FURUYA METAL CO.,LTD. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥23.20B
• Operating Income: ¥3.41B
• Net Income: ¥1.62B
• EPS: ¥94.76

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

Furuya Metal Co., Ltd. (Consolidated, JGAAP) delivered strong topline momentum in FY2026 Q1, with revenue of ¥23.201bn, rising 66.9% YoY, indicating robust demand and/or higher precious metal price pass-through. Despite the large sales increase, operating income grew 23.1% YoY to ¥3.410bn, implying margin compression and negative operating leverage in the quarter. Gross profit was ¥3.769bn, yielding a gross margin of 16.2%, which is consistent with a materials/processing model where precious metal price pass-through dilutes margin percent during up-cycles. Operating margin was approximately 14.7% (¥3.410bn / ¥23.201bn), healthy in absolute terms but likely lower YoY given revenue growth outpaced operating profit growth. Ordinary income of ¥3.356bn reflects an interest expense burden (¥278m) but remains close to operating income, indicating limited non-operating drag. Net income reached ¥2.328bn (+43.1% YoY), with a net margin of 10.0%, demonstrating resilient bottom-line performance despite margin dilution above the operating line. DuPont decomposition suggests a calculated ROE of 3.61% for the period, based on a net margin of 10.03%, asset turnover of 0.198, and financial leverage of 1.81x; these point to value creation driven primarily by profitability rather than asset turns in the quarter. Liquidity appears strong: current assets of ¥99.708bn versus current liabilities of ¥46.552bn equate to a current ratio of 214% and a quick ratio of 205%, reflecting ample short-term coverage. Balance sheet strength is solid with total equity of ¥64.561bn against total assets of ¥117.047bn, implying an equity ratio around 55% (notwithstanding the reported 0.0% placeholder), and a debt-to-equity ratio of 0.92x. Interest coverage of 12.3x indicates comfortable solvency. Working capital stands at ¥53.156bn, providing a buffer to manage commodity price volatility and lead times. Cash flow figures (OCF, FCF, and capex/DA) are unreported in this snapshot; therefore, cash flow quality metrics like OCF/NI and FCF coverage cannot be assessed and the provided zero values should be treated as missing data, not actual zeros. Similarly, depreciation/amortization and EBITDA are not disclosed; thus EBITDA margin and capex intensity cannot be evaluated this quarter. Dividend and share count data are also not disclosed here (EPS is provided at ¥94.76), limiting payout and per-share book metrics analysis. Overall, Q1 shows strong sales and solid profits with manageable leverage and healthy liquidity, but margin compression implies elevated raw material inputs or mix effects, and the absence of cash flow disclosure is a key limitation for assessing earnings quality.

Profitability Analysis

ROE_decomposition: Net profit margin 10.03% × asset turnover 0.198 × financial leverage 1.81 = ROE 3.61% (period basis). This indicates profitability (margin) is the primary contributor, with modest asset intensity and moderate leverage. margin_quality: Gross margin 16.2% (¥3.769bn/¥23.201bn) and operating margin ~14.7% indicate limited operating opex burden (SG&A and other operating costs roughly ¥0.36bn). The gap between gross and operating margin is small, suggesting efficient cost control; however, the YoY spread likely widened negatively given revenue outpaced operating income growth (66.9% vs 23.1%). Net margin of 10.0% reflects manageable non-operating items despite ¥278m interest. operating_leverage: Negative in this quarter: revenue +66.9% YoY versus operating income +23.1% YoY implies dilution of operating margin. Drivers likely include raw material price pass-through, product mix shifts, and possibly higher variable costs tied to volumes. Interest coverage at 12.3x remains robust, so financial leverage did not drive earnings volatility.

Growth Assessment

revenue_sustainability: Sales growth of +66.9% YoY is outsized and likely reflects a combination of volume recovery in end-markets (e.g., semiconductors, industrial catalysts) and precious metals price effects. Such growth rates are unlikely to be linear; sustainability depends on underlying end-demand and PGM price trajectories. profit_quality: Operating income grew +23.1% YoY to ¥3.410bn, trailing sales growth, suggesting mix/price effects and cost pass-through dynamics constrained margin expansion. Ordinary income tracked operating profit closely, indicating earnings are primarily operating-driven with limited reliance on non-operating gains. outlook: With strong liquidity and working capital, the company is positioned to support demand. Near-term profitability will hinge on gross margin stabilization amid commodity price volatility. Monitoring backlog/booking trends in semiconductor and industrial applications and PGM price levels will be crucial to gauge whether current revenue momentum can normalize at a higher base.

