| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥786.5B | ¥760.1B | +3.5% |
| Operating Income / Operating Profit | ¥56.9B | ¥55.3B | +2.9% |
| Ordinary Income | ¥57.4B | ¥55.6B | +3.2% |
| Net Income / Net Profit | ¥43.7B | ¥41.2B | +6.1% |
| ROE | 5.0% | 4.9% | - |
For the fiscal year ended March 2026, Aida Engineering reported Revenue / Net Sales of ¥786.5B (YoY +¥26.4B +3.5%), Operating Income of ¥56.9B (YoY +¥1.6B +2.9%), Ordinary Income of ¥57.4B (YoY +¥1.8B +3.2%), and Net Income of ¥43.7B (YoY +¥2.5B +6.1%). Significant revenue growth in the Americas (+20.3%) drove overall performance, while Japan, Europe and China saw revenue declines. Operating margin declined by -10bp to 7.2% (prior year 7.3%), but Net Income rose due to the recognition of Special Income of ¥5.1B. Operating Cash Flow was ¥82.0B (YoY +25.9%), showing material improvement and generating cash at 1.9x Net Income. Financial position is very sound with an Equity Ratio of 69.1% and Cash of ¥385.2B, but ROE at 5.0% (prior year 6.2%) declined and remains below industry benchmark. Full Year guidance targets Revenue of ¥800.0B (YoY +1.7%) and Operating Income of ¥57.0B (YoY +0.2%), effectively flat.
[Revenue] Revenue was ¥786.5B (YoY +3.5%), primarily driven by rapid expansion in the Americas (¥219.4B, +20.3%). By product, Press Machines were ¥517.6B, Services ¥196.5B, and Other ¥72.5B. By region, Japan was the largest segment at ¥427.4B (-8.3%) but declined; Americas ¥219.4B (+20.3%) showed strong growth; Europe ¥136.8B (-7.4%); China ¥111.7B (-4.6%); Asia ¥107.1B (-1.2%). The increase in the Americas reflected progress on large projects and expanded service revenue, offsetting declines in Japan. Contract liabilities (advance receipts) were ¥162.9B, indicating a thick backlog, and gross margin improved by +1.2pt to 22.3% (prior year equivalent 21.1%).
[Profitability] Operating Income was ¥56.9B (YoY +2.9%), with an Operating Margin of 7.2% (prior year 7.3%). Gross Profit was ¥175.5B (Gross Margin 22.3%), less SG&A of ¥118.6B (SG&A Ratio 15.1%, YoY +12.8%). The SG&A increase (+12.8%) exceeded revenue growth (+3.5%), offsetting operating leverage. Ordinary Income of ¥57.4B (YoY +3.2%) included foreign exchange losses of ¥4.2B in non-operating items, partially offset by dividend income of ¥3.1B and interest income of ¥2.5B. Pre-tax Income was ¥62.1B, and Special Income of ¥5.1B (gain on sale of investment securities ¥5.1B) was recognized; Special Losses were minor at ¥0.3B (loss on disposal of fixed assets ¥0.3B). Income taxes were ¥19.5B (effective tax rate 31.4%), yielding Net Income of ¥43.7B (YoY +6.1%). Comprehensive Income was ¥82.9B, significantly exceeding Net Income, driven by positive foreign currency translation adjustments of ¥34.0B, valuation differences on available-for-sale securities ¥3.4B, and retirement benefit adjustments ¥2.8B. In conclusion, revenue and profit growth were achieved thanks to the Americas and Special Income, but rising SG&A and large profit declines in Asia weighed on profitability improvements.
Japan: Revenue ¥427.4B (YoY -8.3%), Operating Income ¥30.0B (YoY +6.7%), Margin 7.0% — showing profit growth. Americas: Revenue ¥219.4B (YoY +20.3%) expanded rapidly, but Operating Income ¥11.8B (YoY -8.1%) and margin declined to 5.4%. Europe: Revenue ¥136.8B (YoY -7.4%), Operating Income ¥1.9B (YoY -5.9%), margin 1.4% — extremely low profitability. China: Revenue ¥111.7B (YoY -4.6%), Operating Income ¥7.4B (YoY -11.3%), margin 6.7%. Asia: Revenue ¥107.1B (YoY -1.2%), Operating Income ¥2.1B (YoY -59.6%), margin 1.9% — sharp deceleration. Japan and the Americas accounted for 73% of consolidated Operating Income, while low profitability in Europe and Asia dragged on segment mix. The fact that the Americas delivered strong revenue growth yet lower profit suggests SG&A increases and cost pressures compressed profitability.
