FUJITEC CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥115.42B
• Operating Income: ¥11.41B
• Net Income: ¥8.24B
• EPS: ¥117.55

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

Fujitec (64060) delivered solid profitability in FY2026 Q2 despite a slight top-line contraction, with revenue at ¥115.4bn (-1.1% YoY) and operating income up 28.8% to ¥11.41bn. Gross profit of ¥26.67bn implies a gross margin of 23.1%, while the operating margin improved to about 9.9%, underscoring effective cost control, favorable mix, and/or pricing gains. Ordinary income reached ¥12.65bn, reflecting net non-operating gains (ordinary income exceeded operating income by ¥1.24bn) and very low interest burden. Net income rose 11.9% to ¥9.17bn, with EPS of ¥117.55, highlighting resilient bottom-line delivery. The DuPont bridge indicates ROE of 5.53%, driven by a 7.95% net margin, asset turnover of 0.458x, and modest financial leverage of 1.52x. Balance sheet strength is notable: total assets ¥252.0bn and equity ¥166.0bn imply an equity ratio around 65.9% (calculated from the provided totals), aligned with the reported leverage. Liquidity is robust, with a current ratio of 224% and quick ratio of 219%, supported by low inventories (¥4.02bn) relative to current assets. Operating cash flow of ¥11.23bn exceeded net income (OCF/NI 1.22x), indicating reasonable earnings quality; however, investing cash flow and cash balance are unreported, limiting free cash flow assessment. Financing cash outflow of ¥11.49bn suggests distributions and/or debt reduction, but dividend data are unreported (zeros reflect non-disclosure), so payout characterization is constrained. Interest coverage is strong at 52.6x, and the computed effective tax rate is ~19.8% (¥2.5bn tax on ordinary income), indicating normalized taxation despite the reported 0.0% placeholder. Revenue declined slightly, but profit growth and margin expansion suggest operating leverage and mix improvements, potentially from service and modernization contributions. Working capital remains ample at ¥108.2bn, providing flexibility for procurement, installation schedules, and service parts provisioning. While the installed base-driven service business likely supports recurring cash generation, order intake, backlog, and regional mix are not disclosed, limiting visibility on forward growth sustainability. Overall, the company appears financially sound with improving profitability metrics, but incomplete disclosures (notably cash, investing CF, dividends, and share count) constrain the depth of certain ratio and payout analyses.

Profitability Analysis

ROE is 5.53%, decomposed into a 7.95% net profit margin, 0.458x asset turnover, and 1.52x financial leverage (Assets/Equity). Operating margin is approximately 9.9% (¥11.41bn / ¥115.42bn), marking a significant YoY expansion given operating income rose 28.8% on a 1.1% revenue decline. Gross margin sits at 23.1%, implying better cost absorption and/or pricing; the spread between gross and operating margins (~13.2pp) reflects selling and administrative efficiency gains. EBITDA was ¥13.70bn, yielding an 11.9% EBITDA margin; D&A of ¥2.29bn suggests a relatively asset-light profile for a machinery/equipment maker, supporting returns. Ordinary income exceeded operating income by ¥1.24bn, indicating positive non-operating contributions (e.g., FX, dividends, or equity-method income), while interest expense is small at ¥0.22bn. Interest coverage is very strong at 52.6x, confirming low financial drag. The effective tax rate is ~19.8% (¥2.5bn / ¥12.65bn), roughly consistent with normalized levels; the listed 0.0% is an undisclosed placeholder. Operating leverage appears favorable: earnings expanded despite slightly lower sales, pointing to cost discipline and/or richer service and modernization mix. Margin quality looks improved given OCF/NI at 1.22x, supporting the conversion of accounting profit into cash.

Growth Assessment

Top-line declined 1.1% YoY to ¥115.4bn, suggesting stable demand with potential regional or project timing effects. Profit growth outpaced revenue, with operating income up 28.8% and net income up 11.9%, indicating mix and efficiency gains. The positive non-operating result (ordinary > operating by ¥1.24bn) contributed to overall growth, though its sustainability depends on drivers such as FX, security valuations, or equity-method income, which are undisclosed. Service and modernization likely supported resilience, but the lack of segment and geographic disclosure limits attribution. Revenue sustainability hinges on order intake and backlog trends, which are not provided; large project phasing can introduce volatility. The improved margin profile suggests better price-cost dynamics and cost control, which, if maintained, can underpin mid-term earnings stability even in a flat revenue environment. Asset turnover at 0.458x is moderate and typical for the sector; further working-capital optimization could support incremental growth in returns. Outlook-wise, the strong balance sheet offers capacity to invest in modernization, safety upgrades, and maintenance networks, supporting medium-term growth. However, absent visibility on capex plans (investing CF undisclosed) and pipeline, growth projections remain constrained.