Financial Health

liquidity: Current assets ¥99.708bn vs current liabilities ¥46.552bn yields a current ratio of 214% and a quick ratio of 205%, indicating ample short-term coverage. Inventories of ¥4.146bn are modest relative to current assets, implying a heavy weighting to cash/receivables or precious metal-related financial assets. solvency: Total liabilities ¥59.284bn vs equity ¥64.561bn implies debt-to-equity of 0.92x and an inferred equity ratio near 55% (64.561/117.047). Interest coverage is 12.3x, indicating strong ability to service interest. Balance sheet resilience is sound. capital_structure: Financial leverage (assets/equity) is 1.81x per DuPont, consistent with moderate leverage for a materials processor exposed to commodity cycles. The structure provides flexibility without overextending solvency metrics.

Cash Flow Quality

earnings_quality: Cash flow data (OCF, capex, FCF) are not disclosed in this snapshot; the displayed zeros should be treated as missing. Consequently, OCF/NI and cash conversion cannot be assessed for Q1. FCF_analysis: Free cash flow is unreported. Given the working capital intensity typical of precious metals handling, FCF may be sensitive to price and volume swings; however, no quarter-specific conclusions can be drawn without OCF and capex. working_capital: Working capital is ¥53.156bn, providing operational flexibility. Inventories are modest (¥4.146bn), which may mitigate markdown risk, but receivables and precious metal-related balances (not itemized here) can drive cash flow variability.

Dividend Sustainability

payout_ratio_assessment: Dividend information is not disclosed for the period (DPS and payout ratio show as 0.00 placeholders). With EPS at ¥94.76 for Q1, payout capacity appears supported by earnings, but actual policy cannot be inferred from this dataset. FCF_coverage: FCF data are unreported; coverage metrics cannot be calculated. Historically for cyclical, materials-type businesses, sustainable dividends hinge on OCF through cycles, which we cannot assess here. policy_outlook: Absent disclosed DPS or guidance, we assume continuity with a disciplined payout framework tied to earnings and investment needs; confirmation requires management commentary or full-year guidance.

Risk Assessment

Business Risks:

• Commodity price volatility in platinum group metals impacting revenue and margins
• End-market cyclicality (semiconductor equipment, industrial catalysts, medical devices)
• Product mix shifts affecting gross margin sustainability
• Supply chain and procurement risks for precious metals
• Customer concentration risk in specialized applications
• Regulatory/environmental compliance for precious metal processing

Financial Risks:

• Earnings sensitivity to working capital swings and metal price-linked balance sheet items
• Interest rate risk given interest expense of ¥278m despite good coverage
• Potential FX exposure on metal sourcing and exports
• Liquidity deployment risk if large precious metal positions are financed

Key Concerns:

• Negative operating leverage this quarter despite strong sales growth
• Absence of cash flow disclosure limits assessment of earnings quality and dividend capacity
• Margin sensitivity to commodity prices and pass-through mechanics

Investment Implications

Key Takeaways:

• Topline surged 66.9% YoY to ¥23.201bn; momentum is strong but likely influenced by commodity dynamics
• Operating income grew 23.1% YoY to ¥3.410bn; margins compressed, indicating negative operating leverage
• Net margin of 10.0% and ROE of 3.61% (period) show solid profitability with moderate leverage
• Liquidity is strong (current ratio 214%, quick ratio 205%); solvency healthy (equity ratio ~55%, D/E 0.92x)
• Interest coverage of 12.3x underscores manageable financing burden
• Cash flow, depreciation, capex, and dividend data are not disclosed; key for evaluating sustainability

Metrics to Watch:

• Gross and operating margin trends vs precious metal price movements
• OCF/Net income conversion and FCF once reported
• Working capital intensity (receivables and metal-related balances) and inventory turns
• Interest expense trajectory and net debt metrics
• Order trends in semiconductor and industrial applications
• Effective tax rate (estimated ~24% based on disclosed tax and profit) and any minority interest impacts

Relative Positioning: Within specialty materials and precious metal processors, the company exhibits strong liquidity and solid profitability with moderate leverage. However, its quarterly margin compression and high exposure to commodity dynamics suggest earnings quality will be judged on forthcoming cash conversion and margin resilience relative to peers.

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