HINO MOTORS,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥742.86B
• Operating Income: ¥38.07B
• Net Income: ¥-217.56B
• EPS: ¥39.20

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

Hino Motors (72050) reported FY2026 Q2 consolidated results under JGAAP with a notable recovery in profitability despite a revenue decline. Revenue fell 12.4% YoY to ¥742.9bn, yet operating income rose 58.0% YoY to ¥38.1bn, implying significant operating leverage from cost control, mix/pricing, or warranty/recall cost normalization. Gross profit was ¥143.5bn, translating to a 19.3% gross margin, which is healthy for a commercial vehicle OEM given the revenue contraction. Operating margin improved to approximately 5.1%, while ordinary income was ¥36.5bn and net income ¥22.5bn, yielding a 3.03% net margin. DuPont breakdown shows ROE of 8.11% driven by modest net margin, moderate asset turnover (0.562x), and high financial leverage (assets/equity of 4.76x). Liquidity remains tight with a current ratio of 81.9% and negative working capital of ¥185.2bn; quick ratio is 62.5%, highlighting reliance on short-term funding and working capital discipline. Balance sheet leverage is elevated with total liabilities/equity at 4.42x; however, based on the provided asset and equity figures, the equity ratio is approximately 21% despite the equity ratio field showing 0.0% (unreported). Interest expense was ¥6.8bn; interest coverage of ~5.6x is adequate but leaves limited cushion in a downturn. Cash flow line items are unreported (all zero), preventing direct assessment of operating cash generation and free cash flow. Depreciation and amortization are also unreported, making EBITDA metrics non-meaningful; the reported EBITDA and margin of 0.0% should be disregarded. EPS was ¥39.20, but share count, book value per share, and cash/equivalents are unreported, limiting per-share and liquidity analysis. Dividend per share is reported as ¥0, indicating no distribution; payout ratio is 0% by definition. Overall, Hino is demonstrating margin recovery and improved operating efficiency against a softer topline, but the capital structure is leveraged and near-term liquidity is tight. The lack of cash flow disclosure is a key limitation and prevents confirming the sustainability of the earnings rebound. Going forward, the trajectory of gross and operating margins, working capital normalization, and interest burden management will be central to the outlook. Given elevated leverage and negative working capital, balance sheet reinforcement and cash generation will be critical for dividend resumption and investment capacity.

Profitability Analysis

roe_decomposition:

• net_profit_margin: 3.03%
• asset_turnover: 0.562
• financial_leverage: 4.76
• calculated_roe: 8.11%
• notes: ROE is primarily supported by leverage; margin and turnover are moderate. Financial leverage equals assets/equity (1,320.8/277.5≈4.76). margin_quality:
• gross_margin: 19.3%
• operating_margin: 5.1%
• ordinary_margin: 4.9%
• net_margin: 3.03%
• interpretation: Despite a 12.4% revenue decline, gross and operating margins are solid, indicating price/mix and cost discipline. The spread between operating and net margin reflects interest burden and taxes/minorities. operating_leverage: High in this period: Operating income grew +58% YoY against a -12.4% revenue decline. This suggests fixed cost absorption improvement and possibly lower extraordinary operating costs versus the prior year. Sustainability depends on volume stabilization and continued cost control. interest_burden_and_tax:
• interest_expense: 6765000000
• interest_coverage: 5.6x (Operating income / Interest expense)
• effective_tax_rate_observation: The reported effective tax rate of 0.0% is not reliable due to unreported pretax details; based on ordinary-to-net, implied combined tax and non-controlling interest burden is ~38%.

Growth Assessment

revenue_sustainability: Revenue of ¥742.9bn declined 12.4% YoY, indicating demand softness or unit constraints. Without segment/geographic detail, sustainability is uncertain; recovery likely hinges on domestic and export truck demand and supply chain normalization. profit_quality: Improved operating margin and ordinary margin point to healthier core profitability. However, absent cash flow data and D&A, the quality of earnings cannot be validated via cash conversion or non-cash cost add-backs. outlook: Near-term outlook is cautiously improving on margins, but topline recovery is needed for durable earnings expansion. Monitoring order trends, backlog conversion, pricing discipline, and input costs (steel, logistics) is essential. Elevated leverage and tight liquidity could constrain growth investments if conditions soften.

