YODOKO,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥101.88B
• Operating Income: ¥7.31B
• Net Income: ¥6.68B
• EPS: ¥41.78

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

Yodoko (Yodogawa Steel Works) reported FY2026 Q2 consolidated results under JGAAP showing modest top-line softness but resilient bottom-line performance. Revenue came in at ¥101.876bn, down 3.3% YoY, indicating a slight demand slowdown or price normalization across key steel product lines. Gross profit was ¥17.426bn with a gross margin of 17.1%, pointing to decent spread management despite input cost volatility. Operating income declined 6.4% YoY to ¥7.314bn, reflecting mild negative operating leverage as fixed costs weighed on profitability amid lower volumes/prices. Ordinary income was ¥8.876bn, above operating income by ¥1.562bn, implying meaningful non-operating gains or financial income that cushioned operating softness. Net income rose 4.4% YoY to ¥6.043bn, suggesting a favorable non-operating balance and a normalized tax burden. EPS was ¥41.78, though outstanding shares were not disclosed in the provided XBRL (zero indicates undisclosed, not actual zero). DuPont metrics show a net margin of 5.93%, asset turnover of 0.385x, and financial leverage of 1.22x, resulting in a calculated and reported ROE of 2.78%. The low leverage and modest asset turnover imply a balance sheet–driven conservative profile with room to improve capital efficiency. The company’s liquidity appears exceptionally strong: current assets of ¥159.857bn against current liabilities of ¥29.759bn translate to a current ratio of 537% and a quick ratio of 455%. Total liabilities of ¥49.136bn versus equity of ¥217.392bn imply a debt-to-equity of 0.23x and an inferred equity ratio of approximately 82% (despite a reported 0.0% which reflects non-disclosure). Interest expense was only ¥43m, yielding an interest coverage ratio near 170x, underscoring very low financial risk. The effective tax rate shown as 0.0% is clearly an artifact of missing tagging; using disclosed income tax (¥2.509bn) relative to ordinary income suggests an effective tax rate around the high-20s percent. Cash flow items (OCF/FCF) and depreciation are undisclosed (shown as zero), limiting assessment of cash earnings quality and capex trends. Dividend data (DPS and payout) were not disclosed, preventing direct payout analysis this quarter. Overall, Yodoko demonstrates solid profitability with minimal leverage and exceptional liquidity, though operating leverage is modestly negative and capital efficiency (ROE/asset turnover) remains an area for improvement. Data gaps on cash flows and dividends constrain conclusions on cash conversion, capex intensity, and payout sustainability.

Profitability Analysis

ROE_decomposition: Net margin 5.93% × asset turnover 0.385 × financial leverage 1.22 = ROE 2.78%. ROE is primarily driven by modest profitability and low leverage; weak asset turnover is a drag. margin_quality: Gross margin at 17.1% indicates reasonable spread over raw materials. Operating margin is approximately 7.18% (¥7.314bn / ¥101.876bn). Net margin improved YoY given net income growth despite lower revenue, aided by non-operating gains (ordinary income > operating income by ¥1.562bn). operating_leverage: Revenue declined 3.3% YoY while operating income fell 6.4% YoY, evidencing mild negative operating leverage. Fixed-cost absorption likely pressured operating margin; however, the decline was contained, indicating effective cost control.

Growth Assessment

revenue_sustainability: Revenue of ¥101.876bn (-3.3% YoY) suggests softer demand or price normalization. With asset turnover at 0.385x, growth likely hinges on volume recovery and product mix upgrades rather than balance-sheet expansion. profit_quality: Ordinary income (¥8.876bn) exceeded operating income by ¥1.562bn, implying reliance on non-operating items (e.g., investment income, FX, equity-method gains) to support bottom line. Tax expense of ¥2.509bn implies a normalized effective tax rate near ~28%, corroborating underlying profitability. outlook: In the near term, margin resilience should persist if input costs remain stable and pricing discipline holds. However, operating leverage is limited, so demand softness could disproportionately affect operating profit. Upside depends on stabilization in construction/manufacturing demand and any continued contribution from non-operating gains.

