| Indicator | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥11817.2B | ¥9987.8B | +18.3% |
| Operating Income | ¥768.6B | ¥573.6B | +34.0% |
| Profit Before Tax | ¥636.9B | ¥430.3B | +48.0% |
| Net Income | ¥474.4B | ¥329.3B | +44.1% |
| ROE | 12.3% | 10.3% | - |
For the fiscal year ended March 2026, UACJ reported Revenue of ¥11,817B (YoY +¥1,829B, +18.3%), Operating Income of ¥769B (YoY +¥195B, +34.0%), Ordinary Income of ¥106B (YoY +¥17B, +19.0%), and Net Income attributable to owners of the parent of ¥389B (YoY +¥109B, +39.0%), marking year-over-year increases in both top and bottom lines. Gross margin was 13.4% (prior year 13.3%), and Operating Margin improved to 6.5% (prior year 5.7%, +0.8pt), indicating enhanced profitability. Basic EPS rose materially to ¥214.75 (prior year ¥146.49, +46.6%), showing notable per-share earnings growth. The 28-point gap between Ordinary Income and Net Income was mainly due to the level of Profit Before Tax, with financial expense of ¥159B weighing on income at the ordinary level. Operating Cash Flow was ¥640B (YoY +602.1%), demonstrating cash generation of 1.4x Net Income, and Comprehensive Income of ¥740B strengthened equity due to accumulated foreign currency translation adjustments.
[Revenue] Revenue reached ¥11,817B (+18.3%), a substantial increase. As the company operates a single segment (Aluminum Products Business), there is no quantitative disclosure by region or product, but management commentary suggests that inventory build-up (Inventories +¥509B, +20.9%) and higher trade receivables (+¥156B, +8.3%) indicate volume and utilization expansion drove sales. FX tailwinds (foreign currency translation adjustment +¥248B) likely contributed to revenue growth. Gross profit was ¥1,583B (+¥258B, +19.5%), and the gross profit increase outpacing revenue growth reflects price/mix improvement and cost control.
[Profitability] Operating Income was ¥769B (+34.0%), far outpacing revenue growth and reflecting operating leverage. SG&A totaled ¥856B (+10.0%), growing less than revenue and contributing to an SG&A ratio improvement to 7.2% (prior year 7.8%, -0.6pt). After securing ¥195B of operating-level profit improvement, financial income increased by ¥1.3B to ¥27B, but financial expense of ¥159B (up ¥0.2B) weighed heavily, leaving Ordinary Income at ¥106B (+19.0%). The main driver of financial expense was interest paid of ¥106B, with short-term borrowings increase to ¥2,192B (+49%) creating interest drag. Net other income was +¥20B (Other income ¥136B vs Other expense ¥116B), worsening YoY but offset by strong operating gains. Profit Before Tax expanded to ¥637B (+48.0%), and after Corporate Taxes of ¥162B (effective tax rate 25.5%, vs 23.5% prior, +2.0pt), Net Income was ¥474B (+44.1%), with Net Income attributable to owners of the parent ¥389B (+39.0%). In summary, strong revenue growth and SG&A discipline drove sizable operating profit gains, though financial expenses constrained Ordinary Income growth; after higher tax burden, the company still achieved robust YoY profit increases.
[Profitability] Operating Margin improved to 6.5% (prior year 5.7%, +0.8pt) and Net Margin improved to 4.0% (prior year 3.3%, +0.7pt), indicating expansion of core margins. ROE rose sharply to 12.2% (prior year 9.9%, +2.3pt), showing material improvement in capital efficiency. DuPont decomposition shows ROE improvement driven primarily by Net Margin expansion, modest increase in Total Asset Turnover to 1.05x (prior year 1.03x), and a decline in Financial Leverage to 2.91x (prior year 3.03x, -0.12x). Gross margin of 13.4% reflects the capital-intensive, low-gross-margin nature of the industry; the slight YoY increase of +0.1pt indicates successful price pass-through and mix improvement.
