FURUYA METAL CO.,LTD. FY2026 FY Earnings Report

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Executive Summary

The Company reported a substantial increase in both revenue and earnings, driven by growth in high-margin segments such as Thin Films and Fine Chemicals, as well as a recovery in precious-metals demand. Revenue was ¥100.14B (+74.5% YoY), Operating Income was ¥24.79B (+160.0%), Ordinary Income was ¥24.66B (+162.7%), and Net Income attributable to owners of the parent was ¥16.03B (+147.9%). Profit growth substantially outpaced revenue growth, reflecting strong operating leverage resulting from an improved product mix and the relative containment of SG&A expenses.

Factors Affecting Performance

【Revenue】Revenue was ¥100.14B, up +74.5% from ¥57.38B in the previous year. By segment, Fine Chemicals & Recycling, the largest segment, remained solid at ¥27.70B (+5.2%), while Supply Chain Support at ¥19.04B (+148.8%), Thin Films at ¥18.03B (+60.0%), and Electronics at ¥10.81B (+83.0%) posted strong growth. “Other,” outside the reported segments, also expanded sharply to ¥17.86B (+1212.5%), primarily due to an agile response that included ¥16.56B in precious-metals sales (iridium and ruthenium) from raw-material inventories; this revenue has a non-recurring component. By region, revenue increased in all regions: Japan ¥27.50B (+24.6%), Asia (excluding Japan) ¥39.15B (+172.1%), North America ¥14.10B (+55.3%), and Europe ¥19.39B (+63.8%), with particularly strong growth in Asia serving as the main driver.

【Profitability】Gross profit was ¥30.27B, with a gross margin of 30.2%, improving by +5.5pt from 24.7% in the previous year. SG&A expenses remained limited to ¥5.48B (+17.8%), well below the +74.5% growth in revenue, resulting in an expansion of the operating margin to 24.8%, up +8.2pt from 16.6% in the previous year. Non-operating income and expenses were broadly offset, with a ¥1.44B gain on valuation of derivatives approximately offsetting ¥0.94B in interest expense and ¥1.20B in foreign exchange losses. Consequently, Ordinary Income of ¥24.66B remained nearly at the same level as Operating Income. Although the Company recorded an impairment loss of ¥0.20B as an extraordinary loss, a temporary factor, its impact was immaterial. Net Income attributable to owners of the parent was ¥16.03B (+147.9%), and the effective tax rate was approximately 34.4% (income taxes of ¥8.42B / profit before tax of ¥24.46B). The results were characterized by both higher revenue and earnings, together with a structural improvement in profit margins.

Segment Analysis

Segment profit, based on gross profit and totaling ¥30.27B, was led by Thin Films at ¥9.49B (+120.5% from ¥4.31B in the previous year), followed by Fine Chemicals & Recycling at ¥9.16B (+41.9%). Electronics at ¥3.36B (+94.4%) and Thermal at ¥2.33B (+50.3%) also grew. Supply Chain Support expanded sharply to ¥2.33B from ¥0.04B in the previous year, while “Other,” outside the reported segments, also increased substantially to ¥3.60B from ¥0.11B. However, both segments are more susceptible to inventory sales of precious-metal raw materials and market conditions, and their earnings are somewhat less recurring than those of Thin Films and Fine Chemicals. Overall, high-margin segments—Thin Films and Fine Chemicals—account for approximately 60% of total profit and are the primary drivers of margin improvement.

Key Financial Indicators

【Profitability】The operating margin was 24.8%, up +8.2pt from 16.6% in the previous year, while the net profit margin, based on income attributable to owners of the parent, was 16.0%, compared with 11.3% in the previous year. ROE was 20.4%, a substantial increase from approximately 10.4% in the previous year. 【Cash Quality】Operating Cash Flow (OCF) was ¥15.76B, equivalent to 0.98x Net Income of ¥16.03B and generally consistent with earnings. However, the ¥2.73B difference from the ¥18.49B subtotal of OCF before changes in working capital was absorbed by increases in inventories and accounts receivable, requiring monitoring of cash-conversion efficiency. 【Investment Efficiency】Total asset turnover improved to 0.70x from 0.46x in the previous year. EPS was ¥652.00 (+147.6% from ¥263.29), and BPS was ¥3,185.12 (+21.5% from ¥2,622.14). 【Financial Soundness】The Equity Ratio was 54.9%, up +2.9pt from 52.0% in the previous year. The current ratio was approximately 215% (current assets of ¥115.13B / current liabilities of ¥53.51B), while interest-bearing debt was ¥13.80B, equivalent to 0.18x equity. Leverage was therefore low, and the financial foundation remained sound.

Cash Flow Analysis

OCF was ¥15.76B, a substantial increase from ¥0.92B in the previous year, and was generally consistent at 0.98x Net Income of ¥16.03B. Against the ¥18.49B subtotal before changes in working capital, an increase in inventories of ¥9.54B and an increase in trade receivables of ¥4.04B absorbed cash, while an increase in trade payables of ¥11.63B partially offset this impact, resulting in actual OCF of ¥15.76B. Investing Cash Flow was -¥3.95B, primarily reflecting ¥3.01B in capital expenditures. Financing Cash Flow was -¥17.29B, mainly consisting of the full repayment of ¥13.40B in short-term borrowings, net repayment of ¥1.40B in long-term borrowings, and dividend payments of ¥2.36B. As a result, Free Cash Flow was ¥11.82B, comfortably covering the combined funding requirements for capital expenditures and dividend payments. The accumulation of inventories and receivables during the period of revenue growth warrants close monitoring from the perspective of cash-conversion efficiency in subsequent periods.

