OGURA CLUTCH CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥20.55B
• Operating Income: ¥512M
• Net Income: ¥290M
• EPS: ¥156.80

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

Ogura Clutch (6408) reported FY2026 Q2 consolidated results under JGAAP showing resilient operating execution against a softer top line. Revenue declined 6.7% YoY to ¥20.55bn, but operating income surged 124.9% YoY to ¥0.51bn, indicating effective cost control and/or mix improvement. Gross profit was ¥3.37bn with a margin of 16.4%, and operating margin improved to 2.5%, highlighting better operating leverage despite lower sales. Ordinary income was ¥0.38bn and net income was ¥0.23bn, with net margin of 1.14%, reflecting pressure from non-operating expenses (notably interest expense of ¥0.16bn) and taxes/extraordinary items. EBITDA reached ¥1.44bn (7.0% margin), supported by sizable depreciation and amortization of ¥0.93bn, which suggests ongoing capital intensity but also cushions cash earnings. ROE based on DuPont is low at 1.37%, driven by thin net margin (1.14%) and modest asset turnover (0.463), partially offset by financial leverage of 2.60x. Liquidity is adequate with a current ratio of 141% and quick ratio of 121%, supported by current assets of ¥31.12bn against current liabilities of ¥22.09bn. The balance sheet shows total equity of ¥17.09bn; while an equity ratio was not disclosed (reported as 0%), our estimate suggests around 38.5% (equity/total assets), indicating a balanced but leveraged capital structure. Operating cash flow was solid at ¥1.11bn, 4.7x net income, implying good earnings-to-cash conversion and working capital discipline in the period. Financing cash flow was an outflow of ¥1.70bn, likely reflecting debt service and/or other financing uses; dividends were not paid (DPS ¥0). Investing cash flow and cash balance were not disclosed (zeros indicate unreported), limiting visibility into capex and net cash/debt. Net income declined 19.1% YoY despite the operating rebound, implying non-operating and tax headwinds; the disclosed effective tax rate metric appears inconsistent with the reported tax expense, suggesting classification effects or extraordinary items under JGAAP. Overall, the company is demonstrating improved operating efficiency and cash generation, but profitability remains modest and interest burden meaningful. Inventory stands at ¥4.41bn, a manageable level relative to scale, but ongoing monitoring of working capital is warranted given the cyclical end markets. The absence of dividends aligns with a focus on internal funding and balance sheet maintenance amid an uncertain demand backdrop. Data gaps (investing CF, cash balance, equity ratio, share count) limit full precision, but the available metrics support a view of stabilizing operations with cautious financial flexibility.

Profitability Analysis

ROE_decomposition: DuPont indicates ROE of 1.37% = Net margin 1.14% × Asset turnover 0.463 × Financial leverage 2.60. The primary drag is a low net margin, with asset efficiency also moderate. Leverage provides only a limited boost. margin_quality: Gross margin 16.4% and operating margin 2.5% suggest improved cost control YoY (OI +124.9% on -6.7% revenue) but still thin profitability. Ordinary margin of 1.83% and net margin of 1.14% reflect non-operating costs (interest ¥156m) and tax/extraordinary effects. EBITDA margin 7.0% points to acceptable cash operating earnings amid high depreciation (¥928m). operating_leverage: Material positive operating leverage is evident: a 6.7% revenue decline coincided with more than doubling of operating profit, implying strong fixed cost absorption improvements and/or product mix and pricing discipline. Sustainability depends on demand normalization and continued SG&A control.

Growth Assessment

revenue_sustainability: Revenue fell 6.7% YoY to ¥20.55bn, consistent with cyclical softness in core end markets. No disclosure on order backlog or regional mix limits a more granular read on sustainability. profit_quality: Operating income improvement despite revenue decline suggests underlying efficiency gains; however, the reliance on cost actions and mix may face headwinds if volumes weaken further. Net income deterioration (-19.1% YoY) highlights sensitivity to interest expense and tax/extraordinary items. outlook: Near-term outlook hinges on automotive/industrial demand recovery and raw material cost trends. Continued margin discipline and potential normalization of non-operating items could support profit stabilization, but visibility is constrained by missing investing CF and cash data.

