EBARA JITSUGYO CO.,LTD. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥29.26B
• Operating Income: ¥4.31B
• Net Income: ¥2.17B
• EPS: ¥255.32

Income Statement

Balance Sheet

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

Earnings for FY2025 Q3 show solid top-line and strong bottom-line momentum for 荏原実業株式会社, with revenue up 10.0% year over year to ¥29.26bn and operating income up 42.1% to ¥4.31bn. Profitability has improved meaningfully, as evidenced by a gross profit of ¥8.51bn and an operating margin of roughly 14.7%, indicating operating leverage and cost discipline. Ordinary income reached ¥4.46bn, and net income rose 39.7% YoY to ¥3.04bn, translating into a healthy net margin of 10.38%. DuPont analysis indicates an ROE of 11.58%, driven by a 10.38% net margin, 0.676x asset turnover, and 1.65x financial leverage, a balanced mix for a mid-leverage, improving-margin profile. The company exhibits robust liquidity with a current ratio of 182.6% and a quick ratio of 174.4%, underpinned by sizeable working capital of ¥14.46bn and relatively light inventories of ¥1.43bn. Solvency appears sound with debt-to-equity of 0.75x and exceptionally high interest coverage of 861.6x, reflecting minimal interest burden relative to operating earnings. Operating leverage is evident: a 10% revenue increase yielded a 42% operating income increase, implying SG&A efficiencies or mix improvements. Margin quality looks favorable given the spread between gross and operating margins and the limited drag from financial costs. The reported effective tax expense of ¥1.00bn suggests a normalized tax rate in the mid-20% range when compared to pre-tax earnings, consistent with domestic benchmarks. Cash flow data (OCF, FCF, financing flows) are not disclosed, limiting an assessment of earnings-to-cash conversion; consequently, OCF/NI and FCF-based conclusions are not inferable from this disclosure. Dividend figures (DPS and payout) are also not provided at this stage, so dividend sustainability must be inferred from earnings power and balance-sheet strength rather than cash distributions. Share count and per-share book value are undisclosed, although EPS is provided at ¥255.32, which supports the view of solid per-share profitability. Capital structure and liquidity metrics indicate capacity to navigate working capital needs typical of project and equipment businesses. Overall, the company’s YTD trajectory points to improved profitability, strong cost control, and low financial risk, albeit with incomplete cash flow and capital allocation visibility at this point in the fiscal year. Key watch items include order intake/backlog, cash collection on projects, and the cadence of SG&A and procurement costs through the fiscal year-end. Given the data limitations (notably cash flow, dividends, and share base details), conclusions are based on the available non-zero line items and derived ratios.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 10.38%
• asset_turnover: 0.676x
• financial_leverage: 1.65x
• calculated_ROE: 11.58%
• commentary: ROE is primarily supported by a healthy net margin and moderate leverage; asset turnover is moderate for an engineered equipment/project-oriented business. margin_quality:
• gross_profit: ¥8,508m
• gross_margin: 29.1%
• operating_income: ¥4,308m
• operating_margin: 14.7% (approx.)
• net_income: ¥3,037m
• net_margin: 10.38%
• commentary: Improvement in operating income (+42.1% YoY vs +10.0% revenue) points to operating leverage and cost efficiencies. The spread between gross and operating margins suggests controlled SG&A and favorable project mix. operating_leverage:
• revenue_growth_YoY: 10.0%
• operating_income_growth_YoY: 42.1%
• assessment: High positive operating leverage in the period; incremental margins appear strong, indicating fixed-cost dilution or better pricing/mix.

Growth Assessment

revenue_sustainability: Revenue growth of 10.0% YoY is consistent with steady demand; sustainability will depend on order backlog and execution of longer-cycle projects. profit_quality: Net margin at 10.38% with minimal interest expense indicates profits are largely operational. Tax expense of ¥1,001m implies a normalized tax rate, supporting quality of earnings. outlook: Assuming stable demand in core segments and continued cost discipline, margin resilience is plausible into year-end; watch for seasonality in Q4 and project timing effects that can shift revenue and earnings recognition.

Financial Health

liquidity:

• current_assets: ¥31,962m
• current_liabilities: ¥17,506m
• current_ratio: 182.6%
• quick_ratio: 174.4%
• working_capital: ¥14,456m
• inventories: ¥1,426m
• assessment: Strong liquidity with low inventory intensity relative to current assets, supporting project execution and receivables management. solvency_capital_structure:
• total_assets: ¥43,271m
• total_liabilities: ¥19,535m
• total_equity: ¥26,219m
• debt_to_equity: 0.75x
• interest_coverage: 861.6x (Operating income / interest expense)
• assessment: Moderate leverage and negligible interest burden imply low refinancing risk and ample balance sheet flexibility.

Cash Flow Quality

earnings_quality: Cash flow statements are not disclosed in this dataset; therefore, OCF/NI and FCF-based assessments cannot be made from the provided figures. free_cash_flow:

• OCF_reported: Not disclosed
• capex_proxy: Not disclosed (D&A not provided)
• FCF: Not disclosed
• assessment: With OCF and investing flows unreported, we cannot verify conversion of earnings to cash; working capital movements (receivables/payables) could materially influence OCF in a project-heavy model. working_capital_dynamics: High working capital base (¥14.46bn) and low inventories indicate receivables and other current assets are likely the main components; collection efficiency and billing milestones will be key to cash conversion.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are not disclosed for the period; EPS is ¥255.32, suggesting capacity for distribution subject to board policy and cash generation. FCF_coverage: Not assessable due to unreported OCF and capex; dividend coverage cannot be evaluated on a cash basis. policy_outlook: Without dividend guidance, assessment relies on fundamentals: improving profitability, strong liquidity, and low interest burden suggest potential capacity, but confirmation awaits disclosure of cash flows and policy.

Risk Assessment

Business Risks:

• Project timing and acceptance risk affecting revenue recognition and quarterly volatility
• Cost inflation in materials and subcontracting potentially pressuring gross margins
• Customer concentration or public-sector budget cycles impacting order intake
• Execution risk on complex engineered systems and after-sales service delivery
• Supply chain constraints leading to delays or higher procurement costs

Financial Risks:

• Working capital expansion risk reducing operating cash flow despite earnings growth
• Potential credit risk in receivables given large project exposures
• Foreign exchange exposure on imported components or overseas projects (if applicable)
• Interest rate normalization marginally increasing financing costs (albeit currently small)

Key Concerns:

• Lack of disclosed cash flow data restricts verification of earnings-to-cash conversion
• Dividend policy and payout not disclosed, limiting visibility on shareholder returns
• Sensitivity of margins to mix and timing in a project-oriented revenue base

Investment Implications

Key Takeaways:

• Strong margin-driven earnings growth with ROE at 11.58%
• Robust liquidity (current ratio 182.6%, quick ratio 174.4%) and minimal interest burden
• Moderate leverage (D/E 0.75x) supports balance sheet resilience
• Operating leverage evident as operating income growth far outpaces revenue growth
• Cash flow and dividend details are not disclosed, limiting assessment of cash returns

Metrics to Watch:

• Order intake, backlog, and book-to-bill for revenue visibility
• Operating cash flow and receivables turnover for cash conversion
• Gross and operating margin trajectory, including SG&A ratio
• Capex and maintenance spending relative to growth initiatives
• Tax rate normalization and any non-operating gains/losses

Relative Positioning: Within Japan’s industrial equipment/project services cohort, the company currently exhibits above-peer profitability momentum and conservative financing costs, with a balanced leverage profile; key differentiation will hinge on sustaining margin gains and demonstrating consistent cash 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
• 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