Jibannet Holdings Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥1.54B
• Operating Income: ¥6M
• Net Income: ¥6M
• EPS: ¥-0.75

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

Geotechnical Network Holdings (6072) delivered strong top-line momentum in FY2026 Q2 with revenue of ¥1.538bn, up 72.6% YoY, but profitability remains thin and bottom-line turned negative. Gross profit was ¥400m, corresponding to a reported gross margin of 26.0%, indicating tight pricing power and/or higher input/subcontracting costs despite the sales surge. Operating income was ¥6m (down 14.5% YoY), implying an operating margin of roughly 0.4%, signaling that SG&A growth offset scale benefits. Ordinary income of ¥4m deteriorated to a net loss of ¥16m (EPS -¥0.75), reflecting below-the-line items and taxes. EBITDA was ¥22.97m and the EBITDA margin just 1.5%, underscoring limited operating leverage captured so far. Despite the net loss, operating cash flow was positive at ¥81.05m, with an OCF/Net Income ratio of -5.07, suggesting strong non-cash add-backs and/or favorable working capital movements in the quarter. Working capital looks ample: current assets of ¥1.388bn vs. current liabilities of ¥289m yield a current ratio of 479.7% and working capital of ¥1.099bn. Total liabilities were ¥291m and total equity ¥1.224bn, resulting in a reported debt-to-equity ratio of 0.24x, indicating conservative financial leverage. Based on total assets of ¥2.004bn and equity of ¥1.224bn, an indicative equity ratio would be approximately 61%, though the disclosed equity ratio field shows 0.0% (treated as undisclosed); we therefore rely on the underlying balances for inference. Interest expense was modest at ¥0.24m, with an EBIT-based coverage of about 24.8x, reflecting minimal financial risk from borrowing costs at present levels. Cash and equivalents are shown as 0 (undisclosed), so end-period liquidity must be inferred from current assets and the current ratio rather than cash balance. The combination of rapid revenue growth and limited profitability indicates that cost discipline and mix management are key to converting volume into earnings. The negative net income alongside positive OCF implies earnings quality that is currently stronger in cash terms than in accounting profit terms, although this may be driven by temporary working capital tailwinds. Dividend payments were nil (DPS ¥0.00) with a payout ratio of 0%, consistent with preserving cash during a margin rebuilding phase. Overall, the company exhibits strong growth, sufficient short-term liquidity, and low financial leverage, but needs to demonstrate sustained margin improvement and stable cash generation to translate sales momentum into durable shareholder value. Data points showing zero (e.g., cash, equity ratio, share counts) are treated as undisclosed; conclusions rely only on available non-zero figures, and some balance sheet subtotals may reflect aggregation differences that limit precision.

Profitability Analysis

ROE decomposes to a net margin of -1.04%, asset turnover of 0.767x, and financial leverage of 1.64x, yielding a calculated ROE of -1.31%. The negative net margin despite strong revenue growth suggests that SG&A growth, pricing, and/or cost inflation offset volume gains. Gross margin at 26.0% is modest for a service-oriented model, implying limited pricing power or a high pass-through of subcontract costs. Operating margin of roughly 0.4% indicates minimal operating leverage achieved so far; fixed cost absorption likely improved with growth, but was outweighed by expense growth. EBITDA margin of 1.5% remains thin; depreciation of ¥16.97m indicates a relatively asset-light base, but not enough to materially bolster EBITDA. Interest burden is negligible (coverage ~24.8x), so profitability is primarily driven by operating factors rather than financing costs. Ordinary income trailing operating income shows minor non-operating drag. The deterioration from operating to net income suggests tax and other items impacted results, though the effective tax rate metric is shown as 0.0% (treated as undisclosed). Overall margin quality is weak, with evidence of volume-driven growth without commensurate margin expansion.

Growth Assessment

Revenue grew 72.6% YoY to ¥1.538bn, indicating strong demand or successful business development initiatives. However, operating income declined 14.5% YoY to ¥6m, pointing to negative operating leverage in the period despite higher volumes. The disparity suggests increased SG&A (e.g., sales force expansion, marketing, or platform investments) and/or gross margin pressure from competitive pricing or higher subcontracting mix. Profit quality is fragile: ordinary income was ¥4m and net income a loss of ¥16m, indicating that incremental revenue currently lacks sufficient contribution margin. Cash flow quality is better than earnings, with OCF of ¥81m supported by working capital movements and non-cash charges (e.g., depreciation of ¥17m). Sustainability of growth will depend on maintaining order intake while improving mix and utilization to lift gross margin. Near-term outlook hinges on cost control and the ability to pass through costs or upgrade service mix, as current EBITDA margin of 1.5% leaves little buffer. If volume normalization occurs or housing-related activity softens, profitability could be pressured without cost flex. Conversely, sustained top-line momentum combined with SG&A discipline could quickly improve operating leverage given low interest burden.