Financial Health

liquidity: Current assets ¥159.857bn vs current liabilities ¥29.759bn; current ratio 537% and quick ratio 455% indicate very strong short-term liquidity. Working capital stands at ¥130.098bn. solvency: Total liabilities ¥49.136bn vs equity ¥217.392bn; debt-to-equity 0.23x. Inferred equity ratio ~82% (217.392/264.419), despite a reported 0.0% due to non-disclosure. Interest coverage ~170x underscores very low refinancing risk. capital_structure: Conservative balance sheet with minimal financial leverage (financial leverage factor 1.22). Capacity exists to fund growth or shareholder returns without stressing solvency metrics.

Cash Flow Quality

earnings_quality: OCF, FCF, and depreciation were undisclosed (reported as zero placeholders). As such, OCF/Net Income of 0.00 is not meaningful and cannot be used to assess earnings quality. FCF_analysis: Free cash flow cannot be computed due to missing OCF/capex information. The sizable working capital base suggests potential cash release if inventories/receivables are managed efficiently, but this cannot be validated without CF data. working_capital: Inventories of ¥24.44bn represent ~15% of current assets and ~82% of current liabilities coverage by quick assets remains ample. Without cash flow statements, we cannot judge period-to-period cash conversion from working capital.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio were undisclosed (zero placeholders). With net income of ¥6.043bn and low leverage, capacity for dividends appears supported in principle, but actual payout behavior cannot be assessed. FCF_coverage: FCF and OCF unavailable; therefore, dividend coverage by FCF cannot be determined for this period. policy_outlook: No dividend policy details were provided. Assessment of sustainability will depend on disclosed payout targets and visibility into cash generation once cash flow data are available.

Risk Assessment

Business Risks:

• End-market demand volatility in construction, housing, and manufacturing impacting volumes/pricing
• Raw material price fluctuations (steel, coatings) affecting spreads
• Competitive pricing pressure in domestic and export markets
• Potential slowdown in capital investment cycles affecting steel-related product demand
• Reliance on non-operating gains to support net income in periods of operating softness

Financial Risks:

• Limited visibility into cash generation due to undisclosed operating cash flow and capex
• Working capital intensity could create cash flow volatility in downturns
• Currency exposure via non-operating items if FX contributes to ordinary income

Key Concerns:

• Modest ROE at 2.78% driven by low asset turnover and conservative leverage
• Negative operating leverage as revenue declined faster than cost reductions
• Data gaps in cash flow and dividend disclosure hinder assessment of cash conversion and payout sustainability

Investment Implications

Key Takeaways:

• Revenue down 3.3% YoY to ¥101.876bn with operating income down 6.4% to ¥7.314bn
• Net income up 4.4% YoY to ¥6.043bn aided by non-operating gains (ordinary income ¥8.876bn)
• Gross margin 17.1% and operating margin ~7.2% show resilient spreads
• ROE 2.78% constrained by low asset turnover (0.385x) and low leverage (1.22x)
• Exceptionally strong liquidity: current ratio 537%, quick ratio 455%, working capital ¥130.1bn
• Very low financial risk: interest expense ¥43m, interest coverage ~170x, D/E 0.23x
• Cash flow and depreciation undisclosed; FCF not assessable this quarter

Metrics to Watch:

• Operating cash flow and capex to gauge cash conversion and FCF sustainability
• Gross-to-operating margin bridge for evidence of cost discipline and pricing power
• Ordinary income components (FX, investment income, equity-method) for durability of non-operating gains
• Inventory and receivables turns to improve asset turnover and ROE
• Order trends in construction/housing-related demand indicators
• Management guidance on dividend policy and payout targets

Relative Positioning: Versus domestic steel and metal product peers, Yodoko exhibits stronger balance-sheet conservatism and liquidity but lags on capital efficiency (low ROE/asset turnover). Profitability is solid for its risk profile, with less earnings volatility due to low leverage, though upside depends on improving operating leverage and enhancing asset utilization.

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