KOMAIHALTEC Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥15.79B
• Operating Income: ¥106M
• Net Income: ¥-147M
• EPS: ¥38.74

Income Statement

Balance Sheet

Cash Flow Statement

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

Komai Haltec (5915) reported FY2026 Q2 consolidated results under JGAAP showing a sharp top-line contraction but a notable turnaround at the operating level. Revenue declined 26.9% YoY to ¥15.79bn, indicative of softer order execution or project timing effects common in the steel fabrication/bridge and plant engineering space. Despite the revenue drop, operating income improved to ¥0.11bn (+260.2% YoY), suggesting mix improvements, cost control, or recognition timing on higher-margin projects. Ordinary income reached ¥0.28bn, aided by net non-operating gains more than offsetting ¥0.09bn of interest expense. Net income was ¥0.18bn (EPS ¥38.74), down 85.9% YoY, pointing to either a very strong prior-year one-off or this year’s recognition of special losses; the gap versus ordinary income implies extraordinary items and a normalized tax burden. While several line items such as cost of sales and gross profit were unreported, EBITDA was ¥0.54bn (3.4% margin), highlighting still-thin underlying profitability. Operating cash flow was solid at ¥2.94bn, far exceeding net income (OCF/NI 16.25x), likely reflecting working capital release typical of mid-year project cash collections. The balance sheet appears sound with total assets of ¥63.82bn and total equity of ¥32.94bn; this implies an equity ratio of roughly 51.6% (despite the reported 0.0% placeholder), and a debt-to-equity ratio of 1.14x suggests moderate leverage for a project-based manufacturer. Liquidity is ample with current assets of ¥43.86bn versus current liabilities of ¥19.91bn, yielding a current ratio of 220%, supported by robust working capital of ¥23.95bn. Interest coverage on an EBIT basis is narrow at 1.2x, underscoring sensitivity to margin shortfalls during execution phases. The DuPont bridge indicates a low net margin of 1.15%, low asset turnover of 0.247, and financial leverage of 1.94x, combining to a modest ROE of 0.55%. Dividend distribution was not indicated (DPS ¥0, payout 0%), which is consistent with a conservative stance given margin volatility and capital needs. Data limitations exist: cost of sales, gross profit, inventories, cash balances, and some cash flow details were not disclosed in this XBRL snapshot; therefore, margin and cash conversion commentary relies on the available non-zero items and calculated metrics. Overall, the half shows improved operating performance despite revenue headwinds, strong cash generation, and a solid balance sheet, but profitability remains thin and execution risk persists. Outlook hinges on order backlog quality, steel input cost pass-through, and stable project delivery into H2.

Profitability Analysis

ROE at 0.55% reflects a combination of a 1.15% net profit margin, low asset turnover of 0.247, and financial leverage of 1.94x. The low margin is the primary bottleneck, typical for steel fabrication/bridge construction where pricing power is limited and execution discipline is critical. Operating income of ¥0.11bn on ¥15.79bn of revenue implies an operating margin of roughly 0.7%, highlighting thin operating leverage; small cost variances can swing earnings materially. EBITDA of ¥0.54bn (3.4% margin) shows that non-cash charges (¥0.43bn D&A) are meaningful relative to EBIT, but still leaves a modest cash earnings buffer. Ordinary income of ¥0.28bn exceeds operating income by ¥0.18bn, indicating positive net non-operating items that offset ¥0.09bn interest expense; reliance on non-operating gains is not a durable profitability driver. With revenue down 26.9% YoY yet operating income up 260.2% YoY, mix and cost control likely improved; however, lack of reported cost of sales/gross profit limits margin quality verification. Interest coverage on EBIT is 1.2x, leaving limited room for execution slippage; on EBITDA, the implied coverage would be more comfortable, but lenders and covenants often reference EBIT. Overall profitability remains fragile, with upside dependent on backlog conversion at target margins and inflation pass-through.

Growth Assessment

Revenue declined 26.9% YoY to ¥15.79bn, reflective of project timing, slower public works/civil orders, or deliberate selection of higher-margin work. Operating income growth (+260.2% YoY) against falling revenue suggests better project mix and tighter cost control, but sustainability is uncertain without visibility into backlog and gross margin. Net income fell 85.9% YoY to ¥0.18bn, implying a tough comparison period last year or current-year extraordinary charges; the ordinary-to-net gap supports this. Asset turnover at 0.247 is subdued, consistent with a working-capital-intensive, milestone-based recognition model; a reacceleration in execution in H2 could improve this. EBITDA margin at 3.4% is low for durable growth; scaling margins will likely require stable pricing, efficient site management, and lower rework/logistics costs. Given the strong OCF, the company appears to be collecting cash effectively, but this may reflect timing rather than structural growth. Outlook hinges on public sector infrastructure demand, private nonresidential capex cycles, and steel price normalization; stable input costs should aid bid discipline and margin capture. Without disclosed order backlog and guidance, we assume near-term growth will be driven by conversion of existing projects rather than new-win volume expansion.

