| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥295.9B | ¥293.1B | +1.0% |
| Operating Income / Operating Profit | ¥36.0B | ¥34.8B | +3.2% |
| Ordinary Income | ¥37.7B | ¥36.4B | +3.6% |
| Net Income / Net Profit | ¥25.3B | ¥25.2B | +0.1% |
| ROE | 7.3% | 7.7% | - |
For the fiscal year ended March 2026, Yotai achieved modest revenue and profit growth with Revenue ¥295.9B (vs prior year +¥2.8B +1.0%), Operating Income ¥36.0B (vs prior year +¥1.1B +3.2%), Ordinary Income ¥37.7B (vs prior year +¥1.3B +3.6%), and Net Income attributable to owners of the parent ¥25.3B (vs prior year +¥0.1B +0.1%). At the operating level, a gross margin of 21.5% (vs prior year +29bp) and controlled SG&A drove an Operating Margin improvement to 12.2% (vs prior year +28bp), enhancing profitability. Ordinary Income expanded to ¥37.7B supported by stable non-operating income centered on dividend income of ¥1.2B, but Net Income growth was limited to +0.1% due to recording special losses of ¥3.3B (net -¥2.5B) including ¥0.3B loss on disposal of fixed assets and ¥0.3B impairment losses. By segment, the Refractories segment accounted for core earnings with Revenue ¥241.8B (YoY flat) and Operating Income ¥47.6B (YoY +0.7%) at a 19.7% margin, while Engineering drove revenue and profit growth with Revenue ¥54.1B (YoY +5.2%) and Operating Income ¥8.0B (YoY +11.2%) at a 14.7% margin. Operating Cash Flow was ¥25.0B (YoY -43.6%), slowing significantly; Operating CF/Net Income was maintained at 1.01x but working capital pressures—Accounts Receivable increase ¥9.0B and Accounts Payable decrease ¥7.8B—compressed cash generation. Free Cash Flow was ¥10.1B, below dividend payments of ¥16.7B, resulting in FCF Coverage of 0.57x. The balance sheet remains very healthy with Total Assets ¥422.3B, Net Assets ¥344.2B, Equity Ratio 81.5%, and Interest-bearing Debt ¥1.7B.
【Revenue】Revenue was ¥295.9B (YoY +1.0%), a modest increase. By segment, Refractories was stable at ¥241.8B (YoY +0.0%); steel-related sales slightly declined to ¥118.5B (YoY -1.5%) but other end-markets compensated with ¥123.2B (YoY +1.5%). Engineering was robust at ¥54.1B (YoY +5.2%), with ¥6.2B to steel and ¥47.8B to other areas, reflecting broad project execution. Revenue composition was Refractories 81.7% and Engineering 18.3%, with Refractories remaining dominant. Cost of sales was ¥232.1B (78.5% of Revenue), up ¥1.4B YoY, but gross margin improved to 21.5% (prior year 21.2%) (+29bp) due to raw material cost control and favorable product mix.
【Profitability】Operating Income was ¥36.0B (YoY +3.2%). SG&A was restrained at ¥27.8B (9.4% of Revenue), up only 1.1% from ¥27.5B prior year, resulting in Operating Margin improvement to 12.2% (prior year 11.9%) (+28bp). Segment Operating Income was Refractories ¥47.6B (margin 19.7%) and Engineering ¥8.0B (margin 14.7%); after company-level expenses of ¥19.6B, consolidated Operating Income was ¥36.0B. Ordinary Income was ¥37.7B (YoY +3.6%), supported by stable non-operating income ¥2.1B (dividends received ¥1.2B, interest income ¥0.1B, etc.) and slight increase in non-operating expenses ¥0.3B (interest expense minimal), lifting Ordinary Income margin to 12.7% (prior year 12.4%) (+32bp. However, special items netted -¥2.5B (special gains ¥0.8B from sale of available-for-sale securities; special losses ¥3.3B including ¥0.3B loss on disposal of fixed assets and ¥0.3B impairment losses), reducing profit before tax to ¥34.4B (YoY -7.0%). Income taxes were ¥9.7B (effective tax rate 28.2%), yielding Net Income attributable to owners of the parent ¥25.3B (YoY +0.1%), essentially flat. In conclusion, while operating and ordinary profitability improved, the benefit was largely offset at the Net Income level by special losses, limiting the increase in Net Income.
