| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥85779.7B | ¥91432.1B | -6.2% |
| Operating Income / Operating Profit | ¥-101.1B | ¥640.1B | -86.6% |
| Ordinary Income | ¥-1108.3B | ¥1594.2B | -70.5% |
| Net Income / Net Profit | ¥-2440.3B | ¥165.0B | -1579.0% |
| ROE | -4.6% | 0.3% | - |
For the cumulative results through Q3 FY2026, Revenue was ¥8兆5,779B (YoY -¥5,565B, -6.2%), marking a decline. Operating Income fell into a loss of ¥-101B (YoY -¥741B, -115.8%), Ordinary Income was ¥-1,108B (YoY -¥2,702B, -169.5%), and Net Income attributable to owners of the parent for the quarter was ¥-2,502B (YoY -¥2,554B, -49,588.3%), representing a significant deterioration. In addition to the revenue decline, non-recurring items including impairment losses of ¥806B within Special Losses totaling ¥2,240B, and non-operating expenses such as interest expense ¥834B and foreign exchange losses ¥768B, pressured profits; Operating Margin deteriorated to -0.1% (prior +0.7%). Progress against the full year forecast stands at 72.1% for Revenue, while Operating Income is in loss making comparability difficult.
Revenue: Revenue declined 6.2% YoY to ¥8兆5,779B. By region, North America external customer sales were ¥4兆7,612B (from ¥4兆9,933B, -4.6%), and Asia was ¥3,852B (from ¥4,991B, -22.8%), showing weakness in major markets. Internal sales by location also decreased, with Japan at ¥1兆7,871B (from ¥2兆2,062B, -19.0%), suggesting contraction in global production and sales footprint. Cost of goods sold was ¥7兆5,281B (COGS ratio 87.8%), with gross margin 12.2% (down 1.7pp from 13.9% prior), reflecting intensified price competition and adverse product mix.
Profitability: Selling, General and Administrative Expenses were ¥1兆600B (SG&A ratio 12.4%, roughly flat from ¥1兆204B prior), exceeding gross profit of ¥1,049B and resulting in Operating Loss of ¥-101B. Non-operating result netted a ¥-1,007B deterioration, mainly due to interest expense ¥834B and foreign exchange losses ¥768B. Although equity-method investment income ¥425B and interest income ¥533B were recorded, they could not offset non-operating expenses of ¥1,989B, worsening Ordinary Income to ¥-1,108B. In extraordinary items, there was Special Gain from sale of fixed assets ¥1,191B, but Special Losses totaled ¥2,240B including impairment losses ¥806B (mainly fixed assets in the Japan Automotive Business), expanding pre-tax quarterly net loss to ¥-2,081B. After income taxes of ¥359B, Net Loss attributable to owners of the parent was ¥-2,502B (prior +¥51B), a large YoY deterioration. Besides the typical revenue and profit decline, one-off items (impairment and special losses) depressed Net Income by about ¥972B.
The Automotive Business recorded Revenue of ¥7,7656B (90.5% of total) and an operating loss of ¥-2,754B (margin -3.5%), with the core business falling into the red. Prior year operating loss was ¥-1,905B, a further deterioration of ¥849B. The Sales Finance Business posted Revenue of ¥9773B (11.4% of total) and Operating Income ¥2,241B (margin 22.9%, up 0.3pp from 22.6% prior), maintaining high profitability and supporting consolidated operating results. The large deficit in the Automotive Business is weighing on consolidated performance, and the inter-segment margin gap reached 26.4pp. By location, Japan Operating Income was ¥73B (from ¥1,212B, -94.0%), North America ¥-85B (from ¥-62B), and Europe ¥-372B (improved from ¥-680B but still negative), indicating deteriorated profitability at major hubs.
Profitability: ROE -4.6% (from +0.3% prior, significant deterioration), Operating Margin -0.1% (prior +0.7%), Net Profit Margin -2.9% (prior +0.1%), indicating broad declines in profitability. DuPont three-factor decomposition: ROE = Net Profit Margin -2.9% × Total Asset Turnover 0.44 × Financial Leverage 3.70 = -4.7%, with deterioration in Net Profit Margin as the primary driver. Gross margin 12.2% down 1.7pp from 13.9% prior.