[Cash Quality] Operating Cash Flow was ¥640B, 1.35x Net Income ¥474B, and Operating CF/EBITDA was approximately 0.55x (EBITDA ~¥1,169B = Operating Income ¥769B + D&A ¥400B). Inventory increases temporarily depressed this ratio, but fundamental cash generation remains intact. Operating CF subtotal (before working capital changes) was ¥764B, 1.61x Net Income, indicating strong cash generation from core operations including add-backs of non-cash expenses. Working capital absorbed cash through inventory increase (▲¥386B) and receivables increase (▲¥60B), partly offset by accounts payable increase (+¥130B), leaving net working capital outflow at ▲¥327B. Free Cash Flow was limited at ¥45B (Operating CF ¥640B - Investing CF ¥595B); CapEx ¥557B vs D&A ¥400B leaves a gap of ¥157B directed to growth/expansion investment.
[Investment Efficiency] Total Asset Turnover was 1.05x (Revenue ¥11,817B / average total assets ~¥11,095B), slightly up from 1.03x, maintaining efficiency despite inventory increases. Working capital efficiency shows Days Sales Outstanding ~63 days (Trade receivables ¥2,030B / daily sales ¥32.4B) and Inventory Days ~105 days (Inventories ¥2,950B / daily COGS ¥28.0B), indicating heavy inventory holdings and room for improvement. PPE (Property, Plant & Equipment) was ¥4,228B, representing 37.7% of total assets, reflecting high capital intensity. CapEx/D&A ratio was 1.39x (¥557B / ¥400B), indicating investment significantly above replacement level.
[Financial Health] Equity Ratio improved to 30.9% (prior year 30.0%, +0.9pt), supported by Comprehensive Income accumulation of ¥740B. Current Ratio was ~1.23x (Current assets ¥5,971B / Current liabilities ¥4,857B), indicating a reasonable liquidity buffer. Interest-bearing debt increased to Short-term borrowings ¥2,192B + Long-term borrowings ¥1,695B = ¥3,887B (prior year ¥3,408B, +14.1%). Debt/Equity was 1.01x (prior year 1.07x, -0.06pt), keeping leverage elevated but broadly stable. However, short-term borrowings accounted for 56.4% of interest-bearing debt, evidencing shortening maturity profile. Interest coverage was ~7.3x (Operating Income ¥769B / interest paid ¥106B), indicating adequate ability to cover interest, but higher short-term debt dependency raises refinance and rate-rise risk. Cash & cash equivalents rose materially to ¥584B (prior year ¥263B, +122%), improving liquidity, but cash-to-short-term borrowings ratio remained ~0.27x, insufficient to fully cover short-term debt.
Operating Cash Flow expanded to ¥640B (prior year ¥91B, +602.1%), yielding an Operating CF / Net Income ratio of 1.35x and demonstrating strong cash generation. Operating CF subtotal (before working capital changes) was ¥764B, with Profit Before Tax ¥637B plus D&A ¥400B and other non-cash additions indicating robust core cash generation. Working capital changes were dominated by inventory build-up (▲¥386B) and trade receivables increase (▲¥60B), partially offset by trade payables increase (+¥130B), resulting in net working capital outflow of ▲¥327B. After interest paid ¥106B and corporate tax paid ¥36B, final Operating CF totaled ¥640B. Investing CF was ▲¥595B (prior year ▲¥369B, -61.5%), driven mainly by acquisition of tangible fixed assets ¥557B (prior year ¥375B, +48.5%). Intangible asset additions were ¥19B (prior year ¥9B). The majority of investments funded capacity expansion and efficiency improvements. Consequently, Free Cash Flow was ¥45B (Operating CF ¥640B - Investing CF ¥595B), limited in size, and dividend payments ¥72B and share repurchases ¥0.1B could not be fully covered by internal funds, necessitating external financing. Financing CF was +¥254B (prior year +¥125B, +103.6%), with net increase in short-term borrowings ¥226B (prior year ¥59B) and net increase in commercial paper ¥250B as principal funding sources. Cash inflow from long-term borrowings was ¥406B vs repayments ¥442B, yielding a net long-term borrowings decrease of ▲¥36B and a noted shift toward shorter-term funding. Debt associated with receivables securitization was ▲¥88B, and net other financial liabilities (receipts ¥1,124B - payments ¥1,067B) contributed +¥57B. Dividends to owners of the parent ¥72B and to non-controlling interests ¥21B were paid; share buyback was minor at ¥0.1B. FX translation effects contributed +¥22B, resulting in Cash & cash equivalents increasing from ¥263B at the beginning of the period to ¥584B (+¥321B). Overall, strong Operating CF improved cash quality, but inventory build-up and large CapEx limited internal self-sufficiency, increasing reliance on short-term borrowings and constraining financial flexibility.
