GS Yuasa Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥272.15B
• Operating Income: ¥18.72B
• Net Income: ¥11.04B
• EPS: ¥104.33

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend 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

GS Yuasa Corporation (6674) reported FY2026 Q2 (cumulative) consolidated results with steady topline growth and stronger operating profitability, but softer operating cash conversion. Revenue rose 2.9% YoY to ¥272.2bn, while operating income increased 19.1% YoY to ¥18.7bn, lifting operating margin to 6.9%. Gross profit of ¥60.0bn implies a 22.1% gross margin, indicating improved pricing and/or input cost normalization versus the prior year. Ordinary income was ¥17.3bn and net income ¥10.5bn, up 11.2% YoY, with net margin at 3.85%. EBITDA reached ¥30.2bn (11.1% margin), providing a comfortable 9.2x EBIT-based interest coverage against ¥2.0bn interest expense. Balance sheet strength is solid: total assets are ¥684.5bn, equity ¥397.9bn, and liabilities ¥302.8bn, implying a conservative leverage profile (assets/equity 1.72x; liabilities/equity 0.76x). Liquidity is healthy with a current ratio of 171.9% and quick ratio of 135.6%, supported by working capital of ¥133.9bn. Operating cash flow of ¥5.1bn was weak relative to net income (OCF/NI 0.48x), suggesting working capital absorption or timing effects in the half. Free cash flow cannot be assessed because investing cash flow was not disclosed in this data extract; therefore, reported FCF = 0 should be treated as unreported. DuPont analysis shows ROE of 2.63% based on the period figures (net margin 3.85%, asset turnover 0.398x, financial leverage 1.72x), which may understate full-year profitability given half-year denominator effects. The reported equity ratio is shown as 0.0% in the dataset but appears unreported; a computed proxy equity ratio is approximately 58.1% (equity/total assets), indicating strong solvency. Dividend data are not disclosed here (DPS and payout shown as 0 are placeholders), so distribution policy progress cannot be evaluated from this extract. Overall, the company is demonstrating operating profit recovery on modest revenue growth, backed by a robust balance sheet and adequate interest coverage. Key watchpoints include cash conversion, inventory management, and any forthcoming capex for growth areas (e.g., lithium and industrial battery capacity). FX, raw material pass-through, and product mix (automotive vs. industrial/ESS) will remain determinant for margin sustainability in 2H. Data limitations (notably cash, investing CF, dividend, equity ratio, and share count) constrain precision on cash returns and per-share metrics.

Profitability Analysis

ROE decomposition (DuPont) indicates: net profit margin 3.85% x asset turnover 0.398x x financial leverage 1.72x = 2.63% ROE for the period. Operating margin improved to 6.9% (¥18.7bn EBIT on ¥272.2bn revenue), outpacing revenue growth, evidencing positive operating leverage. Gross margin of 22.1% signals a healthier price-cost balance versus prior year; combined with EBITDA margin of 11.1%, this suggests decent cost discipline and overhead absorption. Ordinary margin of 6.35% reflects limited non-operating drag, with interest expense of ¥2.0bn well covered (9.2x EBIT/interest). Net margin at 3.85% trails operating margin due to taxes and non-operating/minority factors; reported income tax of ¥3.29bn implies additional below-ordinary adjustments or minority interests. Margin quality appears to benefit from mix and pass-through, but sustainability hinges on raw material stability (lead, lithium) and FX. Given asset turnover of 0.398x on a half-year basis, efficiency metrics are depressed versus a full-year view; normalization would likely improve ROE on an annualized basis. Overall, profit trajectory is improving with operating leverage evident, though bottom-line leverage is moderated by financial and tax items.

Growth Assessment

Topline growth of 2.9% YoY is modest but positive amid automotive and industrial battery demand normalization. Operating income growth of 19.1% YoY materially outpaced revenue, pointing to mix/pricing improvements and cost relief. Net income grew 11.2% YoY, lagging EBIT due to non-operating/tax/minority effects. The uplift in EBITDA suggests recovering capacity utilization and better overhead absorption. Revenue sustainability will depend on aftermarket automotive batteries, industrial/ESS projects, and export-driven demand sensitive to FX. Pricing discipline and raw material pass-through mechanisms appear to be holding, which supports margin durability if commodity volatility remains contained. Outlook into 2H turns on seasonality (auto aftermarket), order momentum in industrial/ESS, and any new program launches. Without order backlog and segment disclosure here, we assume growth is broad-based but modest, with profit quality improving on structural efficiency gains. If mix shifts further toward higher value lithium/industrial systems, medium-term margins could trend higher, albeit with higher capex requirements. External risks include OEM production variability, energy storage competition, and regulatory changes in battery safety and recycling. Near-term, management’s ability to sustain the current operating margin near 7% will be a key marker for FY performance.

