| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥269.9B | ¥265.8B | +1.5% |
| Operating Income / Operating Profit | ¥22.6B | ¥22.8B | -0.8% |
| Ordinary Income | ¥23.4B | ¥22.4B | +4.7% |
| Net Income / Net Profit | ¥9.8B | ¥10.3B | -5.8% |
| ROE | 5.4% | 6.0% | - |
For the fiscal year ended March 2026, Revenue amounted to ¥269.9B (YoY +¥4.1B +1.5%), Operating Income was ¥22.6B (YoY -¥0.2B -0.8%), Ordinary Income was ¥23.4B (YoY +¥1.1B +4.7%), and Net Income attributable to owners of the parent was ¥9.8B (YoY -¥0.6B -5.8%). Revenue growth was driven by a slight increase domestically and a +5.5% rise overseas, but Operating Income edged down due to margin deterioration in the overseas segment. At the ordinary level, gains on foreign exchange of ¥1.5B contributed to higher profit, but the decline from profit before tax to Net Income was significant, with the effective tax rate rising to 34.1% from 32.6% in the prior year. Gross margin remained steady at 29.6%, while SG&A ratio worsened to 21.2% from 21.0% a year earlier, pushing the operating margin down to 8.4% (prior year 8.6%). The result was higher revenue with slightly lower profit, indicating room to improve profitability.
【Revenue】Revenue was ¥269.9B (YoY +1.5%), a modest increase. The Domestic Business recorded ¥213.3B (+1.0%) and remained stable, supported by demand for demolition environmental machinery and spare parts & repair. The Overseas Business achieved ¥63.4B (+5.5%), driven by volume and regional expansion, though the currency tailwind was limited. By region: Domestic ¥206.6B, North America ¥42.4B (prior year ¥42.2B), Other ¥20.9B (prior year ¥17.6B), with Other regions showing strong growth of +18.7%. By product: Demolition environmental machinery ¥186.6B (prior year ¥184.4B), Forestry & large environmental machinery ¥38.8B (prior year ¥38.5B), Spare parts & repair ¥44.5B (prior year ¥42.9B), all showing marginal increases; core demolition environmental machinery accounts for 69% of total. Gross profit was ¥79.9B, with a gross margin of 29.6% (prior year 29.6%) maintained; the impact of raw material price increases was absorbed through price pass-through.
【Profit/Loss】Operating Income was ¥22.6B (YoY -0.8%), a slight decline. SG&A was ¥57.3B (prior year ¥55.8B), up +2.7%, raising the SG&A ratio to 21.2% (prior year 21.0%). Goodwill amortization was ¥0.4B, similar to prior year and limited in impact. By segment, Domestic recorded Operating Income of ¥19.9B (+3.1%, margin 9.3%) and secured higher profit, while Overseas registered Operating Income of ¥2.8B (-19.8%, margin 4.4%), a significant decline, reflecting higher SG&A and intensified price competition. Ordinary Income was ¥23.4B (+4.7%), aided by non-operating income of ¥3.3B (prior year ¥1.7B). The breakdown included foreign exchange gains ¥1.5B, dividend income ¥0.3B, interest income ¥0.3B, etc.; non-operating expenses were ¥2.4B including interest expense ¥2.1B. Extraordinary items were net -¥0.8B (extraordinary income ¥0.6B, extraordinary loss ¥1.4B), a minor headwind including litigation settlement payments of ¥0.3B. Profit before tax was ¥22.6B (YoY +3.4%), but higher corporate taxes etc. of ¥7.7B (effective tax rate 34.1%) led to Net Income of ¥9.8B (-5.8%). Comprehensive income was ¥14.3B (prior year ¥17.7B, -19.3%), reflecting other comprehensive income such as valuation difference on available-for-sale securities ¥0.4B and foreign currency translation adjustments -¥1.0B. In conclusion, revenue increased while profit slightly decreased; declining overseas margins and higher tax burden pressured profit.
The Domestic Business posted Revenue ¥213.3B (YoY +1.0%) and Operating Income ¥19.9B (+3.1%), maintaining a margin of 9.3%, and represents the core business accounting for approximately 88% of consolidated Operating Income. Stable demand for demolition environmental machinery and spare parts & repair supported results, and adequate control of SG&A enabled profit growth. The Overseas Business recorded Revenue ¥63.4B (+5.5%) but Operating Income fell to ¥2.8B (-19.8%), reducing margin to 4.4% (prior 5.8%), a 1.4pt decline. Intensified price competition in the North American market and higher SG&A were primary causes, offsetting the benefits of higher revenue. A margin gap of roughly 5pt exists between segments, and restoring profitability in the Overseas Business is key to improving consolidated profit.