Financial Health

Total assets are ¥252.0bn, liabilities ¥91.6bn, and equity ¥166.0bn, implying an equity ratio of ~65.9% (calculated) and leverage of 1.52x (Assets/Equity). The debt-to-equity ratio is 0.55x, indicating conservative leverage. Liquidity is strong: current ratio 224%, quick ratio 219%, with inventories at just ¥4.02bn relative to current assets of ¥195.4bn, highlighting limited inventory risk and a likely receivables/cash-heavy current asset mix. Working capital stands at ¥108.2bn, providing ample cushion for project execution and service operations. Interest expense is modest at ¥0.22bn, and interest coverage of 52.6x indicates ample capacity to service debt. Cash and equivalents are undisclosed (reported as 0), so net cash/(debt) cannot be determined precisely, but low leverage and strong liquidity suggest a likely net cash or low-net-debt position. The solidity of equity and liquidity buffers reduces solvency risk and affords flexibility for strategic investment and shareholder returns.

Cash Flow Quality

Operating cash flow was ¥11.23bn versus net income of ¥9.17bn, yielding OCF/NI of 1.22x, which supports earnings quality and indicates non-cash charges and/or working capital release aided cash conversion. EBITDA of ¥13.70bn versus OCF of ¥11.23bn suggests reasonable cash conversion after working capital needs. Investing cash flow is undisclosed (reported as 0), preventing the calculation of free cash flow and limiting insight into organic reinvestment intensity (capex) versus M&A. Consequently, reported FCF of 0 is a placeholder; true FCF cannot be assessed with the given data. Working capital appears well managed given high liquidity metrics; however, without detailed receivables, payables, and inventory turns, we cannot parse cash cycle dynamics. Financing cash flow was an outflow of ¥11.49bn, likely reflecting dividends, share repurchases, and/or debt repayment; the exact mix is not disclosed. Overall, cash flow quality looks sound from an OCF standpoint, but full FCF quality assessment is constrained by missing investing cash flow details and cash balance data.

Dividend Sustainability

Dividend per share and payout ratio are reported as 0.00 and 0.0%, respectively, but these represent undisclosed items rather than actual zeros; therefore, we cannot evaluate realized distributions. With EPS at ¥117.55 and OCF of ¥11.23bn exceeding net income, underlying capacity to fund dividends appears adequate, contingent on capex and strategic investment needs (investing CF is undisclosed). Financing outflows of ¥11.49bn suggest some form of shareholder return and/or debt reduction occurred in the period. Absent actual DPS and capex data, payout ratio assessment and FCF coverage cannot be calculated. Policy outlook cannot be inferred from the provided data; historical policy, if any, is not disclosed here. Qualitatively, the strong balance sheet, low interest burden, and consistent OCF support potential dividend sustainability, but confirmation requires disclosed DPS and investing cash flows.

Risk Assessment

Business Risks:

• Cyclical exposure to construction and capital investment cycles affecting new installations
• Competitive pressure from global elevator/escalator peers and domestic rivals impacting pricing
• Project timing and backlog volatility influencing quarterly revenue recognition
• Input cost inflation and supply chain constraints affecting gross margins
• Foreign exchange fluctuations given overseas exposure impacting revenues and non-operating items
• Regulatory and safety standards changes requiring continuous product and maintenance upgrades
• Mix risk between new equipment and maintenance/modernization affecting margin stability

Financial Risks:

• Limited visibility on cash and equivalents (undisclosed), complicating net cash/(debt) assessment
• Investing cash flows undisclosed, obscuring capex intensity and free cash flow
• Potential volatility in non-operating income (FX, securities, equity-method) that lifted ordinary income
• Receivables concentration and collection risks typical for project-based businesses
• Tax rate variability across jurisdictions (computed ~19.8%) potentially impacting net income

Key Concerns:

• Revenue contracted slightly while profits rose; sustainability of margin gains needs monitoring
• Non-operating contributions were material; repeatability is uncertain without detail
• Insufficient disclosure on DPS, cash, and capex limits payout and FCF analysis

Investment Implications

Key Takeaways:

• Operating leverage and mix improvements drove a 28.8% YoY increase in operating income despite -1.1% revenue
• ROE at 5.53% reflects healthy margins and low leverage; scope exists to enhance returns via margin and asset efficiency
• Liquidity and solvency are strong (current ratio 224%, D/E 0.55x), supporting strategic flexibility
• OCF/NI of 1.22x indicates decent earnings quality; full FCF cannot be assessed due to undisclosed investing CF
• Non-operating gains boosted ordinary income; underlying sustainability needs verification

Metrics to Watch:

• Order intake and backlog for visibility on future revenue
• Service and modernization revenue mix and gross margin
• Price-cost spread (material/labor inflation vs. pricing)
• Working capital metrics (DSO, DPO, inventory days) and OCF/NI
• Capex and investing cash flows to gauge FCF and reinvestment
• FX impacts on revenue and non-operating items
• ROE trajectory and operating margin sustainability

Relative Positioning: Within the machinery/elevator peer set, Fujitec exhibits strong balance sheet resilience, solid cash generation at the operating level, and improving margins, though its ROE (5.5%) remains moderate versus best-in-class peers; incomplete disclosures limit precise benchmarking on FCF and shareholder returns.

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