The Refractories segment was stable with Revenue ¥241.8B (YoY +0.0%) and Operating Income ¥47.6B (YoY +0.7%), maintaining a 19.7% margin. Steel-related sales were slightly down at ¥118.5B (YoY -1.5%), while other end-markets such as cement, glass, and environmental equipment supplied ¥123.2B (YoY +1.5%), supporting stable overall earnings. The Engineering segment drove revenue growth with ¥54.1B (YoY +5.2%), Operating Income ¥8.0B (YoY +11.2%), and margin rising to 14.7% (+72bp YoY). Steel-related was small at ¥6.2B, while other areas such as environmental facilities accounted for ¥47.8B, with solid project progress and improved profitability. There is approximately a 5.0pt margin gap between the two segments: Refractories’ high-margin profile underpins corporate stability, while Engineering’s top-line and bottom-line growth contributed to consolidation-level gains. Company-level expenses were ¥19.6B, barely up YoY, securing Operating Income of ¥36.0B.
【Profitability】Operating Margin improved to 12.2% from 11.9% (+28bp), supported by gross margin 21.5% (+29bp) and SG&A ratio 9.4%. By segment, Refractories maintained a high margin of 19.7%, and Engineering improved to 14.7%. ROE was 7.3%, slightly down from 7.4% the prior year, underpinned by Net Profit Margin 8.5% (prior year 8.6%) and low financial leverage of 1.23x. ROA (on Ordinary Income basis) improved to 9.0% from 8.7% (+30bp), indicating better core business profitability. 【Cash Quality】Operating CF/Net Income was 1.01x, a minimal acceptable level, but OCF/EBITDA was weak at 0.50x, with working capital headwinds (Accounts Receivable +¥9.0B, Accounts Payable -¥7.8B) compressing cash generation. Free Cash Flow ¥10.1B contrasts with high inventories: DSO 125 days, DIO 181 days, and CCC 280 days—indicating substantial room for working capital efficiency improvement. Inventory stood at ¥175.2B (Finished goods ¥52.3B, Raw materials ¥60.0B, Work-in-progress ¥2.9B), accounting for 59.2% of Revenue, making inventory reduction a key challenge. 【Financial Soundness】Equity Ratio rose to 81.5% (prior year 79.6%), Interest-bearing Debt ¥1.7B—very small—yielding Debt/EBITDA 0.03x, effectively nearly debt-free. Current Ratio was 494.8% and Cash & Deposits ¥57.5B, reflecting very high short-term payment capacity. Of Total Assets ¥422.3B, Current Assets were ¥297.1B and Non-current Assets ¥125.2B (Property, plant and equipment ¥82.8B, Investment securities ¥38.3B), maintaining one of the industry’s most conservative financial profiles.
Operating CF was ¥25.0B, down -43.6% from ¥44.3B the prior year. The main cause was working capital headwinds: Accounts Receivable increased ¥9.0B and Accounts Payable decreased ¥7.8B, resulting in approximately ¥16.8B of cash outflow. Operating CF subtotal (before working capital changes) was ¥36.1B, down from ¥59.3B prior year, and tax payments of ¥9.3B further burdened cash. Operating CF/Net Income was 1.01x, but OCF/EBITDA of 0.50x highlights weak cash conversion from EBITDA. Investing CF was -¥14.9B, mainly capital expenditures of ¥14.2B, which roughly matched depreciation of ¥14.2B—indicating maintenance-level capex. Proceeds from sale of securities ¥0.3B and purchases of investment securities -¥0.2B were minor. Free Cash Flow was ¥10.1B (Operating CF ¥25.0B + Investing CF -¥14.9B), insufficient to cover dividend payments of ¥16.7B, resulting in FCF Coverage of 0.57x. Financing CF was -¥16.9B, primarily dividend payments -¥16.5B, with net increase in long-term borrowings ¥1.5B (proceeds ¥2.9B, repayments -¥1.4B) and disposal of treasury shares ¥1.4B contributing slightly. Cash & Deposits fell ¥6.6B from beginning balance ¥64.1B to ending balance ¥57.5B, reflecting continued cash outflows from high working capital needs and dividend payments. The high CCC of 280 days is a bottleneck for cash efficiency; improving receivables and inventories is a priority for subsequent periods.
