J.E.T.Co.,LTD. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥11.02B
• Operating Income: ¥-1.70B
• Net Income: ¥403M
• EPS: ¥-193.60

Income Statement

Balance Sheet

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

For FY2025 Q3 (cumulative), 株式会社ジェイ・イー・ティ reported revenue of ¥11.021 billion, down 22.9% YoY, reflecting a notable contraction in top-line momentum. Despite the decline, reported gross profit of ¥2.977 billion implies a gross margin of 27.0%, suggesting some resilience in pricing or mix, although operating leverage turned sharply negative. Operating income was a loss of ¥1.704 billion (down 63.4% YoY), indicating that fixed cost absorption and SG&A magnitude outweighed gross profit generation amid weaker volumes. Ordinary income was a loss of ¥1.781 billion, only modestly worse than operating loss, implying limited non-operating headwinds aside from ¥47 million in interest expense. Net income deteriorated to a loss of ¥2.541 billion, with EPS of -¥193.60; the loss magnitude also reflects tax expense of ¥284 million likely tied to valuation allowances or non-deductible items rather than current tax on profits. DuPont analysis indicates an ROE of -25.9%, driven by a negative net margin of -23.06%, asset turnover of 0.55x, and financial leverage of 2.04x—clearly signaling earnings pressure rather than balance-sheet-driven weakness. Liquidity appears ample on reported figures, with a current ratio of 277.8% and quick ratio of 219.0%, supported by ¥15.249 billion of working capital and inventories of ¥5.044 billion. Solvency is moderate with total liabilities of ¥13.021 billion and total equity of ¥9.810 billion, implying a liabilities-to-equity ratio of 1.33x (consistent with the reported Debt-to-Equity ratio). While the disclosed “Equity Ratio” field shows 0.0% (unreported), a simple calculation suggests equity is roughly 49% of assets (¥9.810b/¥20.039b), indicating a reasonably solid capital base. Notably, several cash flow and other items (depreciation, OCF/FCF, cash balance, shares outstanding) are unreported; as instructed, these zeros should be interpreted as undisclosed rather than actual zero values. A data inconsistency exists between the provided cost of sales (¥11.314b) and the reported gross profit and revenue (which imply cost of sales nearer to ¥8.044b); we rely on the internally consistent revenue and gross profit figures for margin analysis. Interest coverage is deeply negative at -36.3x due to the operating loss, highlighting the sensitivity of profits to volume recovery. Inventory at 46% of cumulative revenue suggests significant work-in-process or built inventory, common for project- or equipment-heavy businesses, but it also elevates execution and working-capital risks if conversion slows. The dividend is currently suspended (DPS ¥0), appropriate given losses and uncertain free cash flow. Overall, the quarter portrays a company with acceptable liquidity and manageable leverage but facing cyclical or order-intake-driven pressure that has pushed operating income into the red, with recovery dependent on demand normalization and cost control.

Profitability Analysis

roe_decomposition: ROE is -25.9%, decomposed as Net Profit Margin -23.06% × Asset Turnover 0.55x × Financial Leverage 2.04x. The negative margin is the principal driver; asset productivity is moderate and leverage is not excessive. margin_quality: Gross margin is 27.0% (¥2.977b/¥11.021b), consistent with value-add content, but operating margin is -15.5% (¥-1.704b/¥11.021b), indicating SG&A and fixed costs outpaced gross profit. The ordinary loss of ¥1.781b versus operating loss of ¥1.704b shows limited non-operating drag aside from ¥47m interest. operating_leverage: Revenue fell 22.9% YoY, yet operating income swung to a sizeable loss, evidencing high operating leverage. Implied SG&A of roughly ¥4.681b (gross profit minus operating income) suggests limited short-term cost flexibility; incremental volumes should materially improve operating profit, but downside sensitivity remains elevated.

Growth Assessment

revenue_sustainability: Top-line decline of 22.9% YoY indicates cyclical or order timing weakness. Without order backlog or bookings data, sustainability of revenue is uncertain. profit_quality: Gross margin at 27.0% suggests underlying pricing/mix remains intact, but negative operating margin points to insufficient scale. Ordinary results broadly track operating results, implying limited reliance on non-core income. outlook: A return to profitability hinges on revenue recovery and tighter cost discipline. High operating leverage implies significant earnings torque on volume normalization, but near-term visibility is low due to absent backlog, OCF, and capex disclosures.

