| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥429.8B | ¥481.2B | -10.7% |
| Operating Income / Operating Profit | ¥-22.8B | ¥-12.9B | -76.5% |
| Ordinary Income | ¥-6.8B | ¥-2.1B | -95.6% |
| Net Income / Net Profit | ¥-2.8B | ¥51.0B | +409.4% |
| ROE | -0.3% | 5.8% | - |
For the full year ended March 2026, Revenue was ¥429.8B (YoY -¥51.4B, -10.7%), Operating loss was ¥22.8B (worsened by -¥9.9B from prior year Operating loss of ¥12.9B), Ordinary loss was ¥6.8B (worsened by -¥4.7B from prior year Ordinary loss of ¥2.1B), and Net income attributable to owners of the parent was ¥25.2B (improvement of +¥28.0B from prior year -¥2.8B). Both the Electronic Devices and Production Equipment businesses recorded double-digit revenue declines and widening losses, causing Gross Margin to deteriorate by 2.3pt from 18.4% to 16.1%. SG&A cost reductions (¥-9.6B) could not offset Gross Profit decline (¥-19.5B), resulting in a larger Operating loss. Conversely, recognition of Special gains of ¥42.3B, including ¥36.7B gain on sale of fixed assets, led to a final profit (Net income) turning positive; however, losses persisted at the Ordinary income level, highlighting fragility in the earnings structure.
[Revenue] Revenue was ¥429.8B (YoY -10.7%), marking a double-digit decline. By segment, Electronic Devices was ¥154.1B (-11.9%) and Production Equipment was ¥276.0B (-10.0%), with both businesses down. By region, Japan ¥185.8B, Americas ¥53.1B, Europe ¥15.6B, Asia & others ¥175.3B, showing weakness across all regions. Gross margin fell 2.3pt to 16.1% (prior year 18.4%), reflecting intensified price competition and under-absorption of fixed costs.
[Profitability] Cost of sales was ¥360.6B (83.9% of sales), yielding Gross Profit of ¥69.2B, but SG&A of ¥92.0B (21.4% of sales) exceeded Gross Profit, producing an Operating loss of ¥22.8B (worsened ¥9.9B from prior year -¥12.9B). SG&A was reduced by ¥9.6B YoY, but could not absorb Gross Profit decline of ¥19.5B, leaving Operating margin at -5.3% (down 2.6pt from -2.7%). Non-operating income included interest income ¥6.2B, dividend income ¥4.6B, and foreign exchange gains ¥4.1B, totaling Non-operating income of ¥18.0B. Net of Non-operating expenses ¥2.0B, Non-operating profit was +¥16.0B, narrowing Ordinary loss to ¥6.8B. In Extraordinary items, Special gains of ¥42.3B (including gain on sale of fixed assets ¥36.7B and gain on liquidation of subsidiaries ¥5.5B) were recognized against Special losses of ¥6.1B (including impairment loss ¥5.3B), resulting in net +¥36.1B contribution and Pre-tax Income of ¥29.3B. After income taxes and others ¥3.7B and non-controlling interests ¥0.3B, Net income attributable to owners of the parent was ¥25.2B (improvement of +¥28.0B from prior year -¥2.8B). In conclusion, while revenue and profit declined and core business losses widened, one-off special gains produced final profit.
Electronic Devices: Revenue ¥154.1B (YoY -11.9%), Operating loss ¥13.2B (worsened ¥4.0B from prior year -¥9.2B, Operating margin -8.6%). Production Equipment: Revenue ¥276.0B (YoY -10.0%), Operating loss ¥9.6B (worsened ¥5.9B from prior year -¥3.7B, Operating margin -3.5%). Both segments experienced revenue declines and widening losses, with deteriorating fixed-cost absorption and declining Gross margins due to price competition as common issues.