[Profitability] Operating Margin 7.2% (prior year 7.3%, -10bp), Net Margin 5.6% (prior year equivalent 5.4%, +0.2pt), Gross Margin 22.3% (prior year equivalent 21.1%, +1.2pt). SG&A Ratio rose to 15.1% (prior year equivalent 13.8%, +1.3pt). ROE 5.0% (prior year 6.2%, -1.2pt) falls below the company’s historical level; despite slight improvement in Net Margin, Asset Turnover remained stagnant at 0.63x (prior year 0.62x). [Cash Quality] Operating Cash Flow / Net Income 1.88x, OCF / EBITDA (Operating Income + Depreciation) 1.05x, Accrual Ratio -3.1%—cash backing of profits is solid. [Investment Efficiency] Total Asset Turnover 0.63x, Days Sales Outstanding 70 days, Days Inventory Outstanding 184 days, Cash Conversion Cycle (CCC) 227 days. Work-in-process inventory is ¥186.0B, representing 60.4% of total inventory (¥308.0B), and prolonged production lead times suppress capital efficiency. [Financial Soundness] Equity Ratio 69.1% (prior year 68.0%, +1.1pt), Current Ratio 280.7%, Cash and Deposits ¥385.2B (49.0% of Revenue). Short-term borrowings ¥27.5B and long-term borrowings ¥15.0B total ¥42.5B, yielding Net Cash of ¥342.7B. Debt / EBITDA 0.55x, Interest Coverage (Operating Income ÷ Interest Expense) 49.1x — conservative leverage.
Operating Cash Flow was ¥82.0B (prior year ¥65.1B, +25.9%), a significant improvement. Operating CF subtotal (before working capital changes) was ¥96.9B; reductions in inventory (+¥43.9B, inventory decrease) and progress on receivables (+¥12.3B, collection improvement) contributed positively, while increases in payables (-¥31.6B, higher payments) detracted. After payment of income taxes of -¥19.1B, Operating CF amounted to 1.88x Net Income of ¥43.7B. Investing CF was -¥18.8B, including Capital Expenditure -¥16.4B (0.78x Depreciation ¥21.1B), indicating maintenance-level capex, and Acquisition of Intangible Assets -¥1.2B. Time deposit activity was net +¥12.3B (deposit -¥18.0B, withdrawal +¥30.3B). Proceeds from sale of investment securities ¥5.4B contributed inflows. Free Cash Flow was ¥63.2B (Operating CF + Investing CF), sufficiently covering total shareholder returns of ¥52.9B (Dividends ¥22.9B and Share Buybacks ¥30.0B) — FCF Coverage 1.2x. Financing CF was -¥44.1B, reflecting Share Buybacks -¥30.0B, Dividends -¥22.8B, net increase in short-term borrowings +¥8.7B, long-term borrowings issuance +¥5.0B and repayments -¥5.0B. Cash and Cash Equivalents increased by ¥36.8B from opening balance ¥329.8B to closing balance ¥366.6B; foreign currency translation adjustments +¥17.7B further contributed, resulting in Cash and Deposits of ¥385.2B. Working capital efficiency (DSO 70 days, DIO 184 days, DPO 26 days) yields a CCC of 227 days — long holding remains a challenge, but strong cash generation mitigates financial risk.
Earnings this period were primarily from core operations, but Special Income from sale of investment securities of ¥5.1B (Special Income) represented approximately 11.7% of Net Income ¥43.7B, indicating a meaningful one-off contribution. Non-operating income included dividend income ¥3.1B and interest income ¥2.5B (total ¥5.6B, 0.7% of Revenue), providing stable support, while foreign exchange losses ¥4.2B (0.5% of Revenue) were recorded as non-operating expense, resulting in a net negative FX impact at the Ordinary Income stage. Dependency of non-operating income on Revenue is under 1%, indicating no excessive reliance; interest and dividend income are recurring returns on cash and investment securities holdings. The divergence between Ordinary Income ¥57.4B and Net Income ¥43.7B is mainly due to tax burden (effective tax rate 31.4%) and special items; effective tax rate rose and normalized from prior year (equivalent 19.0%). Operating CF ¥82.0B is 1.88x Net Income ¥43.7B and the Accrual Ratio is -3.1% (negative), as working capital improvements (inventory decline +¥43.9B, receivables collection +¥12.3B) generated cash in excess of accounting profit. Comprehensive Income ¥82.9B is 1.90x Net Income, driven mainly by foreign currency translation adjustments of ¥34.0B. Translation adjustments are unrealized valuation changes not captured in Net Income and reflect expansion of overseas assets and yen depreciation; their contribution to shareholder value depends on medium-term FX trends.
