AIDA ENGINEERING,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥38.69B
• Operating Income: ¥3.08B
• Net Income: ¥2.35B
• EPS: ¥47.46

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

Aida Engineering (TSE:6118) reported FY2026 Q2 consolidated (JGAAP) results showing steady top-line momentum and improving profitability. Revenue increased 3.2% year over year to ¥38.69bn, while operating income rose 6.8% to ¥3.08bn, indicating modest positive operating leverage. Gross profit was ¥8.08bn, translating to a 20.9% gross margin, and operating margin expanded to roughly 8.0%. Ordinary income exceeded operating income at ¥3.16bn, reflecting net non-operating gains of about ¥0.08bn. Net income grew 12.4% to ¥2.64bn, with EPS of ¥47.46. DuPont analysis indicates an ROE of 3.22%, driven by a 6.82% net margin, 0.32x asset turnover, and 1.47x financial leverage. Liquidity appears strong with a current ratio of 268% and working capital of ¥55.73bn. The balance sheet is conservative, with total liabilities of ¥39.22bn against total equity of ¥81.95bn, implying a low leverage profile (D/E ~0.48x; equity ratio approximately 67.8% based on available figures). Operating cash flow was ¥0.65bn, significantly below net income (OCF/NI ~0.25), suggesting working capital usage or timing effects in the period. Financing cash flow was an outflow of ¥3.75bn, likely related to shareholder returns or debt movements, though details are not disclosed. EBITDA reached ¥4.07bn (10.5% margin), providing a substantial interest coverage buffer, with operating income covering interest by roughly 73x. The reported effective tax rate of 0.0% appears inconsistent with disclosed income tax expense of ¥1.12bn versus ordinary income of ¥3.16bn, which implies a tax rate closer to the mid-30s; we rely on the line-item tax expense for analysis. Certain items are not disclosed (e.g., inventories, cash and equivalents, investing cash flows), which constrains some ratio diagnostics and cash flow quality assessments. Dividend data shows a DPS of ¥0 and a payout ratio of 0%, but with financing outflows and EPS disclosed, dividend policy for the period remains unclear pending official guidance. Overall, the company demonstrates resilient margins and disciplined balance sheet management, but near-term cash conversion appears weak and requires monitoring.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 6.82%
• asset_turnover: 0.320x
• financial_leverage: 1.47x
• calculated_ROE: 3.22%
• commentary: ROE of 3.22% reflects modest profitability and a conservative balance sheet; margin is the key driver, with moderate asset intensity and low leverage. margin_quality:
• gross_margin: 20.9%
• operating_margin: 7.95%
• EBITDA_margin: 10.5%
• net_margin: 6.82%
• observations: ['YoY operating income growth (+6.8%) outpaced revenue (+3.2%), indicating some operating efficiency or mix improvements.', 'Ordinary income exceeds operating income by ~¥83m, suggesting net non-operating gains (e.g., FX, dividends, or interest income) modestly support earnings.', 'Tax expense of ¥1.12bn implies an effective rate around the mid-30s on ordinary income, despite a reported 0.0% metric; we base analysis on line items.'] operating_leverage:
• assessment: Positive but modest
• evidence: Operating income +6.8% YoY vs revenue +3.2% YoY; incremental margin expansion evident.

Growth Assessment

revenue_sustainability: Top-line growth of 3.2% appears steady, likely driven by stable order intake and shipment execution; however, absence of segment/geographic disclosure limits attribution. profit_quality: Operating margin at ~8% and EBITDA margin at 10.5% are consistent with disciplined cost control; the uplift in ordinary income vs operating income indicates benign non-operating items rather than dependence on one-offs. outlook: With a conservative balance sheet and improving operating leverage, near-term earnings trajectory looks stable; key swing factors include demand in automotive/industrial end markets for press machinery, FX, and order backlog conversion, none of which are disclosed in this snapshot.