Core recurring earnings are centered on Operating Income ¥36.0B, securing a stable margin of 12.2% of Revenue. Non-operating income ¥2.1B (0.7% of Revenue) mainly comprises dividends received ¥1.2B and interest income ¥0.1B, reflecting stable returns from financial assets. Non-recurring items consisted of special gains ¥0.8B (gain on sale of investment securities) and special losses ¥3.3B (loss on disposal of fixed assets ¥0.3B, impairment losses ¥0.3B, etc.), netting -¥2.5B and weighing on Net Income. The gap between Ordinary Income ¥37.7B and Net Income ¥25.3B (~¥12B) is primarily due to special losses and income taxes ¥9.7B (effective tax rate 28.2%). Operating CF/Net Income at 1.01x maintains a minimum level of cash realization, but OCF/EBITDA 0.50x indicates delayed cash conversion of accruals. Comprehensive Income was ¥29.8B, ¥4.5B higher than Net Income ¥25.3B, mainly due to ¥5.1B increase in valuation difference on available-for-sale securities, reflecting expanded unrealized gains on investment securities. Overall, core earnings quality is sound with sustained operating-level profitability improvement; however, expanded working capital delaying cash conversion and one-off losses have temporarily constrained earnings quality. Assuming special losses are non-recurring, there is ample room for Net Income recovery in subsequent periods.
The company plan for FY ending March 2027 forecasts Revenue ¥300.0B (vs prior year +1.4%), Operating Income ¥38.0B (vs prior year +5.7%), Ordinary Income ¥39.0B (vs prior year +3.4%), and Net Income attributable to owners of the parent ¥26.0B (EPS forecast ¥140.99) — expecting both revenue and profit growth. Dividends are expected at annual ¥45 per share (prior year total ¥90 was interim + year-end). Progress against the initial plan at the end of H1 reached 98.6% of full-year Revenue target, 94.7% of Operating Income target, and 96.7% of Ordinary Income target—implying only modest upside is needed in H2 to meet guidance. Key assumptions for achievement include maintaining gross margin around 21.5%, continued SG&A restraint, and smooth execution and margin preservation of Engineering projects. Additionally, avoiding recurrence of special losses and correcting the CCC of 280 days (accelerating receivables, reducing inventories, optimizing payable terms) to improve Operating CF are important. If high working capital burden persists, FCF generation may continue to fall short of dividend payments; thus, alongside achieving targets, improving capital efficiency is a priority.
Dividends were maintained at annual ¥90 (interim ¥45, year-end ¥45), unchanged from the prior year. Payout Ratio was 63.5% (total dividends ¥16.7B against Net Income ¥25.3B), indicating a high payout and a focus on stable dividends. Note that returns have been via dividends only; no share buybacks were executed, so this is referred to as "Payout Ratio" distinct from "Total Return Ratio." Dividend payments ¥16.7B exceed Free Cash Flow ¥10.1B, yielding FCF Coverage 0.57x, meaning dividends are not fully financed by FCF alone and are supplemented by ample Cash & Deposits ¥57.5B and an effectively debt-free balance sheet. In the short term, there is little concern about dividend sustainability given strong cash balances and low borrowings, but medium-to-long-term sustainability depends on improving Operating CF and correcting CCC to boost FCF generation. The company’s dividend forecast for FY2027 is annual ¥45 (presumably interim + year-end total), and if full-year Net Income ¥26.0B is achieved, Payout Ratio would fall to approximately 35%, easing dividend burden. The dividend policy appears to prioritize stability, and improving working capital efficiency and Operating CF recovery will strengthen the foundation for sustained shareholder returns.