[Profitability] Operating margin -5.3% (worsened 2.6pt from -2.7%), Net margin 5.9% (improved 6.5pt from -0.6%, but driven by Special gains). Gross margin 16.1% (down 2.3pt from 18.4%), SG&A ratio 21.4% (up 0.3pt from 21.1%); SG&A compression progressed but was outweighed by Gross margin deterioration. ROE -0.3% (prior year -0.4%), slightly improved but still negative. [Cash Quality] Operating Cash Flow (OCF) ¥17.7B (down 61.7% from ¥46.2B), OCF/Net income 0.70x indicating low cash conversion of profits. OCF/EBITDA -1.39x reflecting impact of operating losses. [Investment Efficiency] Total asset turnover 0.395x (down from 0.476x), Inventory turnover days 121 days (worsened +30 days from 91), Receivables turnover days 98 days (+10 days from 88), Working capital turnover days 198 days (+70 days from 128), indicating significant deterioration in working capital efficiency. [Financial Health] Equity Ratio 87.4% (unchanged from prior year), Debt/Capital approximately 0.1% indicating virtually no debt. Current ratio 983%, Quick ratio 933% showing very strong liquidity, with Cash and deposits ¥361.9B (33.2% of total assets), ensuring solid short-term payment ability.
Operating Cash Flow was ¥17.7B (down 61.7% from ¥46.2B). Cash conversion versus Net income was 0.70x. Operating cash flow before working capital changes subtotal was ¥10.3B; inventory decrease +¥26.2B and receivables decrease +¥7.4B were positive contributors, while payables decrease -¥2.2B was a negative contributor. After corporate taxes paid -¥2.8B and interest & dividends received +¥11.2B, Operating Cash Flow was ¥17.7B. Investing Cash Flow was +¥24.4B, mainly due to proceeds from sale of fixed assets ¥33.6B; CapEx was -¥9.0B which is below depreciation expense ¥10.1B, indicating renewal-level investment (CapEx/Depreciation 0.90x). As a result, Free Cash Flow was positive ¥42.1B, though heavily influenced by asset sales and therefore limited in sustainability. Financing Cash Flow was -¥8.3B, including dividends paid -¥4.3B and lease liability repayments -¥1.8B. Cash and cash equivalents at period-end rose to ¥282.8B (from ¥236.1B at beginning, +¥46.7B), maintaining strong liquidity.
Recurring earnings remain challenged, with Operating loss ¥22.8B and Ordinary loss ¥6.8B, raising sustainability concerns. One-off factors comprised Special gains ¥42.3B (gain on sale of fixed assets ¥36.7B, gain on liquidation of subsidiaries ¥5.5B, etc.) and Special losses ¥6.1B (impairment loss ¥5.3B, business restructuring costs ¥0.7B, etc.), netting +¥36.1B—substantially exceeding Net income of ¥25.2B (one-off items / Net income ≈ 143%). Non-operating income ¥18.0B (4.2% of sales) included interest income ¥6.2B, dividend income ¥4.6B, and foreign exchange gains ¥4.1B, reflecting significant contribution from financial asset returns and FX movements. Accrual quality metrics: Operating CF / Net income = 0.70x, OCF/EBITDA -1.39x (negative due to operating loss), indicating low quality and showing inventory build-up and slower receivables collection are impeding cash conversion. The divergence between Ordinary Income and Net Income (¥-6.8B → ¥+25.2B, difference +¥32.0B) is mainly driven by Special gains, making recovery of operating-level profitability an urgent priority.
Full-year guidance: Revenue ¥450.0B (YoY +4.7%), Operating loss ¥13.0B, Ordinary loss ¥8.5B, Net loss attributable to owners of the parent ¥39.0B. Year-to-date results: Revenue ¥429.8B (progress rate 95.5%), Operating loss ¥22.8B (¥9.8B short of plan -¥13.0B), Ordinary loss ¥6.8B (¥1.7B better than plan -¥8.5B, due to contribution from Non-operating income), Net income attributable to owners of the parent ¥25.2B (variance +¥64.2B versus guided loss ¥39.0B, driven by Special gains). The turnaround to Net profit in actuals is driven by one-off gains such as sale of fixed assets; the scenario of continued core business losses assumed in guidance remains unchanged. The dividend for the next fiscal year (March 2027) is undecided, indicating prioritization of assessing recovery in core earnings.