Financial Health

liquidity:

• current_ratio: 267.8%
• quick_ratio: 267.8% (note: inventories not disclosed; quick ratio likely overstated)
• working_capital: ¥55,726m
• commentary: Strong liquidity buffer driven by high current assets relative to current liabilities; cash balance not disclosed, so immediate liquidity mix is unknown. solvency:
• debt_to_equity: 0.48x (using total liabilities as proxy)
• equity_ratio: Approx. 67.8% (Total equity ¥81,946m / Total assets ¥120,863m); reported 0.0% appears unavailable rather than actual
• interest_coverage: 73.2x (operating income/interest expense)
• commentary: Low leverage and robust coverage indicate strong solvency and ample capacity to absorb cyclical volatility. capital_structure: Balance sheet is equity-heavy with liabilities at ~32% of assets; the structure supports resilience but dampens ROE.

Cash Flow Quality

earnings_quality: OCF of ¥651m vs net income of ¥2,637m (OCF/NI ~0.25) suggests weak cash conversion in the period, likely due to working capital build or milestone/timing on project deliveries. free_cash_flow: Not derivable; investing cash flow and capex are not disclosed (reported as 0, which indicates missing data rather than zero). working_capital: Inventories are undisclosed; with current assets high vs current liabilities, the period likely includes receivable or WIP build typical for capital goods; this is consistent with low OCF.

Dividend Sustainability

payout_ratio_assessment: Reported DPS is ¥0 and payout ratio 0.0%, but EPS is ¥47.46; without official guidance and given financing outflows, dividend stance for FY2026 remains uncertain from this dataset. FCF_coverage: Indeterminable due to missing capex/investing cash flow; cannot assess coverage of dividends by FCF. policy_outlook: Historically, sector peers target stable or progressive dividends; Aida’s conservative balance sheet would typically support distributions, but confirmation requires management guidance and full-year cash flow visibility.

Risk Assessment

Business Risks:

• Cyclical demand in automotive and general manufacturing affecting press machinery orders and backlog conversion
• Supply chain and component availability impacting project delivery schedules and margin realization
• Foreign exchange volatility given global footprint and export exposure
• Competitive pricing pressure in standard presses and automation solutions
• Project execution risk on large, customized systems influencing working capital and cash conversion

Financial Risks:

• Weak OCF relative to earnings in the period indicates working capital sensitivity
• Potential cash concentration in receivables/WIP with inventories not disclosed
• Dividend or buyback outflows (financing CF -¥3.75bn) reducing liquidity if sustained without matching OCF
• Limited visibility on capex due to undisclosed investing cash flow

Key Concerns:

• Low OCF/NI ratio (0.25) requiring improvement to underpin earnings quality
• Missing disclosures (cash, inventories, investing CF) constrain assessment of liquidity composition and FCF
• ROE at 3.22% below typical capital goods peer ranges; margin and asset turnover need to improve for higher returns

Investment Implications

Key Takeaways:

• Steady revenue growth (+3.2% YoY) with operating leverage (+6.8% OI) supports resilient core profitability
• Balance sheet strength (equity ratio ~68%, D/E ~0.48x) underpins solvency and strategic flexibility
• Cash conversion is weak this half (OCF/NI ~0.25), likely due to working capital; improvement is a key watch item
• Ordinary income modestly above operating income indicates limited reliance on non-core gains
• Dividend outlook is unclear from available data; financing outflows suggest capital returns or debt service activity

Metrics to Watch:

• Order intake and backlog conversion (not disclosed here) to gauge revenue sustainability
• Working capital movements (AR, inventories/WIP, advances) and OCF/NI normalization toward >0.8x
• Capex and investing cash flows to derive true FCF
• Gross and operating margin trajectory amid cost environment and mix
• FX sensitivity on revenue and ordinary income
• Equity ratio and net cash status once cash is disclosed

Relative Positioning: Within Japan’s industrial machinery/press equipment peers, Aida exhibits conservative leverage and solid margins but lower ROE, with near-term cash conversion a relative weak point pending fuller disclosure.

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