¥7.3B) decreased mainly from retained earnings ¥364.9B (prior year ¥370.7B, -¥5.8B) reflecting dividend payments and current period profit. Overall, while receivables collection progressed, inventory increase and higher payables offset this, keeping cash broadly steady. The build-up of work-in-process suggests production lead times or process bottlenecks, indicating room to improve cash conversion efficiency.
Core recurring earnings are Operating Income ¥10.6B, reflecting operating earning power. Non-operating income ¥1.1B includes equity-method investment income ¥0.5B and foreign exchange gains ¥0.7B (temporary factors); non-operating expenses ¥3.3B include foreign exchange losses ¥1.0B (temporary) and interest expense ¥0.4B. Net foreign exchange impact was approximately -¥0.3B, a volatile, non-recurring factor. Extraordinary losses include impairment/loss on disposal of fixed assets ¥0.2B, minor at roughly 3% of Net Income. There is no divergence between Ordinary Income ¥8.3B and pre-tax profit ¥8.3B; after tax expense ¥2.4B, Net Income ¥6.0B less non-controlling interests ¥1.1B yields Net Income attributable to owners of the parent ¥4.8B. Comprehensive income ¥5.7B (owners of the parent ¥4.5B, non-controlling interests ¥1.1B); the ¥-0.3B difference versus Net Income ¥6.0B arises from unrealized gain/loss on securities -¥1.0B, foreign currency translation adjustments +¥0.1B, retirement benefit adjustments +¥0.1B, and share of OCI of equity-method affiliates +¥0.6B. With Operating Cash Flow data undisclosed, analyzing divergence between operating profit and cash flows is difficult; however, receivables decline offset by increases in inventories and payables suggests working capital was broadly neutral to cash in the short term. Overall, structural concern lies in the decline in core gross margin, and volatility in FX and interest rates undermines stability at the Ordinary Income level.
Full Year forecast: Revenue ¥410.0B (YoY +8.7%), Operating Income ¥43.0B (YoY -10.6%), Ordinary Income ¥46.0B (YoY -9.9%), Net Income attributable to owners of the parent ¥27.0B. Q1 progress rates: Revenue 21.6% (¥88.6B ÷ ¥410.0B), Operating Income 24.6% (¥10.6B ÷ ¥43.0B), Ordinary Income 18.1% (¥8.3B ÷ ¥46.0B), Net Income 17.8% (¥4.8B ÷ ¥27.0B). Net Income lags standard 25% progress by about 7pt, and Ordinary Income similarly lags by about 7pt. Operating Income progress is roughly standard, but non-operating expenses weighed on Ordinary and Net Income progress. No revision to full-year forecasts in Q1; the company maintains the full-year plan. If CarbonProduct profitability improves in H2, FX volatility moderates, and tax rate normalizes, achieving the full-year targets is possible—but margin recovery post-Q2 and containment of non-operating expenses are prerequisites. The fact Operating Income progress is near standard offers some support, but the Net Income shortfall reflects non-operating factors (FX, interest, tax) that must be managed for a H2 recovery.
Annual dividend forecast ¥100 (allocation between interim and year-end unspecified), unchanged from prior year ¥100. Payout ratio versus full-year forecast EPS ¥244.19 is about 41.0% (¥100 ÷ ¥244.19), a sustainable level. Q1 EPS ¥43.58 (annualized approx. ¥174) is behind the full-year forecast pace, but the company has not revised the dividend forecast, implying intent to maintain stable dividends assuming H2 earnings recovery. Cash and deposits ¥151.7B, low leverage (interest-bearing debt ¥102.9B), and Equity Ratio 75.2% indicate a strong financial base and no immediate constraints on dividend payments. No share buybacks disclosed; shareholder returns currently limited to dividends and Total Return Ratio concept not applied. A payout ratio of 41% balances shareholder returns with retained earnings for growth; even if full-year Net Income falls short, the level of cash and low debt suggests a high likelihood of maintaining the dividend.
