ALMETAX MANUFACTURING CO,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥3.96B
• Operating Income: ¥-55M
• Net Income: ¥49M
• EPS: ¥4.75

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend 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

Almetax Co., Ltd. (5928) posted FY2026 Q2 standalone results marked by softer topline and weak core profitability but a return to positive bottom line supported by non-operating gains. Revenue was ¥3.955bn, down 7.0% YoY, reflecting demand softness and/or pricing pressure in its end markets. Gross profit was ¥659.9m, implying a gross margin of 16.7%, which appears compressed for a fabricated metals/building materials maker given input cost volatility. Operating income was a loss of ¥55m (roughly flat YoY per disclosure), indicating that SG&A of about ¥715m exceeded gross profit. Ordinary income improved to a positive ¥64m, implying approximately ¥119m in net non-operating gains offsetting the operating loss. Net income was ¥49m (+277.7% YoY), aided by non-operating items and a modest tax burden. EPS was ¥4.75 on the standalone basis provided. The DuPont bridge shows a thin net margin of 1.24%, asset turnover of 0.337x, and financial leverage of 1.27x, yielding an ROE of 0.53%, which is low but positive. Cash conversion was weak: operating cash flow (OCF) was -¥63.6m versus net income of ¥49m, giving an OCF/NI ratio of -1.30, suggesting working capital outflows or earnings quality concerns. Liquidity remains very strong with current assets of ¥5.389bn versus current liabilities of ¥1.135bn (current ratio ~475%), and working capital of ¥4.254bn. The balance sheet is conservative: total equity is ¥9.282bn against total assets of ¥11.745bn; while the equity ratio was shown as 0.0% (undisclosed), the recalculated equity ratio is approximately 79%, implying low leverage (financial leverage 1.27x). EBITDA was ¥10.5m (0.3% margin), highlighting limited operating cushion and high operating leverage to volumes/margins. Interest expense was not disclosed (shown as zero), and cash/equivalents and capex details were not reported, limiting cash flow depth analysis. Dividend per share was shown as ¥0.00 and payout ratio 0.0%, which likely reflect non-disclosure rather than actual payments, so dividend conclusions should be cautious. Overall, the quarter shows revenue contraction, a core operating loss, reliance on non-operating gains to deliver net profit, and negative OCF, but a robust equity base and ample liquidity mitigate near-term financial risk. The outlook hinges on restoring operating profitability in 2H, stabilizing gross margin, and normalizing working capital to convert earnings into cash.

Profitability Analysis

ROE_decomposition: ROE 0.53% = Net profit margin 1.24% × Asset turnover 0.337 × Financial leverage 1.27. The primary drag is the slim net margin, with asset turnover consistent with a capital-intensive manufacturing business and leverage restrained by a strong equity base. margin_quality: Gross margin at 16.7% (GP ¥659.9m on sales ¥3.955bn) is modest and likely pressured by raw material/energy costs or pricing. Operating margin was -1.4% (OI -¥55m), implying SG&A roughly ¥715m (18.1% of sales), which overwhelmed gross profit. Net margin at 1.24% was supported by non-operating income (¥119m), not core operations. operating_leverage: EBITDA of ¥10.5m (0.3% margin) indicates very limited buffer; small volume or price changes can swing operating income. The negative operating income despite positive gross profit points to high fixed cost intensity in SG&A and production overheads.

Growth Assessment

revenue_sustainability: Sales declined 7.0% YoY to ¥3.955bn, indicating weaker demand or pricing. Without segment disclosure, sustainability is uncertain; recovery requires either volume pickup (construction-related demand, industrial orders) or pricing improvement. profit_quality: Net income of ¥49m resulted mainly from non-operating items as operating income was -¥55m. The OCF/NI ratio of -1.30 suggests earnings did not translate into cash, pointing to working capital drag or accrual-driven profit. EBITDA margin at 0.3% underscores fragile profit quality. outlook: To regain sustainable growth, the company must lift gross margin (e.g., through price pass-through and mix) and reduce SG&A intensity, while normalizing receivables/inventories to restore cash conversion. Absent these, growth in reported earnings may remain reliant on non-operating gains.

