| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥543.6B | ¥534.8B | +1.7% |
| Operating Income / Operating Profit | ¥69.2B | ¥88.8B | -22.1% |
| Ordinary Income (for JGAAP) | ¥69.5B | ¥94.0B | -26.1% |
| Net Income / Net Profit | ¥0.4B | ¥36.5B | -98.9% |
| ROE | 0.1% | 6.0% | - |
For the fiscal year ended March 2026, Revenue was ¥543.6B (YoY +¥8.9B +1.7%) showing only a slight increase, while Operating Income was ¥69.2B (YoY -¥19.6B -22.1%), Ordinary Income was ¥69.5B (YoY -¥24.5B -26.1%), and Net Income was ¥0.4B (YoY -¥36.1B -98.9%), resulting in a significant decline in profitability. Operating margin contracted to 12.7% from 16.6% a year earlier, a reduction of 3.9pt, and gross margin also fell to 33.8% (prior year 37.2%), down 3.4pt. Although a special gain from sale of investment securities of ¥13.1B was recorded, Profit Before Tax remained at ¥70.1B and a high effective tax rate of 34.4% accelerated the decline in Net Income. The core Semiconductor Manufacturing Equipment business posted Revenue +1.9% but Operating Income -22.0%, indicating a sharp deterioration in profitability likely due to rising costs and adverse product mix. Working capital expanded with Accounts Receivable +¥45.1B and Inventories +¥18.5B, driving Operating Cash Flow (OCF) down to ¥41.2B (YoY -60.3%) and turning Free Cash Flow negative at -¥14.1B.
【Revenue】 Revenue was ¥543.6B (+1.7% YoY). The core Semiconductor Manufacturing Equipment business accounted for ¥498.7B (+1.9% YoY), remaining broadly flat and representing 91.7% of total sales. The Medical Devices business grew to ¥24.9B (+9.9% YoY), maintaining double-digit growth but with a 4.6% share its contribution to the overall performance was limited. The Laser Processing Equipment business declined to ¥20.1B (-11.0% YoY). By region, China was ¥222.3B (prior year ¥192.1B) and Taiwan ¥72.3B (prior year ¥60.0B), securing increases in major Asian markets, but Other Asia fell sharply to ¥153.4B (prior year ¥194.4B), revealing demand unevenness across regions. The revenue concentration increases sensitivity to semiconductor cycle fluctuations.
【Profit & Loss】 Operating Income was ¥69.2B (-22.1% YoY). Cost of goods sold ratio worsened to 66.2% from 62.8% a year earlier, compressing gross profit to ¥183.7B (gross margin 33.8%). SG&A was ¥114.5B (SG&A ratio 21.1%), up 0.5pt from 20.6% the prior year, with increases in fixed costs such as salaries and allowances ¥28.8B and commissions ¥13.6B pressuring operating leverage. Operating margin fell to 12.7% from 16.6% (down 3.9pt). Ordinary Income was ¥69.5B (-26.1% YoY); non-operating items included interest income ¥2.2B and dividend income ¥1.5B, while foreign exchange losses of ¥4.6B weighed on profit. Despite a special gain of ¥13.1B from sale of investment securities, Profit Before Tax was ¥70.1B and corporate taxes of ¥24.1B (effective tax rate 34.4%) resulted in Net Income of ¥0.4B (-98.9% YoY). The result was higher revenue but lower profits.
The Semiconductor Manufacturing Equipment business recorded Revenue ¥498.7B (+1.9% YoY), Operating Income ¥65.2B (-22.0% YoY), and a margin of 13.1%, down 4.0pt from 17.1% a year earlier. While Revenue was flat, double-digit declines in profit point to rising costs and adverse product mix. Depreciation of ¥28.6B (prior year ¥24.4B) and increased capital expenditure burden also pressured profitability. The Medical Devices business had Revenue ¥24.9B (+9.9% YoY) and Operating Income ¥4.5B (-0.3% YoY) with a high margin of 18.2%, but its small scale limits its offsetting effect on consolidated results. The Laser Processing Equipment business declined to Revenue ¥20.1B (-11.0% YoY) and swung to an Operating loss of ¥0.5B (prior year Operating profit ¥0.7B), reflecting inability to absorb fixed costs.