A year-end dividend of ¥18 (interim dividend ¥0) was paid, totaling dividends of ¥0.424B. Dividend payout ratio relative to Net income attributable to owners of the parent (¥25.2B) is approximately 16.8%, a conservative level. Dividend coverage relative to Free Cash Flow (¥42.1B) is about 9.9x, indicating sufficient capacity. However, given that current period Net income and Free Cash Flow include significant one-off proceeds from fixed asset sales, sustainability of dividends going forward depends on recovery of operating cash generation. Financial strength (Cash ¥361.9B, virtually debt-free) reduces short-term risk of dividend cuts, but the dividend for FY2027 is undecided; achievement of operating profitability will determine dividend policy. No share buybacks were executed; shareholder returns consist solely of dividends.
Continued core business losses and Gross margin deterioration: Operating margin -5.3% (worsened 2.6pt from -2.7%), Gross margin 16.1% (down 2.3pt from 18.4%), indicating weakened earnings structure. Prolonged price competition or continued deterioration in fixed-cost absorption could lead to persistent Ordinary losses and weakened cash generation.
Working capital efficiency deterioration leading to funding pressure: Inventory days 121 (up +30 days from 91), Receivables days 98 (up +10 days from 88), Working capital turnover days 198 (up +70 days from 128), indicating significant elongation. Inventory stagnation and extended credit terms raise concerns around supply-demand balance, quality, and customer creditworthiness, and could constrain Operating Cash Flow.
Dependence on one-off gains and lack of earnings sustainability: This period’s final profit depended on Special gains ¥42.3B (168% of Net income), notably gain on sale of fixed assets ¥36.7B, which have low recurrence. If operating losses persist and recovery at Operating/Ordinary levels is delayed, investor confidence could deteriorate and share price adjustments could follow.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating margin | -5.3% | 7.8% (4.6%–12.3%) | -13.1pt |
| Net margin | -0.6% | 5.2% (2.3%–8.2%) | -5.8pt |
Profitability is well below the industry median, with Operating margin trailing by 13.1pt and Net margin by 5.8pt, placing the company in the lower tier in the industry.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | -10.7% | 3.7% (-0.4%–9.3%) | -14.4pt |
Revenue growth rate at -10.7% is 14.4pt below the industry median of +3.7%, indicating lower growth relative to peers.
※ Source: Company compilation
Continued core business losses and Gross margin deterioration (-2.3pt) resulted in Operating loss ¥22.8B and Ordinary loss ¥6.8B, with final Net income ¥25.2B dependent on Special gains such as gain on sale of fixed assets ¥36.7B. Sustainability of future earnings will hinge on successful restoration of Operating profitability. Operating margin of -5.3% is 13.1pt below industry median of +7.8%, underlining urgency for earnings structure improvements.
Working capital efficiency has significantly deteriorated: inventory days 121 (+30 days YoY), receivables days 98 (+10 days YoY), working capital turnover days 198 (+70 days YoY). Delays in cash collection and inventory buildup are manifest. Operating Cash Flow ¥17.7B (down from ¥46.2B) and OCF/Net income 0.70x indicate low cash conversion and raise concerns about earnings quality. Inventory optimization and strengthening credit management to compress working capital are keys to restoring cash generation.
Financial health is extremely strong, with Equity Ratio 87.4%, virtually no net debt, Cash and deposits ¥361.9B (33.2% of total assets), and Current ratio 983%, providing solid short-term liquidity. Investment securities ¥173.3B (YoY +29.9%) have increased unrealized gains, supporting Comprehensive income ¥74.4B and buttressing equity, but they also introduce market risk. The FY2027 dividend is undecided; balancing operating turnaround with stable dividends will be a focal point of medium-term shareholder return policy.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not recommend investment in any specific securities. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your responsibility; please consult a professional advisor as needed.