From a quality-of-earnings perspective, there is a significant divergence between Operating Income ¥769B and Ordinary Income ¥106B, with financial expense ¥159B compressing earnings at the ordinary level. The core of financial expense is interest paid ¥106B; implied effective interest rate on interest-bearing debt of ¥3,887B is estimated at ~2.7%, and increased reliance on short-term borrowings has normalized interest burden. Among non-operating income, Other income ¥136B (prior year ¥48B) increased substantially; its composition is unclear and may include one-off items. Conversely, Other expense ¥116B (prior year ¥37B) also rose, leaving a net deterioration of +¥20B YoY. Equity-method investment income/loss was ¥21B (prior year ¥17B), remaining a stable source of recurring income. Of the ¥637B Profit Before Tax and ¥474B Net Income, Corporate Taxes ¥162B (effective tax rate 25.5%) account for the bulk of the ¥163B difference; the effective tax rate rose +2.0pt from the prior year. The difference between Comprehensive Income ¥740B and Net Income ¥474B is ¥266B, driven by Other Comprehensive Income components: foreign currency translation adjustment ¥248B, changes in fair value of financial assets ¥21B, cash flow hedge valuation change ▲¥15B, OCI of equity-method affiliates ¥11B, and remeasurements of defined benefit plans ¥0.5B. The large increase in foreign currency translation adjustments reflects FX tailwinds but could reduce equity in a reversal. Regarding Operating CF quality, Operating CF ¥640B vs Operating CF subtotal ¥764B indicates working capital absorption of ▲¥124B (inventory + receivables increase - payables increase), highlighting room to improve working capital management. On an accruals basis, Net Income ¥474B - Operating CF ¥640B = ▲¥166B, reflecting negative accruals and indicating cash-backed profit generation. Overall, core business earnings quality is high, but structural financial expense burden and working capital expansion constrain earnings quality at the ordinary-stage and cash-conversion; improvements are required.
Full Year guidance is Revenue ¥13,000B (progression vs current period ¥11,817B = 90.9%), Operating Income ¥640B (progression 120.1%), and Net Income attributable to owners of the parent ¥280B (progression 138.9%). Operating Income outperformed plan by +20.1%, and Net Income exceeded plan by +38.9%, reflecting results above a conservative plan. The company explained variance between consolidated forecasts and actuals in the announcement published today (2026-05-14) titled "Notice Concerning Differences Between Consolidated Forecasts and Results and Dividends of Surplus (Dividend Increase)". The prior-year comparative plan had forecast Operating Income decline of ▲16.7% YoY, but actuals showed +34.0% increase, primarily driven by recovery in utilization and SG&A control leading to margin improvement. Net Income also surpassed a plan of ▲28.0% YoY decline to deliver +39.0% YoY increase, absorbing higher tax burden. Management cautions in disclosure materials that forward-looking statements are based on certain assumptions and actual results may differ materially due to economic conditions, and resolving structural issues of inventory and borrowing dependence will be key to sustainable growth.
Dividends comprise an interim dividend of ¥80 (pre-split equivalent) and a year-end dividend of ¥35 (post-split). A 4-for-1 stock split was conducted effective October 1, 2025, so the year-end dividend in pre-split terms is ¥140, giving an annual dividend total of ¥220 (pre-split equivalent). Prior fiscal year annual dividend was ¥140 (pre-split), so this represents a substantive increase of ¥80 in pre-split terms. With Net Income attributable to owners of the parent ¥389B, outstanding shares after treasury stock deduction ~181M shares, and outstanding shares at the record date for year-end dividend (post-split) ~724M shares, the dividend payout ratio is calculated as annual dividends total ~¥70B / Net Income ¥389B = ~18.0%; the company-reported payout ratio of 25.6% is presumed calculated against split-adjusted EPS. The disclosed payout ratio of 25.6% indicates dividend sustainability while balancing retained earnings and growth investment. Share buybacks were minor at ¥0.1B, with shareholder returns centering on dividends. Total Return Ratio is approximately the same as the payout ratio at ~25.6%. Free Cash Flow ¥45B vs total dividends ~¥70B (¥72B to owners of the parent + ¥21B to non-controlling interests) yields an FCF coverage ratio of ~0.64x, indicating dividends are not fully covered by FCF and some portion is supplemented by borrowing. The company announced today in the "Notice Concerning Dividends of Surplus (Dividend Increase)" that the year-end dividend was raised from ¥25 to ¥35, reflecting management’s willingness to return upside to shareholders. DOE (Dividends on Equity) is estimated at total dividends ¥70B / year-end shareholders’ equity ~¥3,470B = ~2.0%, indicating a moderate balance between capital efficiency and returns.
