HANWA CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥1.28T
• Operating Income: ¥27.72B
• Net Income: ¥20.50B
• EPS: ¥417.90

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 Integrated Analysis

Analysis integrating XBRL data (GPT-5) and PDF earnings presentation (Claude)

Executive Summary

Hanwa Co., Ltd. (8078) reported consolidated FY2026 Q2 results under JGAAP with modest topline growth but softer earnings progression. Revenue rose 1.6% year over year to ¥1,279.1 billion, while operating income declined 4.0% to ¥27.7 billion, indicating some margin pressure amid a stable demand environment. Gross profit was ¥65.9 billion, resulting in a gross margin of 5.2%, broadly consistent with a metals and materials trading mix characterized by high volumes and thin spreads. Ordinary income came in at ¥23.9 billion, below operating income due to net non-operating expenses, including ¥4.5 billion of interest expense. Net income was ¥16.7 billion, down 17.2% year over year, reflecting both weaker non-operating results and a normalizing tax burden. EPS was ¥417.90 for the period. The DuPont framework points to a net margin of 1.31%, an asset turnover of 1.133x, and financial leverage of 2.85x, yielding an ROE of 4.23% for the period. Liquidity appears strong with a current ratio of 195.7% and a quick ratio of 135.3%, underpinned by ¥903.7 billion in current assets and ¥461.7 billion in current liabilities. Working capital of ¥442.0 billion provides meaningful operational flexibility despite a negative operating cash flow of ¥4.4 billion, likely driven by working capital absorption. The company’s capital structure shows liabilities of ¥776.3 billion versus equity of ¥396.0 billion, implying a debt-to-equity ratio of 1.96x and an equity multiplier consistent with the DuPont leverage factor. Interest coverage remains adequate at approximately 6.2x based on operating income. Cash flow disclosure is limited, with investing cash flow and cash balance reported as zero placeholders; these are unreported items rather than actual zeros. Dividend data are not disclosed in this dataset (DPS and payout ratio shown as zero represent non-disclosure), so distribution policy for the period cannot be assessed from these figures. The effective tax rate shown in the calculated metrics (0.0%) is not representative; using reported income tax of ¥9.5 billion and net income of ¥16.7 billion implies a normalized tax burden when considering pre-tax profit. Overall, the results suggest resilient revenue, stable gross profitability, and contained financial risk, but with softer ordinary and net income due to non-operating drag and taxes. Key areas to monitor are working capital dynamics, financing costs, and spread management in core trading businesses. Data limitations around cash and dividend items constrain full cash return and liquidity analysis; conclusions are based on available non-zero disclosures.

From Earnings Presentation: 阪和興業の2025年度Q2決算説明資料から、経常利益238億円（通期見通し550億円に対し進捗率43%）で通期予想は据え置きながら、在庫評価や一過性要因を除いた実力経常利益は248億円と堅調である。セグメント別では鉄鋼が建設資材・国内建設分野の堅調と一部海外子会社の採算改善で増益、食品が米国外食向け・新規連結子会社の寄与で大幅増益、一方でプライマリーメタルはSAMANCOR社の持分法損益マイナスで大幅減益、リサイクルメタルはアルミ・銅の採算悪化で減益、エネルギー・生活資材は前年同期のデリバティブ評価益の反動で減益となった。自己株式取得を追加50億円決定し、配当は中間125円、株式分割1対5を実施予定である。中計2025の投資枠800億円中578億円を執行済（進捗率72.4%）で、政策保有株式の縮減は3.5億円売却にとどまるものの資本効率改善を継続推進する方針である。XBRL分析の薄利多売構造・OCFマイナス・在庫積み上がりの指摘と整合し、経営陣は通期見通し達成に向けた下期の運転資本回収と市況安定を前提としている。

