| Metric | Current Period | Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥618.5B | ¥578.1B | +7.0% |
| Operating Income | ¥41.7B | ¥39.3B | +6.0% |
| Ordinary Income | ¥42.6B | ¥40.3B | +5.6% |
| Net Income | ¥28.7B | ¥27.9B | +2.7% |
| ROE | 1.7% | 1.7% | - |
Although revenue and profits increased, the gross profit margin declined slightly as the increase in the cost ratio caused by higher raw material and energy costs absorbed part of the benefit of higher revenue, while an improvement in the SG&A ratio offset this effect. Revenue was ¥618.5B (¥578.1B in the previous year, YoY +7.0%), Operating Income was ¥41.7B (up +6.0%), and Ordinary Income was ¥42.6B (up +5.6%). Consolidated Net Income was ¥28.7B (up +2.7%), while Net Income attributable to owners of the parent was ¥28.3B (up +1.0%), below the growth in Operating Income mainly due to an increase in the effective tax rate (30.4%→32.4%), among other factors. The Company operates in a single segment, the Related Business for Simple Food Containers, and resilient domestic demand appears to have driven the increase in revenue.
【Revenue】Revenue was ¥618.5B, an increase of +7.0% from ¥578.1B in the previous year. The Company operates in a single segment, the Related Business for Simple Food Containers, and does not disclose a breakdown by business; however, the steady trend in demand appears to have been the primary driver of the revenue increase.
【Profit and Loss】The cost of sales ratio increased from 68.3% to 68.9%, while the gross profit margin declined by approximately 0.6pt from 31.7% to 31.1%. Meanwhile, the SG&A ratio improved from 24.9% to 24.4%, and the two effects offset each other, resulting in an almost flat Operating Income margin (6.79%→6.74%). Operating Income was ¥41.7B (YoY +6.0%). Non-operating income and expenses were broadly in line with the previous year, and Ordinary Income was ¥42.6B (YoY +5.6%). Extraordinary losses were limited to a loss on disposal and sale of property, plant and equipment of ¥0.1B, resulting in a minor impact. Consolidated Net Income was ¥28.7B (YoY +2.7%), reflecting the higher effective tax rate and a shift in income attributable to non-controlling interests, while Net Income attributable to owners of the parent was ¥28.3B (YoY +1.0%), indicating slower growth than at the Operating Income and Ordinary Income levels. In conclusion, both revenue and profits increased.
The Company operates in a single segment, the Related Business for Simple Food Containers, and does not disclose segment-specific information.
【Profitability】The Operating Income margin was 6.7% (6.8% in the previous year), the Ordinary Income margin was 6.9% (7.0% in the previous year), and the consolidated Net Income margin was 4.6% (4.8% in the previous year), all showing a slight declining trend. 【Cash Flow Quality】Operating Cash Flow was ¥73.8B, approximately 2.6 times consolidated Net Income of ¥28.7B, indicating strong cash backing for earnings. 【Investment Efficiency】ROE was 1.7% (based on Net Income attributable to owners of the parent), EPS was ¥35.03 (on the same basis, YoY +1.0%), and BPS was ¥2,027.44, a slight decrease from ¥2,033.28 in the previous year. 【Financial Soundness】The Equity Ratio was 52.2% (54.1% in the previous year), representing a slight decline, while total assets increased +3.8% year on year to ¥3,155.5B. Interest-bearing debt, comprising total short-term and long-term borrowings, increased to ¥669.6B, and the expansion of the balance sheet during a period of increased capital investment has contributed to the decline in the Equity Ratio.
