| Metric | This Period | Prior Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥10852.2B | ¥10069.1B | +7.8% |
| Operating Income | ¥180.8B | ¥157.8B | +14.6% |
| Equity-method Investment Income (Loss) | ¥-2.5B | ¥12.0B | -120.7% |
| Ordinary Income | ¥186.7B | ¥175.7B | +6.3% |
| Net Income | ¥121.5B | ¥91.5B | +32.9% |
| ROE | 10.3% | 10.0% | - |
The fiscal year ended March 2026 recorded Revenue ¥10852.2B (YoY +¥783.0B +7.8%), Operating Income ¥180.8B (YoY +¥23.0B +14.6%), Ordinary Income ¥186.7B (YoY +¥11.0B +6.3%), and Net Income attributable to owners of the parent ¥110.8B (YoY +¥19.4B +22.7%), delivering top-line expansion and operating leverage–driven revenue and profit growth. Operating margin improved by 0.1pt to 1.7% (prior 1.6%), led by the core Food-related Business which achieved Revenue +9.2% and profit +19.0%. Special items produced a net gain of ¥50.8B (primarily gain on sales of fixed assets ¥76.4B), driving Pre-tax Income to ¥237.5B, a substantial increase. Operating Cash Flow was ¥241.5B (YoY -6.9%), generating 2.2x of Net Income; Free Cash Flow was ¥118.8B, sufficiently covering dividend payments, indicating solid cash conversion quality. Conversely, Debt/EBITDA at 3.45x indicates high leverage, and current ratio at 103.5% suggests tight short-term liquidity. Goodwill amortization expense of ¥70.5B (26% of EBITDA) is a JGAAP-specific drag on the bottom line.
Revenue: Revenue amounted to ¥10852.2B (YoY +¥783.0B +7.8%), a steady increase. The Food-related Business was the core at ¥8394.0B (+9.2%), representing 77.4% of the total. Sugar/feed & livestock-related Business was ¥1287.4B (+9.9%), Housing & Real Estate–related Business was ¥1008.2B (+1.0%), and Others totaled ¥278.3B (-10.8%). The Food-related Business benefited from expanded sales of general processed foods, confectionery, alcoholic beverages, etc., with volume growth and price revisions taking hold. Sugar/feed & livestock-related operations saw increased sales of food raw materials, feed, and livestock products, supported by improved market conditions. Housing & Real Estate–related sales of construction materials and timber remained flat, reflecting steady construction demand. Gross profit was ¥1355.0B (prior ¥1257.4B) with a gross margin of 12.5% (prior 12.5%), broadly unchanged. SG&A was ¥1174.2B (prior ¥1099.6B), with an SG&A ratio of 10.8% (prior 10.9%), improving 0.1pt as logistics efficiencies and scale benefits helped contain costs.
Profitability: Operating Income was ¥180.8B (prior ¥157.8B +14.6%), outpacing Revenue growth. Non-operating results produced a net gain of ¥5.9B (interest/dividends received ¥4.6B, interest paid ¥13.6B, foreign exchange gains ¥3.4B, etc.), resulting in Ordinary Income of ¥186.7B (prior ¥175.7B +6.3%). Special items recorded a net gain of ¥50.8B (Special gains ¥94.6B − Special losses ¥43.7B), primarily due to gain on sales of fixed assets ¥76.4B, with gain on sales of investment securities ¥8.9B and negative goodwill gain ¥4.8B also included. Special losses comprised impairment losses ¥12.4B, loss on disposal of fixed assets ¥0.8B, disaster losses ¥1.1B, etc. Pre-tax Income was ¥237.5B (prior ¥173.7B +36.7%). Income taxes were ¥116.0B (effective tax rate 48.8%), a high level and up ¥38.8B YoY. After deducting non-controlling interests of ¥10.7B, Net Income attributable to owners of the parent was ¥110.8B (prior ¥85.4B +29.8%). In conclusion, revenue and profit growth were achieved through expansion in the core Food-related Business and recognition of special gains, but assessment of sustainable profitability should focus on trends at the operating and ordinary income levels.
Food-related Business: Revenue ¥8394.0B (prior ¥7689.2B +9.2%), Operating Income ¥129.3B (prior ¥108.7B +19.0%), operating margin 1.5%. Expansion in sales of general processed foods, confectionery, alcoholic beverages, frozen foods, etc., contributed, and this business accounts for roughly 70% of consolidated Operating Income. Sugar/feed & livestock-related Business: Revenue ¥1287.4B (prior ¥1171.1B +9.9%), Operating Income ¥41.3B (prior ¥34.5B +19.7%), margin 3.2%, relatively higher profitability—sales of food raw materials, feed, and livestock products increased, functioning as a stable earnings source. Housing & Real Estate–related Business: Revenue ¥1008.2B (prior ¥998.7B +1.0%), Operating Income ¥23.0B (prior ¥29.6B -22.4%), margin 2.3%—profit decline amid slight sales increase, affected by higher construction costs and demand stagnation. Others: Revenue ¥278.3B (prior ¥312.0B -10.8%), Operating Income ¥11.3B (prior ¥8.4B +34.3%), margin 4.0%—high efficiency. Includes transportation and fuel-related businesses; despite Revenue decline, profit increased substantially due to improved cost management. Across segments, the Food-related Business expansion drove consolidated profits, offsetting Housing & Real Estate’s profit decline. The high 77.4% weighting of Food-related Business indicates concentration risk, while Sugar/feed & livestock’s high margins provide diversification benefits.