Financial Health

liquidity: Current assets ¥31.12bn vs current liabilities ¥22.09bn yield a current ratio of 140.9% and quick ratio of 120.9%, indicating adequate short-term coverage. Working capital is ¥9.03bn, providing a buffer for operations. solvency: Total equity ¥17.09bn against total assets ¥44.42bn implies an estimated equity ratio of ~38.5% (reported equity ratio not disclosed). Debt-to-equity is 1.72x, and interest coverage (EBIT/interest) is ~3.3x, indicating manageable but non-trivial leverage and interest burden. capital_structure: Financial leverage (assets/equity) at 2.60x supports ROE but tightens headroom if earnings weaken. Financing cash outflows of ¥1.70bn suggest ongoing debt service or balance sheet actions; absence of cash balance disclosure prevents net debt assessment.

Cash Flow Quality

earnings_quality: OCF of ¥1.105bn versus net income of ¥234m (OCF/NI = 4.72x) indicates strong conversion, likely aided by working capital inflows and non-cash D&A (¥928m). FCF_analysis: Free cash flow cannot be determined due to undisclosed investing cash flows and capex (reported as zero indicates unreported). EBITDA of ¥1.44bn provides capacity for maintenance capex, but net FCF direction is unclear. working_capital: Inventories at ¥4.41bn appear reasonable relative to scale; improved OCF suggests favorable working capital movements in the half. Monitoring receivables collection and inventory turns remains important given the cyclical environment.

Dividend Sustainability

payout_ratio_assessment: Annual DPS is ¥0 and payout ratio 0.0%, consistent with a conservative stance given modest profitability (net margin 1.14%) and leverage. FCF_coverage: Not assessable due to unreported investing CF and capex; while OCF is positive, the ability to fund dividends from FCF cannot be confirmed. policy_outlook: Given focus on operating improvement and financing outflows, a maintained prudent dividend stance appears likely until profitability and cash flow visibility improve. Data limitations (no cash balance) temper confidence in any near-term change.

Risk Assessment

Business Risks:

• Demand cyclicality in automotive and industrial end markets
• Electrification reducing mechanical clutch demand over time
• Raw material price volatility (e.g., steel) impacting margins
• Customer concentration with OEMs and tiered supply chains
• FX exposure on exports and imported components
• Supply chain disruptions affecting delivery and inventory

Financial Risks:

• Moderate leverage (D/E 1.72x) and interest burden (coverage ~3.3x)
• Potential refinancing risk if credit conditions tighten
• Working capital swings in downturns impacting OCF
• Limited visibility on cash balance and capex, constraining liquidity analysis
• Tax/extraordinary item volatility under JGAAP affecting bottom line

Key Concerns:

• Low ROE (1.37%) driven by thin net margins
• Negative YoY net income despite strong operating rebound
• Unreported investing CF and cash balance limiting assessment of FCF and liquidity
• Sustainability of cost-driven operating gains if volumes remain soft

Investment Implications

Key Takeaways:

• Operating margin recovery despite a 6.7% revenue decline demonstrates cost discipline
• Net margin remains low at 1.14%, keeping ROE subdued at 1.37%
• Liquidity adequate (current ratio 141%, quick ratio 121%), but leverage and interest costs are meaningful
• OCF robust at ¥1.105bn (4.7x net income), indicating solid cash conversion
• Data gaps (capex, cash, equity ratio disclosure) constrain full valuation of financial flexibility

Metrics to Watch:

• Order trends and backlog in automotive/industrial segments
• Capex and investing cash flows; capex-to-depreciation ratio
• Net debt and interest coverage trajectory
• Gross and operating margin sustainability amid input cost moves
• Working capital turns (DSO, DIO, DPO) and OCF consistency
• Extraordinary items and effective tax rate normalization

Relative Positioning: Within Japan small/mid-cap auto parts and machinery peers, Ogura Clutch shows improving operating execution but below-average profitability and ROE, with moderate leverage and adequate liquidity; stronger disclosure on cash and capex would improve comparability.

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