Yokohama Maruuo Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥18.75B
• Operating Income: ¥132M
• Net Income: ¥235M
• EPS: ¥36.30

Income Statement

Balance Sheet

Cash Flow Statement

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

For FY2026 Q2, Yokohama Maruuo (8045) delivered relatively stable topline and bottom-line results in a low-margin wholesale model, with revenue of ¥18.745bn (-0.9% YoY) and net income of ¥231m (-0.1% YoY). Operating income declined slightly to ¥132m (-2.6% YoY), indicating modest pressure at the core business level. Gross profit was ¥1.611bn, translating to a gross margin of 8.6%, which aligns with the thin-margin profile typical of seafood wholesale and market distribution businesses. The operating margin was 0.7% (¥132m/¥18.745bn), reflecting a high SG&A load relative to gross profit and limited pricing power. Ordinary income of ¥360m materially exceeded operating income, implying sizable non-operating contributions (e.g., financial income, equity-method income, or other non-operating gains), which helped offset the softness in operations. Net profit margin stood at 1.23%, supported by the non-operating layer and a normalizing tax burden. Based on net income of ¥231m and income tax of ¥80m, the implied effective tax rate is approximately 25.7%, suggesting the reported 0.0% calculated tax rate metric is not representative and likely a data artifact. The DuPont profile shows low ROE of 1.22% driven by a low net margin (1.23%) and moderate asset turnover (0.68x), against modest financial leverage (assets/equity 1.46x). Cash conversion was weak this half: operating cash flow was negative at ¥-158m, resulting in an OCF/NI ratio of -0.68, likely due to working capital swings inherent in the business. Liquidity remains conservative, with a current ratio of 201% and quick ratio of 165%, and a low debt load (liabilities/equity 0.42x), indicating ample short-term coverage and balance sheet strength. Inventory of ¥1.338bn appears manageable relative to the scale of operations, though working capital discipline remains a key lever for cash generation. EBITDA of ¥229m (1.2% margin) underscores low operating leverage but also a relatively light interest burden (interest expense ¥2m; interest coverage ~66x). Free cash flow cannot be reliably derived here because investing cash flows and capex disclosures are not provided in detail; the presented FCF “0” should be treated as undisclosed rather than true zero. Dividend information is not disclosed (DPS 0.00 shown), so payout activity cannot be assessed for this period. Overall, the company exhibits stable revenues and earnings resilience aided by non-operating income, strong liquidity and low leverage, but with soft core operating profitability and weak cash conversion in the period.

Profitability Analysis

ROE is 1.22%, decomposed as Net Profit Margin 1.23% x Asset Turnover 0.68x x Financial Leverage 1.46x. The low ROE primarily reflects thin net margins characteristic of the wholesale seafood sector and moderate asset intensity. Gross margin is 8.6% (¥1.611bn/¥18.745bn), and operating margin is 0.7% (¥132m/¥18.745bn), indicating SG&A absorption remains heavy; implied SG&A is roughly ¥1.479bn. Ordinary income margin is stronger at 1.9% (¥360m/¥18.745bn), highlighting reliance on non-operating income to bridge from operating to net. EBITDA of ¥229m (1.2% margin) suggests limited operating leverage, but also low fixed financial costs (interest expense ¥2m; coverage ~66x). YoY declines in operating income (-2.6%) slightly outpaced the revenue dip (-0.9%), implying modest negative operating leverage this half. Margin quality is mixed: gross margin held up, but the gap between ordinary and operating income signals a non-operating lift that may be less repeatable. Effective tax rate, inferred from income tax (¥80m) and net income (¥231m), is ~25.7%, consistent with normal taxation levels.

Growth Assessment

Revenue decreased slightly by 0.9% YoY to ¥18.745bn, suggesting stable demand conditions with minor softness. Net income was essentially flat (-0.1% YoY) despite lower operating income (-2.6% YoY), implying non-operating items buffered the profit line. The sustainability of revenue appears reasonable given scale and market positioning in wholesale seafood distribution, but volumes and unit prices are sensitive to catch conditions, import mix, and FX. Profit quality is mixed: core operating profit is thin and under pressure, whereas ordinary income indicates benefits from non-operating sources that may be volatile. Outlook hinges on disciplined SG&A control, procurement/pricing execution, and working capital management, as well as external drivers like seafood price trends and yen movements. With EBITDA margin at 1.2% and operating margin at 0.7%, incremental growth may not drop through strongly without cost efficiencies. Near-term, maintaining gross margin and narrowing the gap between ordinary and operating income would improve earnings quality.