【Profitability】Operating margin at 12.7% declined 3.9pt from 16.6% last year, with gross margin 33.8% (prior year 37.2%) and SG&A ratio 21.1% (prior year 20.6%), indicating deterioration in both cost of sales and fixed costs. ROE fell sharply to 0.1% from 13.6% due primarily to Net Income margin of 0.1% (prior year 6.8%). ROA (on an Ordinary Income basis) declined to 7.3% (prior year 11.0%). 【Cash Quality】OCF of ¥41.2B relative to Net Income of ¥0.4B yields a coverage ratio in excess of 100x, but OCF/EBITDA is 41.1% (EBITDA ¥100.3B), indicating weak cash conversion efficiency. Working capital increases (Accounts Receivable +¥45.1B, Inventories +¥18.5B) were the main drivers. 【Investment Efficiency】Total asset turnover fell to 0.51x (prior year 0.64x), and inventory days are elevated with Work-in-Process ratio 59.8%, suggesting production-demand timing mismatches. 【Financial Soundness】Equity Ratio is 66.4% (prior year 73.8%) and remains high despite the decline. Current ratio 243.7% and Quick ratio 223.1% indicate ample short-term liquidity, but short-term borrowings of ¥115.0B (prior year ¥70.0B) and short-term debt ratio 74.2% reveal concentration. Interest coverage is strong at 41.1x on an Operating Income basis and 59.6x on an EBITDA basis. Cash and deposits totaled ¥284.3B and investment securities ¥75.5B, providing abundant liquidity.
OCF was ¥41.2B (prior year ¥103.7B, -60.3%). Starting from Profit Before Tax ¥70.1B, depreciation of ¥31.2B was added back, while increases in trade receivables -¥30.7B, inventories -¥28.8B, increases in trade payables +¥18.9B, and corporate tax payments -¥30.8B were the main factors. Working capital expansion impaired OCF generation. Investing Cash Flow was -¥55.2B, driven by acquisitions of tangible and intangible assets -¥40.7B and net time deposit placements -¥9.0B. Financing Cash Flow was +¥64.3B, mainly from net increase in short-term borrowings +¥45.0B, proceeds from long-term borrowings ¥50.0B, repayments of long-term borrowings -¥13.7B, and dividend payments -¥15.0B. Consequently, Free Cash Flow turned negative at -¥14.1B and investments and dividends could not be funded from OCF, resulting in dependence on borrowings. Cash and cash equivalents increased by ¥59.9B to ¥263.8B at year-end (beginning of period ¥203.9B), largely due to borrowings and foreign exchange translation adjustments (+¥9.7B).
Earnings are primarily recurring from equipment sales and after-sales services. Special items were net gain ¥0.9B and loss ¥0.3B, with limited impact on Net Income, but the special gain of ¥13.1B from sale of investment securities is temporary. Non-operating income of ¥7.1B (1.3% of Revenue) comprised interest income ¥2.2B and dividend income ¥1.5B, reflecting accumulation of financial income, whereas non-operating expenses ¥6.8B included foreign exchange losses ¥4.6B which increase earnings volatility. The gap between Ordinary Income ¥69.5B and Profit Before Tax ¥70.1B was limited, indicating small impact from special items. Comprehensive income of ¥106.9B far exceeded Net Income ¥0.4B, driven mainly by valuation items such as foreign currency translation adjustments ¥39.0B and valuation differences on available-for-sale securities ¥21.3B. While OCF covers Net Income by 103x in nominal terms, the OCF/EBITDA ratio of 41.1% is low and working capital expansion has reduced cash-generation quality. Accrual accounting discretion appears limited, but cash conversion efficiency remains a concern.