Financial Health

Liquidity appears strong with a current ratio of 479.7% and working capital of ¥1.099bn, driven by ¥1.388bn in current assets versus ¥289m in current liabilities. Quick ratio is reported equal to the current ratio, implying no material inventories disclosed (inventories listed as 0, treated as undisclosed). Total liabilities of ¥291m against equity of ¥1.224bn imply modest leverage, with a debt-to-equity ratio of 0.24x. Interest expense is minimal (¥0.24m), limiting solvency risk from financing costs. Using total assets of ¥2.004bn and equity of ¥1.224bn suggests an indicative equity ratio of ~61%, though the equity ratio field is shown as 0.0% (undisclosed). Some aggregation differences between assets, liabilities, and equity totals may limit precision; hence, we rely on the provided leverage and liquidity ratios for assessment. Overall, the capital structure appears conservative, with ample short-term liquidity and low financial gearing.

Cash Flow Quality

Operating cash flow was ¥81.05m despite a net loss of ¥16m, producing an OCF/Net Income ratio of -5.07. This indicates strong cash conversion driven by non-cash expenses (depreciation of ¥16.97m) and likely favorable working capital inflows (e.g., collections or payables timing). Investing cash flow is undisclosed (0), preventing a full free cash flow calculation; reported FCF is 0 for the same reason. Financing cash flow was -¥74.99m, suggesting repayment of obligations or other outflows; absent cash balance disclosure, the net effect on liquidity cannot be precisely determined. Given the thin EBITDA margin, sustaining positive OCF will require continued discipline in receivables, payables, and project billing. The quality of earnings is better in cash terms than in accrual terms this period, but depends on working capital timing that may not recur.

Dividend Sustainability

DPS was ¥0.00 with a payout ratio of 0%. With negative EPS (-¥0.75) and undisclosed investing cash flows, there is no basis for dividend coverage from FCF this period. Positive OCF of ¥81m provides some internal funding capacity, but profit volatility and low margins argue for cash retention. Given low leverage and strong reported liquidity, the balance sheet can support operations, yet near-term distributions would compete with reinvestment in margin improvement and growth. Policy-wise, maintaining a zero dividend appears consistent with current profitability and the need to stabilize earnings quality before considering payouts.

Risk Assessment

Business Risks:

• Exposure to housing and construction activity cycles impacting demand for ground investigation and related services
• Pricing pressure and competitive tendering reducing gross margins
• Subcontractor availability and cost inflation affecting project economics
• Execution risk in scaling new services or platforms without diluting margins
• Customer concentration risk with major homebuilders or developers
• Regulatory changes in building standards or soil investigation requirements
• Project timing and seasonality impacting quarterly revenue recognition and cash collections

Financial Risks:

• Thin EBITDA and operating margins increase vulnerability to volume fluctuations
• Reliance on favorable working capital timing to sustain positive OCF
• Potential for receivables build-up and credit risk during rapid growth
• Limited buffer for unforeseen costs given low operating income
• Data limitations on cash balances and investing activities constrain liquidity visibility

Key Concerns:

• Sustaining gross margin at 26.0% while scaling revenues
• Converting strong top-line growth into consistent operating profits
• Maintaining positive operating cash flow absent one-off working capital benefits
• Visibility into cash and investing flows due to undisclosed items

Investment Implications

Key Takeaways:

• Strong revenue growth (+72.6% YoY) has not translated into earnings; operating margin ~0.4%
• Net loss of ¥16m alongside positive OCF of ¥81m indicates supportive cash dynamics this period
• Liquidity appears ample (current ratio ~480%) and leverage modest (D/E ~0.24x), limiting balance sheet risk
• Interest burden is minimal (coverage ~24.8x), so operating performance is the key driver
• Margin expansion and working capital discipline are critical to sustain and monetize growth

Metrics to Watch:

• Gross margin progression and SG&A ratio to sales
• Order intake/backlog and housing starts as demand indicators
• Operating cash flow margin and receivables days
• EBITDA margin and operating income trajectory
• Leverage metrics (D/E) and any changes in financing cash flows

Relative Positioning: The company operates as a niche, relatively asset-light player in geotechnical and housing-related services with conservative leverage and strong reported liquidity, but trails in profitability versus peers that convert volume into higher margins; near-term focus remains on operational efficiency and pricing discipline.

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