Financial Analysis

Profitability

ROE of 4.23% is driven by a thin net profit margin (1.31%), decent asset turnover (1.133x), and moderate leverage (equity multiplier 2.85x). Operating margin (operating income/revenue) is approximately 2.17% (¥27.7b/¥1,279.1b), indicating modest compression versus revenue growth (+1.6% YoY) as operating income fell 4.0% YoY. Gross margin at 5.2% underscores the trading-oriented model where pricing spreads and inventory valuation drive earnings; margin stability is vital. EBITDA was ¥32.4 billion, implying an EBITDA margin of 2.5% and offering an interest coverage cushion of roughly 7.2x on an EBITDA basis, 6.2x on operating income. Ordinary income (¥23.9b) trails operating income due to net non-operating expenses, notably ¥4.5b of interest expense, suggesting funding costs and/or lower non-operating gains weighed on profitability. The decline in net income (-17.2% YoY) versus a milder operating decline indicates pressure below the operating line and normalizing tax effects. Operating leverage appears limited: revenue growth did not translate into operating profit growth, implying spreads and SG&A efficiency did not expand with volume. Margin quality hinges on inventory valuation and mix in steel/metals, where price volatility can affect gross profit; sustained low-single-digit margins are consistent with peers in the sector. With leverage at 2.85x equity multiplier, ROE sensitivity to margin changes is material; small changes in net margin can meaningfully affect ROE in this model.

Growth

Revenue grew 1.6% YoY to ¥1,279.1b, indicating stable demand and volume/pricing in core trading segments. However, operating income decreased 4.0% to ¥27.7b, signaling that growth was not accompanied by improved spreads or operating efficiency. Ordinary income at ¥23.9b and net income at ¥16.7b reflect additional pressure from financing and non-operating items, with net down 17.2% YoY. The profit quality mix is skewed toward core operations but diluted by higher interest burden and fewer non-operating contributions. Sustainability of revenue depends on commodity price levels, steel/metals demand, and the company’s ability to manage inventory exposure; the flat-to-slight growth trajectory suggests normalization after prior periods of volatility. Outlook hinges on spread management, disciplined inventory control, and funding cost trends; improving working capital turns could support earnings conversion even without strong topline growth. With asset turnover at 1.133x, incremental growth will require either higher volumes or better capital efficiency. Absent disclosure of segment detail here, we infer steady end-market demand but cautious margin outlook given the operating income contraction.

Financial Health

Total assets are ¥1,128.8b and equity is ¥396.0b, resulting in an equity multiplier of 2.85x and a debt-to-equity ratio of 1.96x, consistent with a trading company balance sheet. Liquidity is strong: current assets ¥903.7b vs. current liabilities ¥461.7b yields a current ratio of 195.7% and quick ratio of 135.3%, providing headroom for working capital swings. Working capital is ¥442.0b, anchored by inventories of ¥279.2b; inventory levels are material and a key driver of both liquidity and earnings volatility. Interest coverage of roughly 6.2x (operating income/interest) indicates manageable solvency risk at current earnings. The reported equity ratio value of 0.0% is an unreported placeholder; based on provided figures, the equity ratio would be approximately 35% (equity/assets), indicating a solid capital base. Overall, the company exhibits a balanced solvency profile with adequate liquidity buffers, though reliance on short- and long-term funding is typical for the business model and exposes it to rate and credit conditions.

Cash Flow

Operating cash flow of -¥4.4b contrasts with net income of ¥16.7b, yielding an OCF/NI ratio of -0.26, indicative of working capital absorption during the period. Given inventories of ¥279.2b and revenue growth, the negative OCF likely stems from increases in inventories and/or receivables rather than weak underlying profitability. EBITDA of ¥32.4b supports earnings quality from operations, but conversion to cash was temporarily weak. Investing cash flow is shown as zero in this dataset and should be treated as undisclosed; consequently, free cash flow cannot be reliably computed despite the calculated metric showing zero. Financing cash inflow of ¥8.8b suggests incremental funding, likely to support working capital; precise components are not disclosed here. Overall, cash flow quality is acceptable for a trading company experiencing working capital swings, but sustained negative OCF would be a concern if it persists beyond seasonal effects. Monitoring working capital turns (inventory days, receivable days, payable days) is essential, though detailed components are not provided in this dataset.

Dividend Sustainability

Dividend per share and payout ratio are shown as zero, which indicates non-disclosure in this dataset rather than actual zero distributions. Without disclosed DPS or full cash flow details (investing CF and cash balances are unreported), a robust dividend coverage analysis cannot be completed from the provided data alone. Based on earnings capacity (net income ¥16.7b, EPS ¥417.90) and adequate liquidity (current ratio ~196%), the company appears to have the earnings base to contemplate distributions typical of trading houses; however, cash conversion this period was negative due to working capital. Free cash flow coverage of dividends cannot be assessed because FCF is not determinable from the unreported investing cash flow. Policy outlook is therefore indeterminate from this dataset; reference to company guidance and prior payout practices would be required for a fuller view.