Financial Health

Liquidity is strong: current assets ¥320.2bn vs current liabilities ¥186.3bn yields a current ratio of 171.9%, and a quick ratio of 135.6% after inventories (¥67.7bn). Working capital stands at ¥133.9bn, providing a cushion against demand variability and procurement cycles. Solvency is solid with liabilities/equity of 0.76x and an implied equity ratio of roughly 58.1% (equity/asset), despite the dataset showing equity ratio as 0.0% (unreported). Interest coverage is comfortable at 9.2x EBIT/interest, indicating low refinancing stress under current earnings power. Total assets are ¥684.5bn and equity is ¥397.9bn, translating to moderate financial leverage (assets/equity 1.72x). No cash and equivalents were disclosed in this extract (shown as 0, likely unreported), so near-term cash buffers cannot be quantified here. Overall, the capital structure is conservative, providing flexibility to fund working capital and selective growth investment.

Cash Flow Quality

Operating cash flow was ¥5.1bn versus net income of ¥10.5bn, implying OCF/NI of 0.48x, which is weak for the half and suggests working capital build or timing of receipts/payables. Without investing cash flow disclosure (shown as 0, unreported), free cash flow cannot be reliably calculated from this extract; reported FCF of 0 should be treated as missing. EBITDA of ¥30.2bn relative to OCF indicates cash conversion headwinds, potentially from inventory and receivable increases or one-off items. The inventory balance is ¥67.7bn; absent prior-period data, we cannot determine the direction of inventory days, but the low OCF hints at WC absorption. Financing cash flow is positive at ¥19.2bn, which could reflect borrowings or other financing inflows; dividend and share data are unreported here. Earnings quality is acceptable at the operating level (improving margins), but cash realization needs to improve in 2H to underpin capital allocation and potential distributions. Key to watch are OCF/NI normalization, working capital turns (inventory and receivables), and capex once disclosed.

Dividend Sustainability

Dividend data are not disclosed in this extract (Annual DPS and payout shown as 0 indicate unreported, not actual zero). Historically, the company has maintained regular dividends, but we cannot infer current policy or payout level from this dataset. With net income of ¥10.5bn and solid balance sheet metrics, capacity for ordinary dividends would typically hinge on free cash flow after capex; however, investing CF and capex are not provided, preventing FCF coverage analysis. Interest coverage is robust and leverage moderate, supporting potential distributions if cash generation normalizes. In the absence of FCF data, we cannot assess payout ratio or FCF coverage rigorously for FY2026 Q2. Policy outlook remains indeterminate from this data; monitor management guidance, dividend declarations, and year-end cash flow statements.

Risk Assessment

Business Risks:

• Raw material price volatility (lead, lithium, nickel, cobalt) affecting margin pass-through
• Automotive demand cyclicality and aftermarket variability impacting volumes
• FX fluctuations (JPY vs USD/EUR/ASEAN currencies) influencing revenue and input costs
• Technology transition risks in lithium-ion and energy storage markets
• Competitive pressure in industrial batteries and ESS from global peers
• Product quality, safety, and recall risks inherent to batteries
• Regulatory and environmental compliance (recycling, emissions, safety standards)
• Supply chain disruptions and logistics costs

Financial Risks:

• Weak H1 cash conversion (OCF/NI 0.48x) indicating working capital sensitivity
• Potential capex intensity for growth in lithium/ESS, affecting FCF
• Interest rate and credit market risks, though current coverage is strong
• Exposure to JV/affiliate performance and minority interests
• Pension/retirement benefit obligations (not disclosed here) potentially impacting equity

Key Concerns:

• Sustainability of improved operating margin amid commodity and FX volatility
• Low reported ROE (2.63%) on period figures; requires 2H improvement to meet return targets
• OCF weakness versus earnings; need for normalization in inventory and receivables
• Limited visibility on capex and investing cash flows restricting FCF assessment

Investment Implications

Key Takeaways:

• Revenue up 2.9% YoY with operating income up 19.1% YoY; operating margin improved to 6.9%
• EBITDA margin at 11.1% and 9.2x interest coverage reflect resilient operating profile
• Balance sheet conservative with implied equity ratio ~58% and liabilities/equity 0.76x
• Cash conversion soft (OCF/NI 0.48x); working capital likely absorbed cash in H1
• ROE at 2.63% on period figures; annualization and better asset turns needed for improvement
• Dividend and investing cash flow data unreported; FCF and payout not assessable from this extract

Metrics to Watch:

• Operating margin and EBITDA margin sustainability in 2H
• OCF/Net income ratio and free cash flow once investing CF is disclosed
• Inventory and receivable days, and overall working capital turns
• Capex levels and project pipeline in lithium/industrial/ESS
• FX rates and raw material price indices (lead, lithium carbonate)
• Interest coverage and net debt trajectory (upon cash disclosure)

Relative Positioning: Within the Japanese battery and industrial power peers, GS Yuasa exhibits stronger balance sheet conservatism and adequate operating margins, but current period ROE and cash conversion trail what is typically required for best-in-class returns; sustained margin execution and improved working capital efficiency would be needed to close the gap.

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