TAMURA CORPORATION FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥58.19B
• Operating Income: ¥2.88B
• Net Income: ¥936M
• EPS: ¥3.96

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

Tamura Corporation (TSE:6768) delivered solid top-line growth and sharp operating profit expansion in FY2026 Q2 under JGAAP, but bottom-line profitability deteriorated due to non-operating burdens and below-the-line items. Revenue rose 10.9% year over year to ¥58.2bn, while operating income surged 73.7% to ¥2.88bn, expanding the operating margin to roughly 5.0%. Gross profit of ¥13.98bn implies a gross margin of 24.0%, indicating stable-to-improving cost pass-through and/or product mix. Ordinary income of ¥2.58bn trailed operating income, suggesting net non-operating costs—most visibly interest expense of ¥509m—dampened earnings. Net income fell 66.1% YoY to ¥319m, compressing the net margin to 0.55% despite stronger operations. The ROE calculated via DuPont stands at 0.53%, driven by a low net margin, moderate asset turnover (0.475x), and financial leverage of roughly 2.0x. Liquidity remains sound with a current ratio of 178.5% and a quick ratio of 158.1%, supported by working capital of ¥34.57bn. The balance sheet appears balanced: total assets are ¥122.55bn and total equity is ¥60.54bn, implying an equity ratio of about 49% (the reported 0.0% equity ratio is not disclosed and should not be taken as actual). Interest coverage is adequate at about 5.7x (EBIT/interest), though rising finance costs remain a headwind to ordinary income. Cash flow statement items (OCF, investing CF, financing CF) and depreciation/amortization are not disclosed in the provided data, limiting assessment of earnings quality and capital intensity. Dividend data is also not disclosed; DPS and payout are shown as zero placeholders and should not be interpreted as actual. Operating leverage clearly improved this quarter as operating profit grew much faster than revenue, suggesting good cost control and scale benefits. However, the disconnect between operating income strength and net income weakness indicates either one-off items, FX/valuation losses, higher tax burden, or minority interests weighing on the bottom line. Asset efficiency at 0.475x turnover is middling for an electronics/materials manufacturer and remains a structural lever for ROE improvement. Overall, the quarter underscores improving core operations but highlights the need to contain non-operating drag and clarify cash flow and capex trajectories.

Profitability Analysis

ROE_decomposition: ROE 0.53% = Net margin 0.55% x Asset turnover 0.475x x Leverage 2.02x. The principal ROE constraint is the very low net margin, despite improved operating profitability. margin_quality: Gross margin at 24.0% appears healthy and consistent with value-added components/materials. Operating margin is ~4.96% (¥2.884bn / ¥58.189bn), up markedly vs the estimated ~3.2% in the prior-year period, demonstrating better pricing, mix, and/or cost discipline. The deterioration from operating to ordinary income reflects non-operating expenses (notably ¥509m interest). The sharp drop to a 0.55% net margin indicates below-the-line pressures such as taxes, extraordinary items, FX effects, or minority interests; tax expense of ¥526m is material relative to net income. operating_leverage: Revenue grew 10.9% YoY while operating income rose 73.7% YoY, indicating strong operating leverage and cost absorption benefits. The ~1.8pp expansion in operating margin versus the prior-year level (estimated) implies scale efficiencies and/or improved procurement and SG&A control.

Growth Assessment

revenue_sustainability: Top-line growth of 10.9% YoY is robust for the sector, suggesting favorable demand in key end-markets (power electronics, components, materials). Sustainability will depend on backlog, pricing retention, and macro/FX conditions, which are not disclosed here. profit_quality: Core profit quality improved at the operating level (margin expansion), but the translation to net profit is weak due to non-operating and below-the-line impacts. Without depreciation/capex and OCF disclosure, we cannot validate whether margin gains are supported by cash conversion or temporary mix/pricing dynamics. outlook: If operating discipline persists and non-operating burdens stabilize, ordinary and net margins should normalize upward. Key swing factors include interest costs, FX volatility, and any one-off items. Absent CF and D&A data, near-term visibility on sustainable EPS acceleration is limited.

