OIE SANGYO CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥64.43B
• Operating Income: ¥1.98B
• Net Income: ¥1.51B
• EPS: ¥170.17

Income Statement

Balance Sheet

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend 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

Oie Sangyo Co., Ltd. reported solid top-line growth for FY2026 Q2 with revenue of ¥64.426bn, up 10.5% year over year, indicating continued demand resilience and likely successful price/pass-through in a foodservice distribution context. Gross profit reached ¥10.972bn, implying a gross margin of 17.0%, which is consistent with a distributor profile and suggests stable procurement and pricing discipline. Operating income was ¥1.983bn (+2.0% YoY), indicating modest profit growth but lagging revenue expansion, pointing to some margin pressure from costs (e.g., logistics, energy, labor) or a revenue mix shift. Ordinary income of ¥2.009bn implies limited non-operating contributions; however, the gap to net income highlights a higher tax burden or small extraordinary items. Net income declined 6.9% YoY to ¥1.411bn, which, alongside the slower operating income growth, suggests a combination of cost inflation and a normalized tax rate. Net margin stands at 2.19%, underscoring the thin-margin nature of the food distribution business. The DuPont decomposition yields ROE of 9.11%, built on a 2.19% net margin, asset turnover of 1.607x, and financial leverage of 2.59x—consistent with an efficient distributor employing moderate leverage. Balance sheet strength appears reasonable: total assets are ¥40.08bn and equity is ¥15.493bn, implying an equity ratio around 38.7% (computed), despite a reported 0.0% equity ratio metric. Liquidity is adequate with a current ratio of 131% and working capital of ¥6.265bn, appropriate for a business with significant receivables and payables dynamics. Debt-to-equity is 1.49x, within a manageable range for a stable, cash-generative distribution model. Interest expense is negligible (¥1m), and implied interest coverage is extremely high (c. 1,983x), indicating very low financial risk from debt service. Effective tax rate, inferred from net income and taxes, appears around the low-30% range, despite the provided 0.0% metric; this likely explains part of the YoY net profit decline. Cash flow statement items are unreported (shown as zero), limiting assessment of earnings-to-cash conversion this period. EPS is ¥170.17; back-solving indicates roughly 8.3 million average shares, though share data are not disclosed in the provided set. Dividend data are not disclosed (zero placeholder), so payout and FCF coverage cannot be assessed this quarter. Overall, Oie Sangyo’s results show healthy demand momentum but some operating margin pressure, a normalized tax burden, and maintained balance sheet resilience; cash flow and dividend visibility are the key data gaps to monitor.

Profitability Analysis

ROE_decomposition: ROE 9.11% = Net margin 2.19% × Asset turnover 1.607× × Financial leverage 2.59×. The ROE is primarily driven by efficient asset utilization typical of distributors, with modest leverage and thin but stable net margins. margin_quality: Gross margin is 17.0% on ¥10.972bn gross profit, consistent with category norms. Operating margin is approximately 3.08% (¥1.983bn/¥64.426bn), slightly compressed versus revenue growth, implying cost inflation or mix headwinds. Net margin at 2.19% reflects a normalized tax load and minimal non-operating effects. operating_leverage: Revenue grew 10.5% YoY while operating income rose 2.0% YoY, indicating negative operating leverage in the period (costs grew faster than gross profit). This suggests elevated logistics/energy/labor or promotional costs, or a shift to lower-margin segments.

Growth Assessment

revenue_sustainability: Top-line +10.5% YoY suggests robust demand and likely pass-through of higher input costs. Sustainability will depend on consumer traffic in foodservice, procurement stability, and competitive pricing dynamics. profit_quality: Operating income growth (+2.0% YoY) lagged sales, indicating margin pressure. Net income declined 6.9% YoY, likely due to a normalized effective tax rate and modest non-operating variances. Core profitability remains intact but under pressure. outlook: With mid-teen gross margins and low single-digit operating margins, profit trajectory hinges on cost control (logistics and labor), procurement benefits, and mix management. If cost inflation moderates and pricing discipline persists, margins could stabilize; otherwise, negative operating leverage could persist.