Operating Cash Flow was ¥73.8B, an increase of +61.9% from ¥45.6B in the previous year. The primary factor was an increase in accounts payable of (+¥48.0B), which exceeded the cash absorption from increases in accounts receivable (-¥29.8B) and inventories (-¥13.9B). Investing Cash Flow was -¥101.0B, primarily due to capital expenditures of ¥100.6B (a substantial increase from ¥27.3B in the previous year), making investing activities the main source of funding demand. Financing Cash Flow was positive at +¥24.9B, due to the procurement of ¥90B in long-term borrowings and other factors, partially covering investment funding while also funding dividend payments of ¥33.1B. As a result, Free Cash Flow (Operating CF + Investing CF) was -¥27.2B, indicating that while the Company’s ability to generate Operating Cash Flow remains solid, capital investment is front-loaded and the Company is in a phase of investment exceeding internally generated funds.
Extraordinary losses were limited to a ¥0.1B loss on disposal and sale of property, plant and equipment, and their impact on the recurring earnings structure was limited. Non-operating income and expenses were modest, comprising non-operating income of ¥2.6B (including dividend income of ¥0.6B) and non-operating expenses of ¥1.7B (including interest expenses of ¥1.3B). Accordingly, the difference between Ordinary Income and Operating Income was primarily attributable to this small amount of net non-operating income. Comprehensive Income was ¥29.2B, with the difference from consolidated Net Income of ¥28.7B limited to approximately ¥0.5B. The impact of other comprehensive income items, including adjustments related to retirement benefits (-¥0.4B) and valuation differences on securities (-¥0.1B), was limited. Considering that Operating Cash Flow has remained above Net Income, the quality of earnings for the current period can be assessed as generally good.
The annual dividend forecast is ¥73.00 per share, with no revision to the dividend forecast during the quarter. Operating Cash Flow, the source of funds for dividends, was ¥73.8B and exceeded dividend payments of ¥33.1B during the period, providing sufficient coverage for dividend payments in terms of cash generation. However, Free Cash Flow was negative due to increased capital investment, making the balance between investment and shareholder returns a key monitoring point for future capital allocation.
Rising raw material and energy costs: The cost of sales ratio increased from 68.3% to 68.9%, while the gross profit margin declined by approximately 0.6pt from 31.7% to 31.1%. The progress of passing higher costs on to customers will determine future margin trends.
Increased capital investment and funding burden: Capital investment increased substantially to ¥100.6B from ¥27.3B in the previous year, resulting in Free Cash Flow of -¥27.2B. Long-term borrowings also increased to ¥499.2B (+10.5% year on year), making progress in recovering the investment a key financial area to monitor.
Increase in working capital: Accounts receivable reached ¥451.7B (+7.1%), and inventories reached ¥276.2B. Although these increases were partially offset by an increase in accounts payable to ¥314.1B (+18.0%), the degree of funds tied up in working capital requires monitoring.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 6.7% | 8.8% (4.3%–14.4%) | -2.1pt |
| Net Income Margin | 4.6% | 7.3% (3.3%–10.6%) | -2.6pt |
Both the Operating Income margin and Net Income margin are below the industry median, indicating that profitability is relatively low compared with peers.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (Year on Year) | 7.0% | 6.6% (-0.5%–14.7%) | +0.4pt |
The Revenue Growth Rate is slightly above the industry median, indicating that top-line growth is at or slightly better than the level of peers.
※Source: Compiled by the Company
Revenue growth has continued, but the gross profit margin declined by approximately 0.6pt from the previous year due to the higher cost ratio, with the impact offset by an improvement in the SG&A ratio. The balance between passing on higher costs and controlling costs will determine future margin trends.
Capital investment was expanded substantially year on year to ¥100.6B, resulting in negative Free Cash Flow. The ability to generate Operating Cash Flow itself remains strong, and a key focus will be whether the benefits of the investment are reflected in fixed-cost absorption and profitability going forward.
The Equity Ratio declined to 52.2% from 54.1% in the previous year, while interest-bearing debt also expanded. Profit growth has been moderate relative to the +3.8% increase in total assets, making trends in capital efficiency a structural area of observation.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting with a professional adviser as necessary.
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