Full Year guidance: Revenue ¥800.0B (YoY +1.7%), Operating Income ¥57.0B (YoY +0.2%), Ordinary Income ¥60.0B (YoY +4.6%), Net Income ¥43.0B (YoY -1.6%, assuming decline from actual ¥43.7B). Operating Margin is assumed at 7.1%, broadly flat versus this year’s 7.2%. Growth in Ordinary Income incorporates expectations of reduced FX headwinds; slight decline in Net Income assumes the absence of Special Income. Full Year EPS guidance ¥79.13 and dividend guidance ¥39 (Payout Ratio 49.3%). Progress against full-year plan is generally achieved: Revenue 98.3%, Operating Income 99.8%, Ordinary Income 95.6%; Full Year guidance is conservative. With contract liabilities (backlog) of ¥162.9B, control of SG&A and stabilization of segment mix are key to monetizing backlog during the remaining period.
Year-end dividend ¥39, annual dividend ¥39, Payout Ratio 41.8% (dividend total approx. ¥22.9B against Net Income ¥43.7B). Against Free Cash Flow ¥63.2B, dividend represents 36.2%, and FCF Coverage of dividends is 2.76x, indicating high sustainability. Share buybacks of ¥30.0B were executed, bringing total return to shareholders to ¥52.9B; Total Return Ratio vs Net Income is approx. 121%. Buybacks were conducted within FCF (FCF Coverage 1.19x), demonstrating shareholder return enhancement using financial capacity. Treasury stock balance at period-end ¥28.5B (8.9% of issued shares) is expected to contribute to capital efficiency improvement. Dividend guidance for next fiscal year remains ¥39, maintaining a stable policy. Payout Ratio 49.3% (on full-year guidance) is within an appropriate range, and with Cash holdings of ¥385.2B and a strong financial base, coexistence of dividends and buybacks is feasible.
Risk of deterioration in working capital efficiency: High Days Inventory Outstanding 184 days and Work-in-Process ratio 60.4% reflect prolonged production lead times and inventory accumulation. Short DPO of 26 days and CCC 227 days suppress cash efficiency. Inventory writedowns, obsolescence, and production bottlenecks causing delivery delays pose risks to both profitability and cash flow. Management of work-in-process compression during conversion of the backlog of ¥162.9B will influence performance progress.
Risk of deterioration in regional segment profitability: Despite Americas revenue +20.3%, Operating Income declined -8.1%; Europe margin 1.4%; Asia saw a sharp profit decline -59.6% with margin 1.9%. Continued low profitability in these regions would limit scope for consolidated margin improvement. Prolonged cost increases in the Americas, demand volatility in Asia, or worsening market conditions in Europe could materialize into a structural downside to Operating Margin due to adverse segment mix.
FX volatility and dependence on one-off income risk: FX losses of ¥4.2B were recorded in non-operating expense, indicating material FX impact at the Ordinary Income stage. High overseas revenue exposure (Americas + Asia + Europe + China approx. 45%) and FX hedging policy will affect earnings volatility. Special Income ¥5.1B (gain on sale of investment securities) accounted for 11.7% of Net Income, implying some dependence on non-recurring items. Reduction of non-recurring profit components increases the risk of short-term downside to Net Income.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 7.2% | 7.8% (4.6%–12.3%) | -0.5pt |
| Net Margin | 5.6% | 5.2% (2.3%–8.2%) | +0.4pt |
Company Operating Margin is -0.5pt below the industry median, while Net Margin is +0.4pt above, suggesting relatively effective management of non-operating and special items.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 3.5% | 3.7% (-0.4%–9.3%) | -0.2pt |
Revenue growth is broadly in line with the industry median, following the manufacturing sector growth pace.
※Source: Company aggregation
Cash generation and sustainability of shareholder returns: Operating CF ¥82.0B (1.88x Net Income), Free Cash Flow ¥63.2B — cash generation exceeds accounting profit and supported dividends ¥39 (Payout Ratio 41.8%) and share buybacks ¥30.0B within FCF. Cash ¥385.2B (49.0% of Revenue) and near net cash position provide high dividend sustainability. The continuation of next fiscal year dividend guidance ¥39 is a key point for income-focused investors.
Challenge of improving ROE via working capital efficiency: ROE 5.0% declined from 6.2% and is below industry benchmark. Work-in-process ratio 60.4% and CCC 227 days suppress asset efficiency. With backlog of contract liabilities ¥162.9B, inventory compression and normalization of collection cycles could improve Total Asset Turnover and make ROE > 8% feasible. Progress on medium-term capital efficiency improvement should be monitored.
Volatility in segment mix and profitability: Japan’s profit growth (Operating Income +6.7%, margin 7.0%) supports the company, but Americas’ decline (-8.1%) and Asia’s sharp slowdown (-59.6%) depress profitability. Europe’s very low margin (1.4%) is structural. Large inter-regional margin disparities mean recovery pace in Americas and Asia and maintenance of high-value projects in Japan will drive near-term momentum. Evolution of regional disclosures will be a key observation point in earnings.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company from public financial statements. Investment decisions are your responsibility; please consult a professional if necessary before making investment decisions.
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