MIURA CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥123.93B
• Operating Income: ¥13.94B
• Net Income: ¥12.15B
• EPS: ¥105.81

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

Miura Co., Ltd. (60050) delivered strong FY2026 Q2 consolidated results under IFRS, with revenue of 1,239.26 (100M JPY), up 11.3% YoY, indicating healthy demand in its industrial boiler and thermal systems domains. Operating income rose 53.5% YoY to 139.42, highlighting pronounced operating leverage as fixed-cost absorption and scale benefits kicked in. Net income surged 66.1% YoY to 122.42, supported by a favorable effective tax rate of 16.7% and contributions from equity-method investees (13.93). The operating margin stands at 11.3% (operating income/revenue), while the reported gross margin is 34.0% and EBITDA margin is 16.6%, pointing to improved profitability across the P&L. There is a presentational nuance under IFRS: gross profit (421.01) and SG&A (333.02) do not arithmetically bridge to operating income without additional operating items; the difference implies meaningful other operating income or classification effects. DuPont analysis indicates a calculated ROE of 5.6% (net margin 9.9%, asset turnover 0.283, financial leverage 2.02x), consistent with the reported ROE, though asset turnover remains modest for a capital goods maker mid-year. The balance sheet is solid with total assets of 4,381.41 and equity of 2,173.08, corresponding to an equity ratio of 49.3%, which provides strategic flexibility. Total liabilities of 2,338.52 translate to a debt-to-equity ratio of 1.08x (using total liabilities as a proxy), a manageable level given the company’s profitability trajectory. Operating cash flow of 84.75 is below net income (OCF/NI of 0.69x), suggesting working capital absorption in the half, which is common during growth phases but warrants monitoring. Free cash flow is deeply negative at -1,116.43, driven by a large investing outflow (-1,201.18) far exceeding capex (-40.32), implying M&A or financial investments rather than maintenance/expansion capex alone. Financing cash flow of +1,213.99 appears to fund these investments, consistent with the stable equity ratio; however, interest-bearing debt detail is unreported. Cash and equivalents stand at 552.51, offering liquidity against near-term needs, though current and quick ratios are not calculable due to unreported current liabilities. The payout ratio is 62.4%, but FCF coverage is -14.61x in this period due to investment activity; dividend sustainability depends on normalization of investing cash flows and improved OCF conversion. Overall, profitability momentum is strong and the balance sheet is resilient, but cash conversion and the nature of the sizable investing flows are key to watch. Data limitations exist for several items (non-operating breakdown, current liabilities, interest expense, R&D), and zeros reflect unreported data rather than actual zeros.

Profitability Analysis

ROE_decomposition: ROE 5.6% = Net margin 9.9% x Asset turnover 0.283 x Financial leverage 2.02x. The net margin expansion alongside leverage stability is the primary driver, while low turnover tempers ROE. margin_quality: Operating margin is 11.3% (139.42/1,239.26). Reported gross margin is 34.0%. EBITDA margin is 16.6% (EBITDA 205.77). IFRS presentation suggests other operating income contributed positively because gross profit (421.01) minus SG&A (333.02) would yield ~88, below reported operating income of 139.42. operating_leverage: Revenue grew 11.3% YoY while operating income rose 53.5% YoY, indicating strong positive operating leverage from fixed-cost absorption and cost discipline. Net income growth of 66.1% further benefited from non-operating items and a 16.7% effective tax rate.

Growth Assessment

revenue_sustainability: Top-line growth of 11.3% YoY is solid for industrial equipment, implying steady domestic replacement demand and overseas expansion. Sustainability hinges on order intake and backlog in boilers, water treatment, and energy-saving solutions. profit_quality: Profit expansion outpaced sales, supported by mix/pricing and cost control. Equity-method income (13.93) contributed meaningfully (~8% of PBT), enhancing bottom line but adding some variability. Effective tax rate at 16.7% boosted net income. outlook: With operating leverage visible and equity-method gains supportive, near-term earnings momentum is favorable. However, low asset turnover (0.283) and weaker OCF conversion suggest the need for improved working capital efficiency to sustain growth quality.