Working capital efficiency deterioration risk: High working capital burden with DSO 125 days, DIO 181 days, and CCC 280 days continues, and Operating CF dropped to ¥25.0B (YoY -43.6%). Accounts Receivable increase ¥9.0B and Accounts Payable decrease ¥7.8B are imposing cash outflow pressure, raising concerns about unstable cash generation. With dividends ¥16.7B not covered by FCF, FCF Coverage at 0.57x implies reduced mid-term liquidity cushion. Inventory at ¥175.2B (59.2% of Revenue) also poses obsolescence and impairment risks. If CCC correction does not progress, simultaneous pursuit of investment and dividends may be constrained.
Recurrence risk of special losses: This fiscal year recorded special losses ¥3.3B including loss on disposal of fixed assets ¥0.3B and impairment losses ¥0.3B, limiting Net Income growth. As assets age and replacement investment continues, there is a non-negligible risk of further disposal and impairment charges. If special losses become recurring, improvements at the Ordinary Income level may not translate to Net Income, affecting investor assessment of profitability. Forecasts assume these special losses are one-off, so monitoring any further special loss developments in H2 is important.
Demand cycle dependence and concentration risk: The Refractories segment accounts for 81.7% of Revenue, indicating high reliance on a single business. A downturn in major end-markets—steel, cement, glass—or declines in plant utilization could pressure volumes and prices. Steel-related sales were down -1.5% YoY, illustrating sensitivity to industry demand fluctuations. Price volatility and procurement risk for refractory raw materials such as magnesia can also impact gross margins, necessitating ongoing raw material cost management.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 12.2% | 7.8% (4.6%–12.3%) | +4.4pt |
| Net Profit Margin | 8.5% | 5.2% (2.3%–8.2%) | +3.3pt |
Our Operating Margin of 12.2% exceeds the manufacturing median of 7.8% by +4.4pt, and Net Profit Margin 8.5% exceeds the median 5.2% by +3.3pt. Profitability ranks in the upper tier within the industry, reflecting Refractories’ high-margin profile.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 1.0% | 3.7% (-0.4%–9.3%) | -2.7pt |
Revenue growth of 1.0% lags the industry median 3.7% by -2.7pt. Growth ranks in the lower-middle of the industry, reflecting market maturity in Refractories and small scale of Engineering.
※Source: Company compilation
Operating-level profitability improvement persisted, with Operating Margin 12.2% (+28bp YoY) and Gross Margin 21.5% (+29bp YoY). Operating Margin exceeds the manufacturing median by +4.4pt, evidencing Refractories’ high-margin competitive advantage. SG&A ratio restraint at 9.4% also contributed, indicating a stable core earnings base. The company plans FY2027 Operating Income ¥38.0B (+5.7%); if gross margin is maintained and Engineering margin improvements continue, the operating-level improvement trend is expected to persist.
Declining working capital efficiency is a bottleneck for cash generation. With CCC 280 days, DSO 125 days, and DIO 181 days, Operating CF decelerated to ¥25.0B (YoY -43.6%), and OCF/EBITDA was weak at 0.50x. Free Cash Flow ¥10.1B could not cover dividend payments ¥16.7B, resulting in FCF Coverage 0.57x. Short-term resilience is supported by Cash & Deposits ¥57.5B and an effectively debt-free balance sheet, but medium-term dividend sustainability and growth investment capacity require corrective actions: accelerating receivables collection and inventory reduction to improve CCC. Future quarterly results should be monitored for improvements in working capital management and OCF recovery trends.
Financial strength remains among the industry’s most conservative: Equity Ratio 81.5%, Interest-bearing Debt ¥1.7B, Debt/EBITDA 0.03x. Current Ratio 494.8% and Cash & Deposits ¥57.5B mean near-zero short-term liquidity risk. This strong financial base supports resilience in economic cycles and long-term stability. However, low leverage constrains potential upside for ROE (currently 7.3%); thus, future improvement in capital efficiency via margin gains and asset turnover improvements could enhance shareholder capital efficiency.
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It is not a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the company from public financial statement data. Investment decisions are your own responsibility; please consult a professional if necessary.