Financial Health

liquidity: Current assets of ¥23.824b vs. current liabilities of ¥8.575b yield a current ratio of 277.8% and quick ratio of 219.0%, indicating strong short-term coverage. Working capital totals ¥15.249b. solvency: Total liabilities are ¥13.021b against equity of ¥9.810b (Debt-to-Equity 1.33x). Based on total assets of ¥20.039b and equity of ¥9.810b, the implied equity ratio is ~49%, despite the unreported 0.0% field. capital_structure: Leverage is moderate (financial leverage 2.04x), with interest expense of ¥47m and negative EBIT resulting in -36.3x interest coverage. The balance sheet appears capable of absorbing near-term losses, provided cash generation stabilizes.

Cash Flow Quality

earnings_quality: Cash flow statements are unreported, preventing reconciliation of earnings to cash. Positive tax expense amid a net loss suggests non-cash tax items (e.g., valuation allowance), further complicating cash earnings assessment. fcf_analysis: OCF and capex are undisclosed; therefore, FCF cannot be determined. Given the operating loss and likely working-capital needs (notably inventories), near-term FCF risk is elevated until volumes recover. working_capital: Inventories of ¥5.044b (~46% of cumulative revenue) point to substantial WIP or finished goods. Conversion of inventories to revenue and cash will be critical; absent receivables/payables detail, cash conversion cycle cannot be quantified.

Dividend Sustainability

payout_ratio_assessment: With net loss of ¥2.541b and DPS of ¥0, the payout ratio is effectively 0%. Given losses, a distribution would not be supported by earnings. fcf_coverage: FCF and OCF are unreported; coverage cannot be assessed. In the context of negative operating income, cash coverage would likely be weak even if disclosed. policy_outlook: Maintaining suspension appears prudent until profitability and cash generation normalize. Resumption would likely require sustained positive operating income and demonstrable OCF recovery.

Risk Assessment

Business Risks:

• Demand cyclicality or order timing sensitivity leading to revenue volatility (-22.9% YoY).
• High operating leverage amplifying earnings swings with volume changes.
• Inventory build and WIP execution risk given inventories of ¥5.044b.
• Potential project concentration or customer concentration (not disclosed).
• Supply chain or lead-time variability affecting cost and delivery (implied by inventories).

Financial Risks:

• Negative interest coverage (-36.3x) increases sensitivity to financing conditions.
• Loss-making position (-¥2.541b net) could erode equity if prolonged.
• Cash flow opacity due to unreported OCF/FCF and cash balance.
• Potential working capital cash absorption if revenue recovery is delayed.

Key Concerns:

• Sustained operating losses absent rapid revenue recovery.
• Conversion of inventories to cash amid weakening demand.
• Data limitations (cash flow, depreciation, share data) constrain visibility into cash runway and capex needs.

Investment Implications

Key Takeaways:

• Revenue contracted 22.9% YoY to ¥11.021b; profitability deteriorated to an operating loss of ¥1.704b.
• Gross margin remains 27.0%, but operating margin is -15.5% due to fixed-cost burden.
• ROE at -25.9% is margin-driven; leverage is moderate (2.04x).
• Liquidity metrics are strong (current ratio 277.8%, quick ratio 219.0%), providing cushion.
• Interest coverage is deeply negative (-36.3x), underscoring urgency of profit recovery.
• Cash flow data are unreported, limiting assessment of earnings quality and runway.
• Dividend remains suspended (DPS ¥0), appropriate under current earnings profile.

Metrics to Watch:

• Order backlog and new bookings (leading indicator for revenue recovery).
• Operating income trajectory and SG&A run-rate (cost discipline).
• Operating cash flow and free cash flow (conversion of earnings to cash).
• Inventory turnover and WIP conversion to shipments and collections.
• Capex and depreciation (capacity, maintenance needs, and cash burden).
• Effective tax treatment and valuation allowances given ongoing losses.

Relative Positioning: Within capital goods/industrial equipment peers, the company currently exhibits above-average liquidity and moderate leverage but below-peer profitability due to weak volumes and high operating leverage; recovery hinges on demand normalization and working-capital conversion.

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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