Financial Health

liquidity: Cash and equivalents are 552.51. Current assets total 1,794.26, but current liabilities are unreported; thus current and quick ratios are not calculable. Working capital is cited at 1,794.26, implying a cushion, but this reflects data limitations rather than a computed surplus. solvency: Equity ratio is 49.3% with total equity of 2,173.08 against assets of 4,381.41. Total liabilities are 2,338.52, yielding a liabilities-to-equity ratio of 1.08x. Interest-bearing debt details are unreported; interest coverage cannot be calculated. capital_structure: Financial leverage is 2.02x (Assets/Equity). The sizable positive financing CF (1,213.99) likely increased borrowings to fund investments, yet the equity ratio remains healthy, indicating a balanced structure.

Cash Flow Quality

earnings_quality: OCF/Net income is 0.69x, indicating weaker conversion this period, likely due to working capital investment (accounts receivable 710.61 and inventories 395.73 are sizable). FCF_analysis: Free cash flow is -1,116.43, driven by investing CF of -1,201.18, while capex is only -40.32. The gap suggests M&A or financial asset purchases under IFRS classifications, not merely PP&E expansion. working_capital: Receivables (710.61) and inventories (395.73) are material relative to revenue, consistent with growth and project timing. Payables stand at 238.04. Without prior-period data, the direction of changes is unknown, but the OCF shortfall implies working capital absorption.

Dividend Sustainability

payout_ratio_assessment: The payout ratio is 62.4% based on current earnings, within a typical range for stable Japanese industrials but elevated for a half-year period. FCF_coverage: FCF coverage is -14.61x, indicating dividends are not covered by free cash flow this period due to large investing outflows rather than operating weakness. policy_outlook: Given strong profitability and a robust equity base (49.3% equity ratio), the dividend appears supported by earnings and balance sheet capacity, but sustained coverage depends on normalization of investing cash flows and improved OCF conversion. Actual DPS data is unreported.

Risk Assessment

Business Risks:

• Cyclical demand in industrial boilers and energy solutions tied to capex cycles in manufacturing and services
• Input cost and supply chain volatility affecting margins
• Overseas expansion execution risk, including local service network build-out
• Technology and regulatory shifts in decarbonization and energy efficiency standards
• Dependence on after-sales service utilization and replacement cycles

Financial Risks:

• Working capital absorption depressing OCF versus net income
• Potential increase in leverage to fund sizable investing activities
• Exposure to equity-method investees introducing earnings volatility
• Interest rate and FX risks, with interest coverage and debt profile unreported

Key Concerns:

• OCF/NI of 0.69x below 1.0x indicates near-term cash conversion pressure
• Large investing CF (-1,201.18) relative to capex suggests M&A/financial investments that need to deliver returns
• Limited disclosure on current liabilities and interest-bearing debt constrains assessment of short-term liquidity and solvency buffers

Investment Implications

Key Takeaways:

• Robust topline growth (+11.3% YoY) with outsized operating income growth (+53.5% YoY) evidences strong operating leverage
• Healthy profitability profile: operating margin 11.3%, EBITDA margin 16.6%, net margin 9.9%
• ROE at 5.6% constrained by low asset turnover (0.283); profitability is the main ROE driver
• Solid balance sheet with 49.3% equity ratio despite funding sizable investments
• Cash conversion soft (OCF/NI 0.69x) and FCF negative due to investment outlays; financing inflows bridge the gap
• Equity-method income (13.93) is a notable contributor (~8% of PBT), adding both support and variability

Metrics to Watch:

• Order intake and backlog in core boilers and service businesses
• Working capital efficiency: receivable days, inventory turns, payables days
• OCF/NI ratio and free cash flow trend
• Nature and returns of investing CF (M&A vs. financial assets) and subsequent integration performance
• Leverage and interest coverage once interest-bearing debt detail is disclosed
• Gross-to-operating income bridge (other operating income) under IFRS presentation
• Equity-method contribution and volatility
• Effective tax rate sustainability

Relative Positioning: Within Japanese industrial equipment peers, Miura exhibits above-peer near-term operating leverage and margin improvement with a conservative equity ratio, but currently trails best-in-class cash conversion due to working capital and significant investment outflows.

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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