Financial Health

liquidity: Current assets ¥5,388.5m vs current liabilities ¥1,134.6m yields a current ratio of ~475% and a quick ratio of ~457% (inventory only ¥206.0m), indicating strong short-term liquidity. solvency: Total equity ¥9,282.0m versus total assets ¥11,745.0m implies an equity ratio ~79% (reported equity ratio 0.0% appears undisclosed). Financial leverage of 1.27x is low, reducing insolvency risk. capital_structure: Debt-to-equity was shown as 0.22x, but interest-bearing debt was not separately disclosed and interest expense was shown as zero (likely undisclosed). Overall leverage appears modest given the large equity base.

Cash Flow Quality

earnings_quality: OCF was -¥63.6m against net income of ¥49.0m (OCF/NI -1.30), indicating poor cash conversion and potential working capital expansion or timing effects. EBITDA is only ¥10.5m, so accruals and non-operating gains are material drivers of net income. FCF_analysis: Investing cash flow was shown as ¥0 (undisclosed), so capex is not available; consequently, free cash flow cannot be reliably computed. Using OCF alone, pre-capex cash flow is negative, implying that true FCF was likely negative if any capex was undertaken. working_capital: Working capital is sizable at ¥4.254bn, with inventories modest at ¥206.0m, suggesting receivables or other current assets likely drove the OCF shortfall. Monitoring collection cycles and payables management will be key to improving OCF.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are shown as 0.00 and 0.0% respectively, which likely reflect non-disclosure rather than actual policy or payments. With EPS at ¥4.75 for the period, any payout assessment would be speculative without confirmed dividends. FCF_coverage: Given negative OCF and undisclosed capex, FCF coverage of dividends cannot be assessed. Pre-capex cash generation was negative, which would constrain dividend capacity near-term absent balance sheet draw or improvement in OCF. policy_outlook: With a strong equity base but weak operating earnings and cash conversion in the period, a conservative or variable dividend stance would be consistent; clarity depends on full-year guidance and historical payout practices (not provided).

Risk Assessment

Business Risks:

• End-market cyclicality in construction and industrial demand impacting volumes and pricing
• Raw material (aluminum) and energy cost volatility affecting gross margins
• Limited pricing power versus large customers and competitive pressures
• Operational leverage from fixed costs leading to profit sensitivity to volumes
• Supply chain disruptions or logistics cost spikes
• Product mix shifts and potential project delays in building-related businesses

Financial Risks:

• Weak cash conversion (OCF/NI -1.30) and potential working capital swings
• Reliance on non-operating gains to offset operating losses
• Potential hidden leverage if interest-bearing debt is present but not disclosed
• Exposure to input price/FX fluctuations if materials are imported
• Earnings volatility given thin EBITDA margin (0.3%)

Key Concerns:

• Operating loss despite positive gross profit, signaling high SG&A burden
• Negative OCF in the period despite positive net income
• Dependence on non-operating income to achieve profitability
• Lack of visibility on capex and cash/cash equivalents due to non-disclosure

Investment Implications

Key Takeaways:

• Topline declined 7.0% YoY to ¥3.955bn, indicating demand/pricing softness.
• Core profitability is weak: operating income -¥55m; EBITDA margin 0.3%.
• Net profit ¥49m was achieved via non-operating gains (~¥119m), not operations.
• Cash conversion is poor with OCF -¥63.6m versus NI ¥49.0m (OCF/NI -1.30).
• Balance sheet strength is a mitigant: equity ratio ~79%, low financial leverage (1.27x).
• Liquidity is ample: current ratio ~475%, quick ratio ~457%, working capital ¥4.254bn.
• Data gaps (cash, capex, dividends) limit precision of FCF and payout analysis.

Metrics to Watch:

• Gross margin trajectory (target >18% to rebuild operating margin)
• SG&A ratio to sales (reduce toward mid-teens to achieve break-even OI)
• Operating income in 2H (return to positive territory)
• Operating cash flow and working capital days (receivables, inventory, payables)
• Non-operating income sustainability and composition
• Capex levels and maintenance vs. growth split (upon disclosure)

Relative Positioning: Within Japanese building materials and fabricated metals peers, Almetax exhibits a stronger-than-average equity cushion and liquidity but weaker current operating profitability and cash conversion; near-term performance is more sensitive to margin recovery and demand stabilization.

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
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