For the fiscal year ending March 2027, the company plans Revenue ¥640.0B (+17.7% YoY), Operating Income ¥102.4B (+48.0% YoY), Ordinary Income ¥102.4B (+47.4% YoY), and Net Income attributable to owners of the parent ¥70.0B (recovering substantially from ¥0.4B). Operating margin is projected at 16.0%, an improvement of 3.3pt from 12.7%, assuming normalization of gross margins and costs. Progress against the full-year plan stands at Revenue 85.0%, Operating Income 67.6%, and Ordinary Income 67.9%; current-year results lag slightly but next year is expected to see revenue and profit growth supported by recovery in demand for semiconductor back-end equipment and inventory normalization. Dividend guidance is undecided (displayed as ¥0), but a review of shareholder returns is expected as profits recover. Achievement of the plan assumes compression of working capital and margin improvements.
Year-end dividend was ¥20 per share, totaling approximately ¥15.0B. The payout ratio was 185.0%, extremely high versus Net Income of ¥0.4B, reflecting the sharp decline in Net Income this term due to special factors; based on historical practice and on an OCF basis the dividend is sustainable. Dividend coverage relative to OCF (¥41.2B) is 2.7x, indicating capacity, but Free Cash Flow is -¥14.1B and continuing both investment and dividends simultaneously requires working capital reduction. Share buybacks were ¥0.0B in effect none, and Total Return Ratio equals the payout ratio. Although prior-year dividend was displayed as ¥0, a dividend total of ¥1,501 million is recorded, indicating a continued dividend policy. In a recovery phase next year there is room for higher dividends, but near-term priority should be cash-flow normalization.
Concentration risk in Semiconductor Manufacturing Equipment: This segment accounts for 91.7% of Revenue and 94.2% of Operating Income, meaning performance is strongly correlated with semiconductor market cycles. Timing mismatches between demand for back-end equipment and customers’ capex cycles increase earnings volatility.
Working capital expansion risk: Inventories ¥56.8B (of which Work-in-Process ratio 59.8%) and Accounts Receivable ¥158.5B have increased, revealing OCF pressure and liquidity risk. Delays in inventory reduction or prolonged receivable collection (DSO extension) could necessitate additional borrowing.
Foreign exchange risk: The company recorded foreign exchange losses of ¥4.6B this period, and comprehensive income includes a foreign currency translation adjustment of ¥39.0B, indicating material FX impact on valuation. With overseas sales ratio of 87.3%, yen moves create a trade-off between revenue increases and FX losses, increasing uncertainty in profit forecasts.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 12.7% | 7.8% (4.6%–12.3%) | +5.0pt |
| Net Margin | 0.1% | 5.2% (2.3%–8.2%) | -5.1pt |
Operating margin exceeds the industry median by 5.0pt, indicating relatively high profitability, but Net Margin at 0.1% lags the median by 5.1pt due to tax burden and non-operating costs (foreign exchange losses) compressing final profits.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 1.7% | 3.7% (-0.4%–9.3%) | -2.0pt |
Revenue growth of 1.7% is 2.0pt below the industry median of 3.7%, reflecting the flat trends in the core equipment business and relative weakness in growth.
※Source: Company compilation
Progress on working capital normalization: Expansion of Accounts Receivable +¥45.1B and Inventories +¥18.5B has pressured OCF and Free Cash Flow. Reduction of inventories (particularly given Work-in-Process ratio 59.8%) and shortening DSO are prerequisites for achieving next year’s guidance and restoring cash-generation. The focus is whether quarterly trends show shortening inventory turnover days and receivables collection days.
Operating margin recovery scenario: The plan to improve Operating margin from 12.7% this year to 16.0% next year (3.3pt improvement) requires both gross margin improvement (cost reductions and product mix normalization) and absorption of fixed costs. Recovery in demand for semiconductor back-end equipment and production smoothing are necessary conditions; order trends and quarterly gross margin progression will be the litmus test for feasibility.
Maintaining financial flexibility: Despite high short-term borrowings ¥115.0B and short-term debt ratio 74.2%, liquidity is secured with cash ¥284.3B and investment securities ¥75.5B. However, to prepare for refinancing risk, conversion to longer-term funding and reducing borrowing dependence via working capital compression are desirable. Interest coverage of 59.6x (EBITDA basis) indicates strong capacity to service interest, and resilience to rising rates is high.
This report was automatically generated by AI analyzing XBRL financial statement disclosure data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company using publicly disclosed financial statements. Investment decisions are your responsibility; consult a professional advisor as needed before making investment decisions.