Financial Health

liquidity:

• current_ratio: 81.9%
• quick_ratio: 62.5%
• working_capital: -185193000000
• interpretation: Current liabilities exceed current assets, indicating tight liquidity and reliance on short-term funding. Inventory management (¥197.8bn) and receivables collection will be key. solvency:
• total_assets: 1320788000000
• total_liabilities: 1227159000000
• total_equity: 277472000000
• debt_to_equity: 4.42x (liabilities/equity)
• equity_ratio_estimate: ≈21.0% (equity/assets), while the reported Equity Ratio field is unreported at 0.0%.
• interpretation: Leverage is high but typical for auto OEMs with captive finance or large payables. Cushion exists but could compress if profitability weakens. capital_structure: Balance sheet is liability-heavy with equity of ¥277.5bn supporting ¥1.32tn in assets. Interest cost (¥6.8bn) is manageable for now but sensitive to rate and spread movements.

Cash Flow Quality

earnings_quality: Indeterminable from reported data: OCF, investing, financing, and cash balances are unreported. The OCF/NI ratio of 0.00 is not meaningful and should not be interpreted as zero cash generation. free_cash_flow:

• fcf: Not assessable (OCF and capex unreported)
• commentary: Without OCF and capex, FCF coverage of dividends and debt service cannot be evaluated. Working capital trends remain a key unknown. working_capital: Negative working capital suggests dependency on payables and advances. Inventory is ¥197.8bn; improvements in inventory turns and receivable collections would enhance cash conversion.

Dividend Sustainability

payout_ratio_assessment: Payout ratio is reported at 0% with DPS of ¥0, indicating no dividend distribution despite positive earnings. fcf_coverage: Not assessable due to unreported OCF and capex; the reported 0.00x is not informative. policy_outlook: Given tight liquidity (current ratio <1), high leverage, and absent cash flow disclosure, a conservative stance on dividends appears likely until cash generation and balance sheet resilience are demonstrably stronger.

Risk Assessment

Business Risks:

• Cyclical demand in commercial vehicles across domestic and export markets
• Raw material and logistics cost volatility impacting margins
• Supply chain constraints affecting production and deliveries
• Competitive pricing pressure in trucks and buses
• After-sales and warranty cost variability

Financial Risks:

• Tight liquidity with negative working capital and sub-1.0 current ratio
• High leverage (liabilities/equity 4.42x) and interest expense sensitivity
• Refinancing and short-term funding rollover risk
• Limited visibility due to unreported cash flow and D&A
• Potential covenant pressure if profitability declines

Key Concerns:

• Absence of cash flow disclosure prevents validating earnings quality
• Equity ratio field unreported; reliance on calculated ~21%
• Unreported D&A and EBITDA impede operating cash proxy analysis
• Revenue decline (-12.4% YoY) despite profit rebound raises sustainability questions

Investment Implications

Key Takeaways:

• Margins recovered strongly: operating margin ~5.1% despite a 12.4% revenue decline
• ROE of 8.11% is leverage-supported; margin and turnover remain moderate
• Liquidity is tight (current ratio 81.9%, negative working capital of ¥185.2bn)
• Leverage is elevated (liabilities/equity 4.42x); interest coverage ~5.6x is adequate but not ample
• Cash flow, D&A, and cash balance are unreported, limiting assessment of earnings quality and FCF
• Dividend remains suspended (DPS ¥0), likely pending cash flow and balance sheet strengthening

Metrics to Watch:

• Operating cash flow and free cash flow once disclosed
• Gross and operating margin trajectory
• Inventory levels and turnover; receivables collection
• Interest expense and coverage ratio
• Equity ratio and net debt metrics (when cash is disclosed)
• Order intake/backlog and unit shipment recovery

Relative Positioning: Operationally improving margins in a down-revenue environment suggest better execution versus prior periods, but balance sheet and liquidity remain weaker than ideal for the sector; limited cash flow visibility constrains relative 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