Profitability: Operating margin 1.7% (prior 1.6%), up 0.1pt. Gross margin maintained at 12.5%, SG&A ratio improved to 10.8% (prior 10.9%), a 0.1pt improvement. Logistics efficiencies and scale contributed, but absolute margins remain low typical of wholesale. ROE 10.3% (prior 9.5%), above the company’s historical performance; DuPont decomposition: Net margin 1.0% × Total Asset Turnover 2.39x × Financial Leverage 3.84x. Cash Quality: Operating Cash Flow ¥241.5B, generating 2.2x of Net Income; OCF/EBITDA ratio 0.90x, indicating healthy conversion. Accrual ratio -2.9% denotes strong cash backing and high earnings quality. Investment Efficiency: Total Asset Turnover 2.39x, reflecting high turnover typical of food wholesale. Capital expenditures ¥220.3B, 2.53x depreciation expense ¥87.1B, showing an aggressive investment stance. Financial Soundness: Equity Ratio 26.0% (prior 23.0%) improved, but leverage remains high. Debt/Equity 2.84x, Interest-bearing Debt/EBITDA 3.45x, exceeding investment-grade thresholds. Interest Coverage 13.3x indicates adequate interest payment capacity. Current Ratio 103.5%, Quick Ratio 90.2%—short-term liquidity is tight, requiring attention to seasonal working capital swings. Goodwill balance ¥333.6B, representing 28.2% of equity; Goodwill/EBITDA ratio 1.25x—relatively contained, but annual goodwill amortization ¥70.5B is a compressive factor on the bottom line.
Operating CF ¥241.5B (prior ¥259.3B -6.9%). Starting from Pre-tax Income ¥237.5B, add Depreciation ¥87.1B and Goodwill Amortization ¥70.5B, then adjust for working capital movements of -¥86.9B and subtract income taxes paid ¥86.7B. Working capital: inventories increased by ¥-92.3B, trade receivables decreased by ¥51.5B, trade payables increased by ¥29.9B, netting to a cash outflow of -¥86.9B. The reduction in receivables reflects improved collection management; inventory build reflects demand response and price rises; increased payables suggests improved payment terms with scale. Investing CF was -¥122.7B (prior -¥189.8B); while CAPEX was ¥220.3B, proceeds from sale of fixed assets were ¥123.9B (prior ¥4.6B), materially reducing net investment burden. Financing CF was -¥53.7B (prior -¥83.8B), reflecting long-term borrowings of ¥192.3B against repayments of ¥245.7B, net short-term borrowings decrease ¥31.4B, dividend payments ¥19.4B, etc. FCF (Operating CF + Investing CF) was ¥118.8B, adequately covering dividends ¥19.4B, yielding an FCF coverage of 6.1x. Cash and equivalents rose to ¥499.9B at year-end (from ¥435.4B at start, +¥64.5B), with proceeds from fixed asset sales contributing to cash strengthening. Operating CF/Net Income ratio 2.2x and OCF/EBITDA 0.90x indicate good cash conversion, and the one-off asset sale gains were backed by cash.
Operating Income ¥180.8B and non-operating net income ¥5.9B form the core recurring earnings base, totaling ¥186.7B as recurring earning power. Special items totaled a net gain of ¥50.8B, led by gain on sales of fixed assets ¥76.4B. Negative goodwill gain ¥4.8B and gain on sales of investment securities ¥8.9B are one-off items; special losses totaled ¥43.7B including impairment losses ¥12.4B. One-off items accounted for approximately 21% of Pre-tax Income ¥237.5B, creating a significant divergence from Ordinary Income. Accrual ratio was -2.9%—cash backing is sufficient: Operating CF ¥241.5B / Net Income ¥121.5B = 1.99x, and OCF/EBITDA = 0.90x. Non-operating income was ¥29.0B (0.27% of Revenue), including interest/dividends received ¥4.6B and foreign exchange gains ¥3.4B, while non-operating expenses were ¥23.1B, mainly interest expense ¥13.6B. Contribution from non-operating items is limited; Ordinary Income approximates Operating Income. The effective tax rate was 48.8%, high due to temporary tax adjustments; normalization is expected next fiscal year. Goodwill amortization ¥70.5B (26% of EBITDA) is a JGAAP-specific profit compression factor; pre-goodwill EBITDA was ¥338.4B (Operating Income ¥180.8B + Depreciation ¥87.1B + Goodwill Amortization ¥70.5B), and this metric is appropriate for evaluating true cash-generating capacity. Comprehensive income was ¥158.2B, exceeding Net Income ¥121.5B, aided by valuation gains on available-for-sale securities ¥33.0B and actuarial adjustments related to retirement benefits ¥4.2B.
