Nippon Antenna Co., Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥6.19B
• Operating Income: ¥1.48B
• Net Income: ¥-655M
• EPS: ¥88.18

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

日本アンテナ (TSE:6930) posted strong topline and operating performance for FY2026 Q2 (cumulative), with revenue of ¥6.194bn (+33.3% YoY) and operating income of ¥1.481bn (+83.6% YoY). Operating margin was an unusually high 23.9%, outpacing the reported gross margin of 22.3%, implying the presence of sizable other operating income or negative net SG&A (e.g., subsidies, gains on sales, or cost reversals). Ordinary income reached ¥1.506bn, yet net income was ¥944m, down 77.9% YoY, indicating significant below-ordinary items (e.g., extraordinary losses or non-controlling interests) that reduced the bottom line despite strong core operations. The effective tax outflow is minimal (¥11m), consistent with a near-zero effective tax rate, likely reflecting the impact of special items or tax loss carryforwards. Balance sheet strength remains a key positive: total equity is ¥16.62bn against liabilities of ¥2.991bn, resulting in low financial leverage (assets/equity 1.18x) and a reported debt-to-equity ratio of 0.18x. Liquidity is ample with a current ratio of 797.5% and quick ratio of 744.8%, supported by large current assets (¥16.34bn) and sizable working capital (¥14.291bn). Asset turnover is modest at 0.316x, suggesting a capital-light but working-capital-intensive model and/or timing effects in H1. Cash conversion was weak this period: operating cash flow was slightly negative at ¥-14m against net income of ¥944m (OCF/NI -0.01), pointing to working capital build or timing-related cash outflows. EBITDA was ¥1.579bn (margin 25.5%), providing a healthy operating cash earnings base even though period cash conversion lagged. Interest expense is unreported (shown as zero), consistent with low leverage; the displayed interest coverage ratio is not meaningful in this context. The divergence between ordinary income and net income (roughly ¥-0.56bn) is a focal point for assessing earnings quality and repeatability. Dividend payments were not disclosed (DPS reported as zero), resulting in a payout ratio of 0% for the period. Due to undisclosed cash and investing flows (both shown as zero), free cash flow and cash balances cannot be reliably assessed; observed FCF is shown as zero by data definition, not necessarily economic reality. Overall, core profitability and balance sheet resilience are solid, but bottom-line volatility, cash conversion softness, and limited cash flow disclosure temper visibility. Key watchpoints include the nature of below-ordinary items, sustainability of other operating income, and normalization of working capital.

Profitability Analysis

ROE (DuPont) is 5.68%, decomposed into net margin 15.24%, asset turnover 0.316x, and financial leverage 1.18x. The low leverage means ROE is predominantly driven by margin, not gearing. Operating margin of 23.9% exceeds gross margin of 22.3%, implying material other operating income or reversals in SG&A; this boosts operating leverage optics but may not be recurring. EBITDA margin of 25.5% signals strong cost control and/or mix, though the margin stack versus gross margin suggests accounting-related items (e.g., subsidies/gains) inside operating income. Ordinary income modestly exceeds operating income, indicating some positive non-operating contribution. However, net income materially trails ordinary income due to below-ordinary items, undercutting earnings quality at the bottom line. With asset turnover at 0.316x, efficiency is moderate and likely dampened by large working capital. Given low interest expense, operating leverage (fixed cost absorption) is the key driver of profit variability; the sharp YoY operating gain suggests favorable volume/mix and tight opex, but sustainability depends on repeatability of non-core operating items.

Growth Assessment

Revenue grew 33.3% YoY to ¥6.194bn, indicating strong demand and/or project shipment timing. Operating income rose 83.6% YoY, implying significant operating leverage and/or non-recurring operating gains. Despite strong core growth, net income fell 77.9% YoY, pointing to extraordinary losses or other below-ordinary charges this period versus likely one-offs boosting the prior-year base—limiting comparability. The net margin of 15.24% is healthy but distorted by the gap between ordinary and net income; the sustainability of improvements depends on the absence of repeat special losses. The relationship between gross margin (22.3%) and operating margin (23.9%) suggests non-core operating items contributed to growth in operating profit; absent clarity on these items, forward growth should be judged mainly on revenue trends and normalized margins. Asset turnover at 0.316x and the weak OCF/NI ratio indicate growth was accompanied by working capital investment, which may reverse if timing normalizes. Outlook hinges on demand in communications/antenna end-markets, execution on large orders, and pricing discipline; absent detailed backlog or segment data, we treat revenue momentum as positive but possibly timing-driven.