Financial Health

Total assets are ¥63.82bn and total equity ¥32.94bn, implying an equity ratio of roughly 51.6% (computed), a solid capitalization despite the 0.0% placeholder reported. Debt-to-equity is 1.14x, indicating moderate leverage for the sector. Current assets of ¥43.86bn versus current liabilities of ¥19.91bn yield a current ratio of 220% and working capital of ¥23.95bn, providing strong liquidity. The quick ratio equals the current ratio due to unreported inventories; thus, liquidity quality cannot be fully assessed, though the headline buffer is ample. Interest expense is ¥0.09bn and EBIT is ¥0.11bn, so EBIT interest coverage is 1.2x, which is thin; this is a key solvency watchpoint should margins compress. The computed financial leverage in DuPont (assets/equity) is 1.94x, consistent with a balanced capital structure. Absence of disclosed cash and equivalents limits precise liquidity assessment, but robust OCF suggests satisfactory near-term funding capacity.

Cash Flow Quality

Operating cash flow of ¥2.94bn far exceeds net income of ¥0.18bn (OCF/NI 16.25x), indicating strong cash conversion in the half, likely from collection of receivables and milestone billings rather than solely earnings quality. D&A of ¥0.43bn and EBITDA of ¥0.54bn imply that non-cash charges are significant contributors to closing the gap between EBIT and OCF alongside working capital movements. Investing cash flow is unreported (shown as 0), so true free cash flow cannot be precisely computed; using only available data would overstate FCF. On a directional basis, OCF appears strong enough to fund typical maintenance capex and interest, with surplus for debt reduction or selective growth capex, but confirmation requires capex disclosure. Working capital dynamics are critical in this business; the large working capital base (¥23.95bn) can drive volatile OCF quarter to quarter. Overall, earnings quality appears acceptable for the period given positive OCF and modest EBIT, but sustainability depends on continued disciplined project execution and collection.

Dividend Sustainability

DPS is reported as ¥0 with a 0% payout ratio; policy details and interim dividend status are not disclosed here. With net income of ¥0.18bn and strong OCF of ¥2.94bn, dividend capacity exists in principle, but management may prioritize balance sheet resilience, backlog execution, and potential capex over distributions given margin thinness and interest coverage constraints. FCF coverage metrics are not meaningful here because investing cash flow and capex are undisclosed; the provided 0.00x FCF coverage reflects missing data rather than lack of capacity. Sustainability of any future dividends would hinge on achieving higher operating margins, stable OCF after working capital, and maintaining a comfortable interest coverage. Absent policy disclosure, we assume a conservative stance on payouts in the near term.

Risk Assessment

Business Risks:

• Project execution risk on fixed-price or long-duration contracts leading to margin erosion
• Input cost volatility (steel and logistics) and timing of pass-through to customers
• Order backlog visibility and timing risk, including public-sector budget cycles
• Labor availability and subcontractor capacity constraints
• Concentration in large projects increasing revenue and cash flow lumpiness
• Regulatory and safety compliance for infrastructure projects

Financial Risks:

• Thin EBIT interest coverage at 1.2x increases sensitivity to margin shortfalls
• Working-capital intensity may cause OCF volatility despite positive H1 cash generation
• Moderate leverage (D/E 1.14x) could limit flexibility if earnings weaken
• Potential for extraordinary items to swing net income relative to ordinary income
• Limited disclosed cash balance in this snapshot constrains liquidity transparency

Key Concerns:

• Sustainability of improved operating income amid 26.9% revenue decline
• Low EBITDA margin (3.4%) and overall net margin (1.15%)
• Dependence on non-operating gains to lift ordinary income above operating income
• Execution discipline and cost control needed to maintain coverage and ROE

Investment Implications

Key Takeaways:

• Operating income improved 260.2% YoY to ¥0.11bn despite a 26.9% YoY revenue decline to ¥15.79bn
• Ordinary income (¥0.28bn) exceeded operating income due to net non-operating gains; interest expense was ¥0.09bn
• Net income fell 85.9% YoY to ¥0.18bn, indicating non-recurring factors or extraordinary items
• EBITDA margin remained low at 3.4%, and EBIT interest coverage was thin at 1.2x
• Operating cash flow was strong at ¥2.94bn, with OCF/NI of 16.25x, likely aided by working capital release
• Balance sheet appears solid with an inferred equity ratio of ~51.6% and current ratio of 220%

Metrics to Watch:

• Order backlog and book-to-bill ratio
• Gross margin and operating margin progression as cost of sales data becomes available
• Steel input prices and pass-through effectiveness
• Working capital turnover (receivables and advances), OCF sustainability
• Interest coverage (EBIT-based) and net debt trajectory
• Capex levels and investing cash flows to assess true FCF

Relative Positioning: Within Japan’s steel fabrication/bridge and plant construction peers, Komai Haltec exhibits a solid balance sheet and healthy liquidity but operates with thin margins and low asset turnover; near-term performance hinges on disciplined project execution and stable input costs.

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