For FY ending March 2027, management forecasts Revenue ¥12000.0B (YoY +10.6%), Operating Income ¥220.0B (YoY +21.7%), Ordinary Income ¥230.0B (YoY +23.2%), and Net Income attributable to owners of the parent ¥125.0B (YoY +12.8%). The projected operating profit growth outpacing Revenue assumes further logistics efficiencies, absorption of price revisions, and realization of scale benefits. This fiscal year benefited significantly from special gains, but next fiscal year’s plan assumes covering the decline in one-off gains through operating performance. Dividend guidance is unchanged at ¥80 per share. Progress rates are not applicable as this is a full-year finalized result, but inventory build (+¥54.1B) and expanded CAPEX (¥220.3B) suggest confidence in demand outlook. Key watch items for next fiscal year are recovery of Housing & Real Estate–related earnings and maintenance of margins in the Food-related Business.
Year-end dividend is ¥80 per share (prior ¥70 +¥10), with a payout ratio of approximately 20.0% (total dividends ¥19.4B / Net Income attributable to owners of the parent ¥110.8B). Operating CF ¥241.5B covers dividend payments 12.4x, and FCF ¥118.8B covers dividends 6.1x, indicating dividend sustainability. Goodwill amortization ¥70.5B is a JGAAP-specific accounting burden, suggesting actual distributable capacity is greater than accounting profit implies. Capital policy is a balanced approach prioritizing growth investment while maintaining stable dividends: CAPEX ¥220.3B (2.53x depreciation) was executed while preserving dividends. Next fiscal year guidance also plans to maintain dividend at ¥80, implying a payout ratio of approximately 17.8% (based on forecast Net Income ¥125.0B), a restrained level. There were no share buybacks; shareholder returns are dividend-centric.
Low-margin structure and price-competition risk: With an Operating Margin of 1.7%, absolute margin levels are low and resilience to intensified price competition or rising logistics costs is limited. The narrow gap between gross margin 12.5% and SG&A ratio 10.8% implies high risk of margin erosion from fixed-cost increases or sales slowdown.
High leverage and liquidity strain: Debt/Equity 2.84x and Debt/EBITDA 3.45x indicate high leverage, posing risk of increased interest burden in rising-rate environments. Current Ratio 103.5% signals tight short-term liquidity; careful monitoring is required for seasonal working capital swings or demand reversals.
Dependence on one-off gains and earnings normalization risk: This year’s Pre-tax Income included significant special gains such as gain on sales of fixed assets ¥76.4B, accounting for about 21% of Pre-tax Income; the absence of such gains next year could make achieving profit growth difficult. The profit decline in Housing & Real Estate (−22.4%) also highlights earnings stability challenges.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 1.7% | 3.4% (1.4%–5.0%) | -1.7pt |
| Net Margin | 1.1% | 2.3% (1.0%–4.6%) | -1.2pt |
Profitability metrics lag industry medians, underscoring the sector’s low-margin structure.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 7.8% | 5.9% (0.4%–10.7%) | +1.9pt |
Revenue growth outpaced industry median, indicating relatively favorable scale expansion.
※ Source: Company compilation
Gradual margin improvement driven by scale expansion and cost control continues. Operating Margin rose to 1.7% (prior 1.6%), +0.1pt; SG&A ratio fell to 10.8% (prior 10.9%), −0.1pt. Revenue has increased for three consecutive years, and the FY2027 forecast targets +10.6% Revenue growth. Operating CF ¥241.5B generated 2.2x Net Income, and FCF ¥118.8B covers dividends 6.1x, reflecting good cash conversion quality.
One-off gains were significant; evaluating sustainable earning power requires focus on operating and ordinary income trends. Special gains such as gain on sales of fixed assets ¥76.4B represented about 21% of Pre-tax Income, and the absence of such gains next year could make profit growth more challenging. Goodwill amortization ¥70.5B (26% of EBITDA) compresses the bottom line under JGAAP; pre-goodwill EBITDA ¥338.4B should be emphasized when assessing true cash generation.
Monitor leverage levels and liquidity. Debt/Equity 2.84x, Debt/EBITDA 3.45x indicate high indebtedness, and Current Ratio 103.5% means short-term liquidity is tight. Interest Coverage 13.3x suggests adequate interest payment capacity, but the company is vulnerable to interest rate increases and inventory build. Equity Ratio 26.0% (prior 23.0%) is improving, and progress in balance sheet management will be a key evaluation metric going forward.
This report was automatically generated by AI analyzing XBRL financial results and is a financial analysis document. It does not constitute a recommendation to invest in any specific security. 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 before making investment decisions.