Cash Quality: Cash and Deposits ¥1,6420B, short-term liability coverage 1.78x indicating short-term liquidity is secured. Operating Cash Flow (OCF) ¥1,323B is -0.53x relative to Net Income, so OCF remained positive despite losses though alignment with Net Income is weak. Interest Coverage is -0.12x (Operating Income / Interest Paid), showing interest burden exceeds operating profit.
Investment Efficiency: Total Asset Turnover 0.44x (down from 0.48x prior).
Financial Soundness: Equity Ratio 27.0% (down 1.6pp from 28.6% prior), Current Ratio 165.0%, Debt-to-Equity equivalent 2.70x (up from 2.49x). Interest-bearing debt ¥3兆7,627B (long-term borrowings ¥2兆8,421B, bonds ¥2兆6,711B, short-term borrowings ¥9,207B, etc.), resulting in high financial leverage.
Operating Cash Flow was ¥1,323B (up from ¥465B prior, +184.5%), remaining positive despite Net Income of ¥-2,502B, but the Operating Cash Flow / Net Income ratio is -0.53x indicating quality issues. Operating cash subtotal (before working capital changes) was ¥4,122B; working capital movements were inventory increase -¥890B, trade receivables decrease +¥1,805B, trade payables decrease -¥2,546B, resulting in approximately -¥1,631B net working capital outflow. The YoY -26.8% decrease in accounts receivable indicates improved collections, but inventory increases and reduced payables impair working capital efficiency. Investing Cash Flow was -¥6,518B (nearly flat from -¥6,527B prior) driven by capital expenditures and acquisition of investment securities, leaving Free Cash Flow at -¥5,195B. Financing Cash Flow was +¥4,315B as borrowings and bond issuance financed operations, while interest payments -¥2,647B were cash outflows. Cash and Cash Equivalents increased by ¥146B from beginning balance ¥2兆1,975B to ending balance ¥2兆2,121B, with financing activities complementing investment and operating needs.
Against Ordinary Income of ¥-1,108B, Operating Income was ¥-101B, and non-operating net loss of ¥-1,007B materially compressed profits. Non-operating revenue totaled ¥981B, primarily interest income ¥533B and foreign exchange gains ¥197B, while non-operating expenses ¥1,989B included interest expense ¥834B and foreign exchange losses ¥768B. Non-operating revenue represented 1.1% of Revenue, while non-operating expense was 2.3%, outpacing gains. In extraordinary items, Special Gains were ¥1,267B (including fixed asset sale gain ¥1,191B) versus Special Losses ¥2,240B (impairment losses ¥806B, loss on disposal of fixed assets ¥31B, etc.), a net negative impact of ¥-973B. One-off items (impairments and special items) accounted for about 39% of Net Income, so adjustments are needed to assess recurring earnings power. The fact that OCF significantly exceeds Net Income was supported by working capital improvement (reduction in trade receivables), but decreases in trade payables and inventory increases raise questions about sustainability.
Industry Position (reference — company estimates): Compared to the manufacturing industry median for 2025 Q3, profitability is materially weaker: Operating Margin -0.1% (industry median +8.9%, -9.0pp), Net Profit Margin -2.9% (industry median +6.5%, -9.4pp), ROE -4.6% (industry median +5.8%, -10.4pp). Solvency: Equity Ratio 27.0% (industry median 63.8%, -36.8pp) and Financial Leverage 3.70x (industry median 1.53x, +2.17x) indicate high debt dependence. Current Ratio 165.0% is below industry median 287% but short-term liquidity is somewhat secured. Efficiency: Total Asset Turnover 0.44x (industry median 0.56x), inventory turnover days cannot be calculated by our model but finished goods inventory ¥1兆853B is substantial. Cash conversion rate OCF/Net Income -0.53x is well below industry median 0.94x. Revenue growth -6.2% (industry median +2.8%, -9.0pp) shows weak growth. Overall, the company underperforms industry averages in profitability, solvency, and growth, placing it in a high financial risk position within the manufacturing sector. (Sector: Manufacturing; Comparison: 2025 Q3; Source: Company compilation)
This report is an AI-generated financial analysis document produced by analyzing XBRL financial disclosure data. It does not constitute an investment recommendation for any specific security. Industry benchmarks are reference information compiled by the firm from public financial disclosures. Investment decisions are your responsibility; consult a professional advisor as needed.