Financial Health

liquidity: Current ratio 178.5% and quick ratio 158.1% indicate ample short-term liquidity. Working capital stands at ¥34.57bn, with inventories at ¥8.997bn (inventory composition/turnover not disclosed). solvency: Total liabilities of ¥60.31bn vs equity of ¥60.54bn imply a liabilities-to-equity ratio of ~1.0x. The inferred equity ratio is about 49.4% (¥60.54bn / ¥122.55bn), indicating a moderately conservative capital structure. capital_structure: Interest expense of ¥509m against EBIT of ¥2.884bn yields ~5.7x coverage—comfortable but sensitive to cyclical swings. Leverage (assets/equity) of 2.02x is moderate. Debt maturity profile and fixed/floating mix are not disclosed.

Cash Flow Quality

earnings_quality: Cash flow data (OCF, investing CF, financing CF) is not disclosed in the provided dataset, limiting assessment of accruals and cash conversion. Depreciation/amortization is also undisclosed, preventing EBITDA analysis and capex intensity benchmarking. FCF_analysis: Free cash flow cannot be determined due to missing OCF and capex. Therefore, we cannot assess FCF coverage of growth investments or debt service. working_capital: With CA of ¥78.61bn and CL of ¥44.04bn, working capital is ample. Inventories at ¥8.997bn appear reasonable relative to quarterly/half-year sales, but turnover metrics and receivable/payable movements are unavailable.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio are shown as zero but should be treated as undisclosed. Given net income of ¥319m and unknown OCF, we cannot compute a reliable payout ratio. FCF_coverage: Unavailable; FCF is not disclosed. Dividend coverage by FCF cannot be assessed. policy_outlook: Without disclosure of DPS, policy targets, or cash flow, we cannot comment on policy continuity. Near-term prudence would be consistent with low net margin and non-operating headwinds, but data is insufficient to draw conclusions.

Risk Assessment

Business Risks:

• End-market cyclicality in electronics, automotive, and industrial customers.
• Raw material price volatility affecting gross margins.
• FX fluctuations impacting both revenue and costs.
• Product mix shifts and pricing pressure from competition.
• Supply chain and logistics disruptions.

Financial Risks:

• Interest cost burden (¥509m) compressing ordinary income; sensitivity to rate changes.
• Potential one-off or extraordinary items driving the gap between operating and net income.
• Limited visibility on cash generation and capex due to undisclosed cash flow data.
• Working capital swings potentially impacting liquidity and OCF.

Key Concerns:

• Net income decline of 66.1% YoY despite strong operating performance.
• Large gap between operating and net margins (5.0% vs 0.55%).
• Undisclosed depreciation, OCF, and capex obscuring earnings quality.
• Equity ratio reported as 0.0% is clearly undisclosed; inferred equity ratio ~49% is more representative.

Investment Implications

Key Takeaways:

• Core operations improved materially: operating income +73.7% on revenue +10.9%, OPM ~5.0%.
• Non-operating burdens (notably interest) and below-the-line items suppressed net income to ¥319m (margin 0.55%).
• Balance sheet is moderately conservative with an inferred equity ratio of ~49% and interest coverage ~5.7x.
• Cash flow and D&A data gaps limit confidence in durability of margin gains and ROE trajectory.
• Asset turnover of 0.475x and leverage of 2.02x imply ROE will remain constrained without higher net margins or improved efficiency.

Metrics to Watch:

• Ordinary income vs operating income gap (tracking interest, FX, and other non-operating items).
• Cash from operations and capex once disclosed; FCF conversion and working capital trends.
• Gross and operating margin stability amid input cost and pricing changes.
• Interest coverage and debt levels as rates and credit conditions evolve.
• Backlog/orders and segment mix to gauge sustainability of revenue growth.

Relative Positioning: Operational momentum appears favorable relative to typical cyclical peers on margin expansion, but bottom-line and disclosure gaps (cash flow, D&A, dividend policy) temper the relative quality assessment.

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