Financial Health

Total assets are ¥27.557bn and total equity is ¥18.877bn, implying financial leverage (assets/equity) of 1.46x and liabilities/equity of 0.42x—conservative for a wholesaler. Liquidity is strong: current ratio 201.2% and quick ratio 164.5%, supported by working capital of ¥3.685bn (current assets ¥7.326bn minus current liabilities ¥3.641bn). Inventories are ¥1.338bn, manageable relative to revenue, though turnover data are not disclosed. Interest expense is minimal at ¥2m and interest coverage is ~66x (operating income/interest), underscoring low financial risk. The reported equity ratio (0.0%) appears undisclosed rather than reflective of the balance sheet; based on totals, the implied equity ratio is roughly 68.5% (¥18.877bn/¥27.557bn). Overall solvency is robust with ample equity buffer and limited reliance on debt.

Cash Flow Quality

Operating cash flow of ¥-158m versus net income of ¥231m yields an OCF/NI ratio of -0.68, indicating weak cash conversion this period, likely driven by working capital outflows (receivables/inventory build or payables reduction). Depreciation and amortization is ¥97m, so accrual earnings are modest; nevertheless, cash timing effects dominated. Free cash flow is not derivable with confidence because capex is not separately disclosed; investing CF is presented as 0, which likely indicates non-disclosure rather than true zero. EBITDA of ¥229m and low interest costs suggest underlying cash generation capacity exists, but effective conversion depends on inventory and receivables discipline. Monitoring OCF relative to net income, inventory days, and receivables collection will be key to assessing earnings quality in subsequent periods.

Dividend Sustainability

Dividend data are not disclosed for the period (DPS shown as 0.00; payout ratio 0.0%), so we cannot assess actual distribution activity. With net income of ¥231m and negative operating cash flow, near-term cash coverage of dividends would depend on working capital normalization and cash on hand (cash balance not disclosed). The balance sheet is conservatively levered, which supports potential flexibility, but dividend policy signals are unavailable in this dataset. Assessing sustainability will require clarity on annual DPS policy, target payout, and full-year FCF once capex is known.

Risk Assessment

Business Risks:

• Seafood price and volume volatility driven by catch conditions and seasonality
• Foreign exchange exposure on imported seafood (yen depreciation raises procurement costs)
• Thin margins with limited pricing power in wholesale markets
• Dependence on key suppliers and market channels within central wholesale systems
• Food safety, quality control, and cold-chain execution risks
• Energy and logistics cost inflation impacting distribution and cold storage
• Competitive pressures from alternative distribution channels and large trading companies

Financial Risks:

• Weak cash conversion in the period (OCF/NI -0.68) due to working capital swings
• Earnings reliance on non-operating income to lift ordinary profit above operating profit
• Potential inventory valuation risk amid price volatility
• Exposure to credit risk from downstream buyers in a low-margin environment

Key Concerns:

• Sustainability of ordinary income uplift versus core operating performance
• Working capital management to restore positive operating cash flow
• Maintaining gross margin amid input cost and FX fluctuations

Investment Implications

Key Takeaways:

• Topline and net income were resilient despite slight declines, but operating profit softened
• ROE is low at 1.22% due to thin margins and moderate asset turnover
• Ordinary income meaningfully exceeds operating income, highlighting non-operating dependency
• Liquidity and solvency are strong with low leverage (liabilities/equity 0.42x) and ample working capital
• Cash conversion was weak this half; OCF/NI at -0.68 warrants close monitoring

Metrics to Watch:

• OCF/Net income and working capital changes (inventory and receivables days)
• Gap between ordinary income and operating income (quality of earnings)
• Gross margin and operating margin progression
• Asset turnover and inventory turnover
• Capex and Investing cash flows (for FCF assessment)
• FX exposure and procurement price trends

Relative Positioning: Within the domestic seafood wholesale peer set, the company displays a conservative balance sheet and strong liquidity, but weaker cash conversion this period and continued reliance on non-operating income to support profits; core operating margins remain thin relative to the sector’s already low base.

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