【Profitability】Operating margin was 8.4%, down 0.2pt from 8.6% a year earlier. Gross margin held at 29.6% while SG&A ratio rose to 21.2%. Net profit margin was 3.6% (prior year 3.9%), affected by higher tax burden. ROE was 5.4% (prior year 6.0%), primarily due to the decline in net profit margin. 【Cash Quality】Operating Cash Flow to Net Income ratio was -0.19x (Operating CF -¥1.9B / Net Income ¥9.8B), indicating profits are not converting to cash due to deterioration in working capital. Increases in trade receivables (-¥6.0B) and decreases in accounts payable (-¥17.8B) were main drivers, with inventories contributing slightly via ¥2.0B cash recovery. Accrual ratio was 2.8%, in a good range, but weak OCF generation is a concern. 【Investment Efficiency】Total asset turnover was 0.68x (Revenue ¥269.9B / Total assets ¥399.8B), similar to prior year, but asset efficiency was constrained by a large increase in tangible fixed assets (prior year ¥98.1B → current ¥129.7B, +32.2%). Capital expenditures were ¥32.4B, about 5.0x depreciation expense ¥6.5B, indicating an aggressive investment stance. 【Financial Soundness】Equity Ratio was 45.2% (prior year 47.9%); interest-bearing debt was ¥136.4B (short-term borrowings ¥111.5B, long-term borrowings ¥24.9B), showing a pronounced short-term bias. Debt/EBITDA was 4.68x, Interest Coverage was 10.97x (EBIT ¥22.6B / interest expense ¥2.1B), so interest burden is manageable, but short-term debt ratio 81.8% and cash ¥55.2B / short-term liabilities ¥171.2B = 0.49x indicate maturity mismatch issues. Current ratio was 148% and quick ratio 101%, so short-term liquidity is marginally secured.
Operating CF was -¥1.9B (prior year -¥0.1B), a substantial negative versus Net Income ¥9.8B, with a cash conversion ratio of -0.19x, well below cautionary thresholds. Operating cash subtotal (pre-depreciation profit basis) was ¥6.1B, but working capital deterioration absorbed cash. The breakdown: increase in trade receivables -¥6.0B, decrease in inventories +¥2.0B, decrease in accounts payable -¥17.8B, with the significant reduction in accounts payable the largest cash outflow. Corporate tax payments -¥5.9B also weighed on cash, while interest and dividend receipts were limited at ¥0.4B. Investing CF was -¥30.9B, led by capital expenditures -¥32.4B, partially offset by proceeds from sale of tangible fixed assets +¥0.7B and long-term loan recoveries +¥0.2B. Capex was about 5x depreciation ¥6.5B, indicating expansionary posture, with major investments in land +¥24.1B and buildings +¥15.5B. Financing CF was +¥40.7B, composed of net increase in short-term borrowings +¥16.5B, procurement of long-term borrowings +¥24.4B, long-term repayments -¥7.5B, dividend payments -¥5.9B, and share buybacks -¥0.0B. Free Cash Flow was -¥32.8B (Operating CF -¥1.9B + Investing CF -¥30.9B), so dividend payments were not covered by internally generated cash, and funding continued to rely on borrowings. Cash increased from ¥46.7B at the beginning of the period to ¥54.9B at year-end, +¥8.3B, including foreign exchange translation effects of +¥0.4B.
Of Ordinary Income ¥23.4B, Operating Income was ¥22.6B, and non-operating income of ¥3.3B (foreign exchange gains ¥1.5B, dividends & interest ¥0.6B, etc.) contributed, indicating some persistence in ordinary items. The foreign exchange gains likely stemmed from valuation gains on foreign-currency trade receivables and deposits in the prior year, posing reversal risk depending on future FX movements. Extraordinary items were net -¥0.8B, a headwind of roughly 8% of Net Income, but items such as litigation settlement payments ¥0.3B and loss on retirement of fixed assets ¥0.2B are one-off. Operating CF significantly lagged Net Income; accrual (difference between profit and cash) at 2.8% is within a good range, but working capital deterioration delayed cash realization. The gap between comprehensive income ¥14.3B and Net Income ¥9.8B was driven by other comprehensive income including foreign currency translation adjustments -¥1.0B, a temporary financial fluctuation. The divergence between Ordinary Income and Net Income is explainable by the tax burden at an effective rate of 34.1%, and overall the quality of earnings is broadly stable.