Earnings Quality

Earnings were primarily driven by Operating Income of ¥24.79B from the core business. Non-operating income and expenses consisted of income of ¥2.07B and expenses of ¥2.20B, which were nearly offsetting and had a limited net impact. Non-operating income included a ¥1.44B gain on valuation of derivatives, while non-operating expenses included a ¥1.20B foreign exchange loss and ¥0.94B in interest expense; these items broadly offset one another. The only extraordinary loss was an impairment loss of ¥0.20B, representing approximately 1.3% of Net Income attributable to owners of the parent, indicating a limited impact from temporary factors. Comprehensive Income was ¥16.21B, only ¥0.17B above Net Income of ¥16.04B. The main factors behind the difference were foreign currency translation adjustments of ¥0.04B and adjustments related to retirement benefits of ¥0.12B, with no significant divergence identified from an accrual perspective. However, the increase in inventories and receivables, which compressed OCF, requires monitoring from the perspective of the cash backing of earnings.

Earnings Forecast and Guidance

The Company announced the following forecast for the next fiscal year: Revenue of ¥101.00B (+0.9% compared with current-period actual results), Operating Income of ¥26.50B (+6.9%), Ordinary Income of ¥26.00B (+5.4%), EPS of ¥719.53, and a dividend of ¥180. While the current period achieved rapid expansion of +74.5% in revenue and +160.0% in Operating Income, the plan for the next period assumes a more conservative outlook with substantially slower revenue growth. This appears to reflect the non-recurring nature of factors contributing to the current period’s growth, including precious-metals sales from raw-material inventories and the sharp expansion of Supply Chain Support.

Shareholder Returns

The dividend for the current period was ¥165 (year-end), resulting in a Payout Ratio of 25.3%, based on total dividends of ¥4.06B relative to Net Income attributable to owners of the parent of ¥16.03B. The Company plans to increase the dividend to ¥180 in the next period and has also disclosed a revision to its most recently announced dividend forecast. There were no share repurchases (ShareRepurchases 0), and shareholder returns are centered on dividends. Free Cash Flow of ¥11.82B substantially exceeded dividend payments of ¥2.36B, and financial leverage was low; accordingly, dividend sustainability is considered to be at a sound level.

Risk Factors

1. Working Capital Expansion and Cash Conversion: Inventories increased by +¥5.65B (+136.2%), while trade receivables increased by +¥4.06B (+117.7%), compressing OCF from the ¥18.49B subtotal before changes in working capital to ¥15.76B. Optimization of inventories and receivables during periods of revenue growth remains a key issue.

2. Volatility in Foreign Exchange and Derivative Valuations: The Company recorded a ¥1.20B foreign exchange loss in the current period, while a ¥1.44B gain on valuation of derivatives offset this loss. Both items are affected by market conditions and foreign exchange movements and should be noted as potential sources of volatility in subsequent periods.

3. Temporary and Market-Dependent Revenue Composition: The sharp expansion of “Other” and Supply Chain Support was substantially attributable to agile measures, including precious-metals sales from raw-material inventories (Revenue of ¥16.56B). This structure is susceptible to fluctuations in precious-metals market conditions and supply-demand trends.

Industry Benchmark (Reference; Compiled by the Company)

Profitability and Returns

Growth and Capital Efficiency

※Source: Compiled by the Company

Key Takeaways from the Financial Results

1. The sharp expansion of the operating margin to 24.8% (+8.2pt from 16.6% in the previous year) reflects operating leverage arising from the high-margin mix of Thin Films and Fine Chemicals and the relative containment of SG&A expenses (+17.8% versus +74.5% for Revenue), confirming a trend of structural margin improvement.

2. OCF was compressed from the ¥18.49B subtotal before changes in working capital to ¥15.76B due to the accumulation of inventories and receivables. Working-capital management during the period of revenue growth will be an execution priority from the next period onward.

3. The Company’s plan for the next period assumes substantially slower growth than the current-period results, with Revenue of +0.9% and Operating Income of +6.9%. The plan appears conservative and incorporates the potential reversal of factors behind the current period’s rapid expansion, including precious-metals market conditions and sales from raw-material inventories.

Theoretical Share Price (Reference Value)

This is a reference range mechanically calculated solely from publicly disclosed data using a residual income model (Ohlson-type model with an explicit five-year fade period). It is not a forecast of the market share price or a recommendation of any specific investment action.

Sensitivity: ¥4,484–¥4,759 at ±1% for the cost of equity, and ¥4,580–¥4,677 at ±0.1 for ω.

(Calculation model: Residual Income Model / Interest-rate reference month: 2026-07 / This value does not predict or guarantee the future share price.)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings-release data. It does not recommend investment in any specific security. The industry benchmark is reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own responsibility, after consulting with a professional as necessary.

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