SHIBAURA MECHATRONICS CORPORATION FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥42.28B
• Operating Income: ¥7.57B
• Net Income: ¥4.10B
• EPS: ¥405.30

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

Shibaura Mechatronics (6590) delivered a solid FY2026 Q2 consolidated performance under JGAAP, with top-line growth translating into stronger operating leverage. Revenue rose 16.2% year over year to ¥42.3bn, while operating income increased 31.7% to ¥7.6bn, indicating good cost control and scale benefits. Gross margin stood at 33.2%, and operating margin at roughly 17.9%, both consistent with a high-value equipment/manufacturing profile. Net income increased 29.7% to ¥5.3bn, lifting the net margin to 12.6%. DuPont analysis shows ROE of 10.86%, driven by a 12.6% net margin, 0.44x asset turnover, and 1.96x financial leverage. Ordinary income (¥7.37bn) trailed operating income modestly, implying limited non-operating drag and very low interest burden. EBITDA of ¥8.81bn (20.8% margin) and interest coverage of 194x underscore strong operating earnings and minimal financing risk. Liquidity appears robust with a current ratio of 191% and quick ratio of 186%, supported by sizable working capital of ¥35.4bn. The balance sheet shows total assets of ¥96.0bn and equity of ¥48.9bn, suggesting moderate leverage; the provided debt-to-equity ratio of 0.98x likely reflects total liabilities as a proxy for debt. Operating cash flow was ¥4.56bn, approximately 0.86x of net income, which is acceptable for H1 but indicates some cash conversion friction, likely from working capital. Investing cash flow was reported as zero and cash and equivalents were reported as zero; per instruction, these represent non-disclosure in XBRL rather than actual zero and limit free cash flow assessment. Dividend-related fields (DPS, payout, FCF coverage) are also reported as zero/unavailable and should not be interpreted as no dividend policy. Equity ratio was listed as 0.0%, which is clearly unreported given the disclosed equity base. On balance, profitability improved meaningfully, financial risk is low, and liquidity is ample, but cash flow quality and dividend sustainability cannot be fully assessed due to undisclosed items. The year-to-date momentum suggests healthy demand and execution, with operating leverage as a key driver. Data caveats include missing investing CF, cash balance, share data, and equity ratio, which constrain fuller evaluation of capital allocation and per-share metrics.

Profitability Analysis

ROE_decomposition: ROE 10.86% = Net Margin 12.58% x Asset Turnover 0.440x x Financial Leverage 1.96x. Net margin strength is the primary driver, with moderate asset turns and modest leverage contributing. margin_quality: Gross margin 33.2% and operating margin ~17.9% (¥7.57bn/¥42.28bn) indicate a healthy value-add mix and disciplined opex. Ordinary income (¥7.37bn) is slightly below operating income, implying small non-operating net expenses; interest cost is negligible (¥39m), so non-op headwinds are limited. operating_leverage: Revenue +16.2% YoY with operating income +31.7% YoY demonstrates positive operating leverage, suggesting fixed-cost absorption and/or richer mix. EBITDA margin of 20.8% provides cushion against volume variability.

Growth Assessment

revenue_sustainability: Top-line growth of 16.2% YoY is robust for H1; sustainability will depend on order intake and delivery schedules in subsequent quarters (not disclosed). profit_quality: Net margin at 12.6% and interest coverage at 194x point to high-quality earnings with minimal financial noise. The gap between operating and ordinary income is small, suggesting limited reliance on non-core gains. outlook: Assuming stable demand and execution, the company appears on track for a stronger full-year vs. prior year, aided by operating leverage. However, absence of backlog/order data and undisclosed cash/investing flows temper conviction on durability of growth.

Financial Health

liquidity: Current ratio 191.4%, quick ratio 185.6%, and working capital ¥35.41bn indicate strong short-term solvency and inventory-light working capital (inventories ¥2.27bn). solvency: Total liabilities ¥47.93bn and total equity ¥48.94bn imply moderate leverage; the supplied D/E of 0.98x (liabilities/equity proxy) suggests manageable balance sheet risk. Interest expense is very low, and coverage is 194x, supporting solvency. capital_structure: Equity ratio was reported as 0.0% but is clearly undisclosed; based on totals, the implied equity/asset ratio is roughly 51% (¥48.94bn/¥95.99bn), indicating a conservative structure. Lack of cash balance disclosure limits assessment of net debt.

Cash Flow Quality

earnings_quality: Operating CF of ¥4.56bn vs net income of ¥5.32bn yields OCF/NI of 0.86, acceptable but below 1, implying some working capital outflow or timing effects in H1. FCF_analysis: Investing CF is undisclosed (reported as 0), so free cash flow cannot be reliably computed and the listed FCF of 0 should not be interpreted as actual. Capex intensity and R&D cash spend cannot be assessed from the provided data. working_capital: Strong quick ratio suggests limited inventory dependence (inventories ¥2.27bn). The OCF/NI shortfall likely reflects receivables or advance payments dynamics, but specific drivers are not disclosed.

Dividend Sustainability

payout_ratio_assessment: Reported payout ratio 0.0% and DPS 0.00 are undisclosed placeholders and should not be taken as policy changes. With net income of ¥5.32bn and healthy margins, capacity for distribution exists in principle, pending visibility on cash and capex. FCF_coverage: FCF coverage cannot be assessed due to undisclosed investing CF and cash balance; the reported 0.00x is not meaningful. policy_outlook: Absent disclosure on DPS/interim dividends and capital allocation, dividend trajectory cannot be determined. Strength in earnings and liquidity supports optionality, but confirmation requires full cash and investment data.

Risk Assessment

Business Risks:

• Demand cyclicality in capital goods/end markets affecting orders and utilization
• Project timing and revenue recognition risk across quarters
• Supply chain constraints or component availability impacting deliveries and margins
• Pricing pressure and competitive intensity in key product lines
• Customer concentration risk typical for equipment suppliers

Financial Risks:

• Working capital volatility affecting cash conversion (OCF/NI at 0.86 in H1)
• Limited visibility on cash balances and investing CF, constraining net leverage assessment
• Potential FX exposure in procurement or exports influencing margins
• Concentration of liabilities vs. equity (D/E proxy 0.98x) if debt-like obligations rise

Key Concerns:

• Missing disclosures: cash and equivalents, investing cash flows, equity ratio, DPS/shares
• Sustainability of operating leverage without confirmed order backlog
• H1 cash conversion below earnings despite strong profitability

Investment Implications

Key Takeaways:

• Strong YoY margin expansion with operating margin ~17.9% and EBITDA margin 20.8%
• ROE at 10.86% supported by healthy net margin and moderate leverage
• Low financial risk with 194x interest coverage and robust liquidity (QR 186%)
• OCF trails net income (0.86x), suggesting working capital drag in H1
• Incomplete cash and dividend disclosures constrain assessment of FCF and payout capacity

Metrics to Watch:

• Order intake/backlog and book-to-bill to gauge revenue sustainability
• OCF/NI and working capital turns for cash conversion
• Capex and investing cash flows to determine true FCF
• Gross and operating margins to monitor mix and cost discipline
• Net cash/debt once cash balances are disclosed

Relative Positioning: Within Japanese industrial/precision equipment peers, the company exhibits above-average profitability and strong liquidity with low interest burden, but visibility on FCF and capital returns is lower due to undisclosed cash/investing data.

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