Working capital expansion and short-term debt dependence risk: Inventories accumulated to ¥2,950B (YoY +21%), with Inventory Days of 105 days indicating heavy stock levels. Alongside inventory valuation decline/obsolescence risk, short-term borrowings surged to ¥2,192B (+49%) and account for 56% of interest-bearing debt. Refinance and interest-rate risks are elevated, making correction of short-term borrowing dependence urgent. Though Interest Coverage is ~7.3x, failure to roll short-term debt or rapid rate hikes could materialize liquidity stress.
FX volatility and equity fluctuation risk: Foreign currency translation adjustment of +¥248B materially boosted Comprehensive Income and equity, but FX reversal could reduce equity. Of the other components of equity totaling ¥687B (prior year ¥447B, +54%), roughly ¥659B is foreign currency translation adjustment. A reversal in exchange rates could impair the Equity Ratio and financial stability. Exchange-rate movements also affect revenues and margins, highlighting the importance of effective hedging.
Business cycle fluctuations and utilization risk: The Aluminum Products Business is sensitive to demand cycles in automotive, industrial, and building materials; economic slowdown or customer inventory corrections could depress utilization. Given high fixed-cost burden (D&A ¥400B, PPE ¥4,228B), lower utilization raises the breakeven point and can rapidly deteriorate margins. This period maintained utilization via inventory build-up; if demand is not sustained, inventory excess and impairment risk could surface.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| ROE | 12.2% | 6.3% (3.2%–9.9%) | +5.9pt |
| Operating Margin | 6.5% | 7.8% (4.6%–12.3%) | -1.2pt |
| Net Margin | 4.0% | 5.2% (2.3%–8.2%) | -1.2pt |
ROE of 12.2% substantially exceeds the manufacturing median of 6.3%, placing the company among the top performers in capital efficiency. Operating Margin 6.5% and Net Margin 4.0% are slightly below medians, with heavy financial expense burden and capital intensity suppressing margins.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 18.3% | 3.7% (-0.4%–9.3%) | +14.6pt |
Revenue growth of 18.3% far exceeds the manufacturing median 3.7%, highlighting standout growth driven by higher utilization and demand recovery.
※Source: Company compilation
Operating profitability improvement and capital efficiency gains: Operating Margin 6.5% (+0.8pt) and ROE 12.2% (+2.3pt) reflect core business improvement driven by SG&A control and utilization recovery. Operating CF ¥640B is 1.35x Net Income, underscoring high-quality cash generation. Outperformance vs guidance (Operating Income +20%, Net Income +39%) suggests conservative planning and strong execution. Expected outcomes from CapEx ¥557B (CapEx/D&A 1.39x) include yield improvements, higher utilization, further gross margin improvement, and better inventory turnover.
Structural issues in working capital and short-term debt: Inventory Days 105 and Receivables Days 63 indicate working capital pressure, with Free Cash Flow ¥45B and dividends ¥72B bridged by short-term borrowings (+¥226B). Short-term borrowings comprise 56% of interest-bearing debt, making refinancing and rate-rise risks salient. While Interest Coverage ~7.3x is in a safe range, inability to refinance or rapid rate hikes raise liquidity stress risks. Going forward, inventory reduction and refinancing toward long-term debt are key to improving financial stability.
FX and Comprehensive Income volatility: Foreign currency translation adjustment +¥248B boosted Comprehensive Income ¥740B and improved Equity Ratio to 30.9%, but a reversal in FX would reduce equity. About 96% of the ¥687B other equity components are translation adjustments, showing high sensitivity of equity to exchange rates. Dividend sustainability is supported by payout ratio 25.6%, but FCF coverage 0.64x and limited internal funding capacity mean inventory turnover improvement and smoothing CapEx are prerequisites for sustainable returns.
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by the firm from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.