Financial Health

The company maintains a conservative balance sheet: total assets ¥19.596bn, liabilities ¥2.991bn, and equity ¥16.62bn. Financial leverage (assets/equity) is 1.18x and debt-to-equity is 0.18x, indicating limited reliance on debt. Liquidity is strong with current assets ¥16.34bn and current liabilities ¥2.049bn, yielding a current ratio of 797.5% and quick ratio of 744.8%. Working capital is substantial at ¥14.291bn, providing buffer but tying up capital and depressing asset turnover. Interest expense is reported as zero (unreported), consistent with low leverage; solvency risk appears low. Equity ratio was shown as 0.0% but, given assets and equity, the implied equity ratio is roughly 84.8%—the reported zero should be treated as undisclosed, not an actual zero.

Cash Flow Quality

Operating cash flow was ¥-14m versus net income of ¥944m (OCF/NI -0.01), indicating poor cash conversion in the period, likely driven by working capital increases (e.g., receivables buildup or inventory staging for projects). Depreciation and amortization were ¥98m, modest relative to EBITDA, consistent with a relatively asset-light profile. Investing cash flow is shown as zero (undisclosed), so capex cannot be assessed; free cash flow is displayed as zero due to data limitations, not necessarily reflecting economic FCF. The gap between ordinary and net income flags potential non-cash special losses; however, the near-zero tax outflow suggests tax shield effects. Without cash and cash equivalents disclosure, liquidity from cash on hand cannot be evaluated; reliance on balance sheet liquidity (working capital) remains the main observable support. Overall earnings quality is mixed: strong operating/EBITDA performance but weak cash realization and heavy reliance on working capital timing.

Dividend Sustainability

DPS is reported as ¥0.00 with a payout ratio of 0%. With OCF negative and FCF undisclosed, cash flow coverage of dividends cannot be assessed; the reported FCF coverage of 0.00x reflects data unavailability rather than true capacity. Balance sheet strength (low leverage, high equity) provides theoretical capacity for distributions, but the priority likely remains funding working capital for growth and preserving flexibility amid earnings volatility at the bottom line. Future policy visibility is limited without confirmed cash balances, capex needs, and clarity on special items. Unless and until cash conversion normalizes and below-ordinary volatility subsides, sustainable payouts are difficult to gauge from available data.

Risk Assessment

Business Risks:

• Demand cyclicality in communications infrastructure, broadcasting, and related antenna markets
• Project timing risk leading to revenue and margin volatility across quarters
• Pricing pressure and competition in components and systems
• Technology shifts (5G/6G, IoT) requiring continued R&D and potential product obsolescence
• Supply chain and lead-time volatility for electronic components
• Customer concentration with carriers/integrators and tender-based variability
• FX exposure on imported components and overseas sales

Financial Risks:

• Weak cash conversion in the period (OCF/NI -0.01) driven by working capital
• Large working capital tying up liquidity and depressing asset turnover
• Earnings volatility from below-ordinary items impacting net income
• Limited disclosure of cash balances and investing cash flows
• Potential inventory obsolescence risk given technology cycles

Key Concerns:

• Operating income exceeding gross profit, implying reliance on other operating income
• Significant gap between ordinary income (¥1.506bn) and net income (¥944m)
• Near-zero effective tax rate suggesting atypical profit composition
• Insufficient visibility on capex and cash balances due to undisclosed items

Investment Implications

Key Takeaways:

• Core operations strong: revenue +33.3% YoY and operating income +83.6% YoY with 23.9% operating margin
• Bottom-line volatility: net income down 77.9% YoY due to below-ordinary items
• Balance sheet robust: low leverage (assets/equity 1.18x) and high liquidity (current ratio 797.5%)
• Cash conversion weak: OCF/NI -0.01, indicating working capital drag
• Margin quality mixed: operating margin exceeds gross margin, implying non-recurring operating items
• Efficiency moderate: asset turnover 0.316x amid large working capital

Metrics to Watch:

• Composition of other operating income and extraordinary items driving the gap from ordinary to net income
• Working capital movements (receivables, inventories) and OCF/NI normalization
• Order backlog and shipment timing to assess revenue sustainability
• Gross margin versus operating margin spread as a proxy for recurring profitability
• Capex and investing cash flows to gauge true FCF
• Cash and cash equivalents disclosure for liquidity verification

Relative Positioning: Within Japanese electronics/components peers, the company appears conservatively capitalized with low leverage and strong interim operating margins, but exhibits lower asset turnover and weaker cash conversion this period; earnings quality is more volatile at the bottom line due to special items, warranting focus on normalization and disclosure granularity.

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
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