Full-year guidance projects Revenue ¥285.0B (YoY +5.6%), Operating Income ¥25.0B (+10.6%), Ordinary Income ¥25.0B (+6.7%), Net Income attributable to owners of the parent ¥17.0B (+13.9%), and a dividend per share of ¥38. Operating margin is expected to improve to 8.8%, assuming recovery of Overseas Business profitability and improved working capital efficiency. Operating Income represents an incremental +¥2.4B versus current results of ¥22.6B, expected to be driven by revenue growth and better fixed-cost absorption. Ordinary Income is ¥25.0B, roughly in line with Operating Income, reflecting normalization of non-operating income (i.e., one-off foreign exchange gains not recurring). Net Income ¥17.0B assumes normalization of the effective tax rate, estimated at around 31% similar to prior year. The full-year dividend of ¥38 (forecast payout ratio approximately 36%) appears to be half of the prior year ¥75 (annual ¥75) on a surface level, but details of annual distribution are unclear. Progress ratio for Operating Income is strong at over 90% (¥22.6B / ¥25.0B), but achievement depends on working capital normalization and overseas margin recovery.
Year-end dividend was ¥75, and the payout ratio against Net Income ¥9.8B (EPS ¥185.27) is 40.3%, within a reasonable range. The prior year also had the same dividend and payout ratio of 40.3%. DOE (Dividend on Equity) is approximately 3.6%, which is commensurate with capital efficiency given ROE of 5.4%. Share buybacks were -¥0.0B (financing CF basis), effectively not conducted, and the Total Return Ratio is roughly the same as the payout ratio at about 40%. Free Cash Flow was -¥32.8B and could not cover dividend payments of ¥5.9B, meaning dividends were effectively sustained by borrowings. The full-year forecast dividend of ¥38 appears halved in presentation versus the prior year, but a lump-sum year-end distribution possibility exists and details are unclear. Sustainability of dividend funding depends on normalization of working capital and peak-out of investment burden; improvement in future Operating CF generation is a prerequisite for expanding return capacity.
Deterioration in working capital management: An increase in trade receivables -¥6.0B and decrease in accounts payable -¥17.8B turned Operating CF to -¥1.9B. Prolonged lengthening of the cash conversion cycle would increase dependence on additional borrowings and constrain financial flexibility. Strict collection of receivables and optimization of procurement terms are urgent.
Short-term debt bias and maturity mismatch: Of interest-bearing debt ¥136.4B, short-term borrowings account for ¥111.5B (81.8%), and current portion of long-term debt repayments reaches ¥22.3B. Cash ¥55.2B / short-term liabilities ¥171.2B = 0.49x indicates low liquidity coverage, and refinancing risk is present. Extending maturities and smoothing repayment schedules are key to financial stabilization.
Decline in Overseas Business profitability: Overseas Revenue ¥63.4B (+5.5%) but Operating Income ¥2.8B (-19.8%), with margin down to 4.4%. Intensified price competition and higher SG&A are main drivers; if margin recovery lags, restoring consolidated operating margin will be difficult. Reassessment of pricing strategy in North America and strict cost control are required.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 8.4% | 7.8% (4.6%–12.3%) | +0.6pt |
| Net Profit Margin | 3.6% | 5.2% (2.3%–8.2%) | -1.6pt |
Operating margin exceeds the industry median, but Net Profit Margin lags the median, reflecting the negative impact of taxes and non-operating costs on bottom-line profitability.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 1.5% | 3.7% (-0.4%–9.3%) | -2.2pt |
Revenue growth lags the industry median, reflecting maturity in the core domestic market. Expansion of overseas business presents future growth opportunities.
※Source: Company compilation
Stability of Domestic Business and margin improvement potential in Overseas Business: The Domestic segment maintains high-level performance with Revenue ¥213.3B and Operating margin 9.3%, contributing about 88% of consolidated Operating Income and serving as a stable earnings source. In contrast, the Overseas segment recorded Revenue growth of +5.5% but Operating margin fell to 4.4%, indicating significant room for improvement. If Overseas profitability recovers to Domestic levels, consolidated Operating Margin could aim for the 9% range; progress in pricing strategy and cost control will be watched.
Normalization of working capital and cash generation is central to financial improvement: Operating CF of -¥1.9B lags Net Income ¥9.8B significantly, driven by working capital deterioration—trade receivables +¥6.0B and accounts payable -¥17.8B. Although inventories slightly declined and remain healthy, converting Net Income to cash through stricter receivable collection and optimized procurement terms could reduce reliance on short-term borrowing and enable internally funded dividends. Monitoring trends in DSO, DPO, and inventory days in upcoming quarterly results is important.
Realization of large capex benefits and progress in debt extension: Tangible fixed assets increased from ¥98.1B to ¥129.7B (+32.2%), enhancing supply capacity and locations, primarily in land and buildings. Capex ¥32.4B is about 5x depreciation ¥6.5B, forming a mid-term growth base. However, short-term borrowings ¥111.5B (82% of interest-bearing debt) and the short-term bias are notable; cash/short-term liabilities at 0.49x indicate maturity mismatch. If investment returns improve sales contribution and debt maturities are extended to smooth the schedule, the high leverage of Debt/EBITDA 4.68x could normalize over time.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial results and securities report data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your own responsibility; consult a professional advisor as needed before acting.
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