Large gross margin deterioration (26.1%, YoY -5.6pt): Cost of sales ratio rose to 73.9%, significantly eroding CarbonProduct profitability. Likely drivers include raw material and energy cost increases, adverse product mix, and delayed price pass-through. Without structural improvement, full-year Operating Income decline could persist as planned, and SiC’s high margins may not be sufficient to sustain consolidated profitability. Given SG&A restraint, gross margin recovery is the top priority for profit restoration.
Working capital expansion and WIP retention: Of Inventories ¥201.6B, Work-in-Process ¥123.5B (61.3%) is high, suggesting extended production lead times or process bottlenecks. While Accounts Receivable decreased, WIP growth impedes cash conversion. Concerns remain about sustainable free cash flow generation for capex and dividends.
Concentration of short-term debt and FX/interest rate risk: Of interest-bearing debt ¥102.9B, short-term borrowings are ¥102.3B (99.4%), indicating concentration of maturities in the short term. Although cash and deposits ¥151.7B provide coverage, rising interest rates or deteriorating refinancing conditions could raise costs. Non-operating expenses already include foreign exchange loss ¥1.0B and interest expense ¥0.4B; FX and interest trends can directly hit Ordinary Income. Equity-method income ¥0.5B and foreign exchange gain ¥0.7B partially offset, but net non-operating contribution is negative and compresses earnings at the Ordinary Income stage.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 11.9% | 6.8% (2.9%–9.0%) | +5.1pt |
| Net Margin | 6.7% | 5.9% (3.3%–7.7%) | +0.8pt |
Consolidated Operating Margin 11.9% exceeds the manufacturing median 6.8% by +5.1pt, maintaining high profitability within the industry. Net Margin 6.7% also exceeds the median 5.9%. However, YoY declines (Operating Margin -4.3pt, Net Margin -3.9pt) signal narrowing industry advantage.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 11.3% | 13.2% (2.5%–28.5%) | -1.9pt |
Revenue growth 11.3% is -1.9pt below the manufacturing median 13.2% but still double-digit, representing a standard growth pace in the industry. It sits in the lower half of the IQR (2.5%–28.5%), indicating room to accelerate growth.
※Source: Company compilation
Progress on gross margin improvement is highest priority: Q1 saw cost of sales ratio at 73.9% (YoY +5.6pt) and Operating Margin down to 11.9% (YoY -4.3pt). CarbonProduct margin 7.0% (prior year 11.9%) is the main driver; urgent measures to address raw material and energy cost inflation are needed. Confirmation in Q2 of price revisions or cost reductions would be a catalyst for gross margin reversal and achievement of full-year targets. SiliconCarbideProduct margin 37.3% and high-value product mix improvements will also be key to gross margin recovery.
Normalization of working capital efficiency and reduction of WIP: Work-in-Process ¥123.5B (61.3% of inventories) signals expanded in-process inventory and possible production bottlenecks. Although receivables declined YoY -14.7%, WIP retention impedes cash conversion. A downtrend in WIP and improved inventory turnover in subsequent quarters would support Operating Cash Flow growth and the sustainability of dividends and investments. Accounts Payable +28.9% indicates active procurement; balancing normalized production and inventory optimization is critical.
Course correction needed to meet full-year guidance: Q1 Net Income progress 17.8% is ~7pt below the standard 25%, and Ordinary Income progress 18.1% is similarly behind. Operating Income progress 24.6% is close to standard, but non-operating expenses (FX loss, interest) have weighed on Ordinary and Net Income. Unless FX volatility moderates, interest burden eases, and effective tax rate normalizes in H2, downside risk to full-year Net Income ¥27.0B rises. The company maintains its forecast, but achievement depends on both non-operating improvement and restoration of core margins in the second half.
This report is an AI-generated earnings analysis based on XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.