Financial Health

liquidity: Current assets ¥26.492bn vs. current liabilities ¥20.227bn yields a current ratio of 131% and working capital of ¥6.265bn. Inventories are unreported, so the quick ratio reading (131%) is not meaningful; liquidity nonetheless appears adequate for the operating cycle. solvency: Total liabilities ¥23.121bn vs. equity ¥15.493bn implies D/E of 1.49x. Equity ratio is approximately 38.7% (computed as ¥15.493bn/¥40.08bn), indicating a solid capital base. capital_structure: Leverage is moderate and interest burden is minimal (¥1m expense with ~1,983× coverage). The structure supports ongoing operations and working capital needs without near-term refinancing risk evident from the data provided.

Cash Flow Quality

earnings_quality: Operating cash flow is unreported this period; thus, OCF/Net Income and accruals quality cannot be assessed. Given the business model, working capital swings can materially affect period cash conversion. FCF_analysis: Investing and financing cash flows are unreported; Free Cash Flow is shown as zero due to non-disclosure. Capex intensity is unknown this period; depreciation is also unreported, so EBITDA-based assessments are not meaningful. working_capital: Receivables and payables dynamics are not detailed; inventories are unreported, limiting analysis of turnover and cash conversion cycle. Nonetheless, positive working capital (¥6.265bn) suggests headroom to absorb seasonal needs.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio are shown as zero due to non-disclosure; with EPS at ¥170.17, an actual payout ratio cannot be calculated from provided data. FCF_coverage: FCF is unreported; hence, dividend coverage by FCF cannot be assessed. policy_outlook: Without disclosed dividend figures or historical policy context in this dataset, we cannot infer policy direction. Monitoring official guidance and year-end dividend announcements is necessary.

Risk Assessment

Business Risks:

• Cost inflation in logistics, energy, and labor potentially compressing margins
• Procurement and supply chain disruptions impacting gross margin and service levels
• Competitive pricing pressure in foodservice distribution affecting pass-through ability
• Demand volatility tied to restaurant traffic and macro conditions
• Customer concentration risk typical in B2B distribution (not disclosed here but relevant to the sector)

Financial Risks:

• Working capital intensity and potential cash conversion volatility
• Exposure to credit risk from customers in the foodservice sector
• Limited visibility on capex and lease obligations due to unreported cash flow and depreciation data
• Potential refinancing needs not evident from data but always relevant to distributors with short-term funding reliance

Key Concerns:

• Negative operating leverage this period despite strong sales growth
• Unreported cash flow statements impede assessment of earnings quality
• Dividend information absent, limiting shareholder return visibility

Investment Implications

Key Takeaways:

• Healthy revenue growth (+10.5% YoY) but operating income growth lagged (+2.0% YoY), signaling margin pressure
• ROE of 9.11% driven by efficient asset turnover and moderate leverage
• Balance sheet appears sound with computed equity ratio ~38.7% and D/E 1.49x
• Interest burden is negligible; financial risk from debt service is low
• Cash flow and dividend data are not disclosed, limiting visibility on cash conversion and shareholder returns

Metrics to Watch:

• Operating margin trajectory and gross-to-operating spread
• Cost inflation indicators (logistics, labor) and pricing/pass-through effectiveness
• Working capital movements (receivables, payables, inventories) and OCF conversion
• Capex and depreciation trends to gauge maintenance vs. growth investment
• Effective tax rate normalization and impact on net income
• Any disclosed dividend policy and payout progression

Relative Positioning: Within Japanese foodservice distribution, Oie Sangyo exhibits typical thin margins but solid asset efficiency and moderate leverage; current results place it as operationally resilient with some cost-driven margin pressure relative to peers that have achieved stronger operating leverage in the recent inflationary cycle.

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