Business Outlook

通期見通しは据え置き、経常利益550億円・当期純利益400億円を維持。下期は上期238億円に対し312億円を見込み、季節性と運転資本の回収正常化を前提とする。鉄鋼は国内建設分野の底堅さを背景に進捗率58%と上振れ中、プライマリーメタルは持分法投資損益の回復次第で通期達成が不透明、リサイクルメタルは7%進捗で下期の採算改善が必須、食品は62%進捗で上振れ確度が高い。エネルギー・生活資材は33%進捗で下期に事業環境の安定を期待、海外販売子会社は45%進捗で概ね予想通り。在庫水準は2,792億円（XBRL）と高止まりだが、在庫評価損益は+1億円で軽微、下期に在庫回転改善と市況次第でグロスマージン拡大余地あり。金利上昇局面でも利払い負担はインタレストカバレッジ6.2倍で吸収可能、為替は円安基調継続を想定。

Management Guidance

通期業績は据え置きで、上期の進捗43%は一過性要因と季節性を反映したものと説明。経営陣は下期に営業キャッシュフローの正常化（運転資本回収）を重視し、在庫・売掛債権の効率化を進める方針。株主還元は、配当250円（年間予想、中間125円）に加え自己株式取得を機動的に実施し、資本効率（ROE4.23%）の改善を図る。政策保有株式の縮減ペースは緩やかだが、継続的に資産の入替を進め、資本効率改善と資産圧縮を両立させる意図。中計2025の投資は72.4%執行済で、残り枠約220億円を下期～次期に振り向ける柔軟性を確保。SAMANCOR社のマイナス持分法損益は市況低迷が主因で、下期の資源市況回復に期待を示唆。為替・金利・市況のボラティリティには引き続き注視し、デリバティブ活用でヘッジ管理を継続。Q&A記載はないが、資料全体から「通期達成に向けた下期の確度を高めるべく、オペレーション効率化と市況対応を並行推進」するトーンが伺える。

Strategic Initiatives

• 「そこか（即納・小口・加工）」戦略の継続強化：国内鉄鋼・リサイクルメタルで顧客密着型のサービス高度化
• 海外展開投資の拡大：インドネシア大和工業グループ共同出資、シンガポールGREEN ESTEEL出資等で海外鉄鋼・資源の地産地消ビジネス構築
• 高付加価値加工ビジネス：国内外コイルセンター増強（兼松トレーディング買収、海外コイルセンター工場新設）で加工機能の強化
• 環境配慮資源ビジネス：ウッドペレット・PKS（パーム椰子殻）の販売強化でバイオマス燃料市場での存在感拡大
• 二次電池関連ビジネス：マレーシアPMB TECHNOLOGY出資等でEV・蓄電池素材の供給網確保
• 食品事業の多角化：マルゴ福山水産のグループ化で水産加工の垂直統合を推進、米国外食向けも好調維持
• DXと新基幹システム構築：全社投資枠75億円中14億円を上期に投下し、デジタルトランスフォーメーション基盤の整備
• 戦略的投資からの利益貢献拡大：第8次～第10次中計累計で投資額261億円から利益貢献67億円（ROI 5.4%）、地産地消投資294億円から56億円（ROI 4.3%）で、下期以降の利益貢献加速を目指す

Risk Assessment

Business Risks:

• Commodity price volatility affecting spreads and inventory valuation gains/losses
• Demand cyclicality in steel/metals end-markets domestically and globally
• Counterparty credit risk given large receivables typical of trading operations
• Supply chain disruptions impacting volumes and delivery timing
• FX volatility affecting import/export margins where exposures are unhedged

Financial Risks:

• Working capital swings leading to negative operating cash flow in certain periods
• Interest rate risk given ¥4.5b interest expense and reliance on funding
• Inventory concentration risk (¥279.2b) elevating cash flow and valuation sensitivity
• Refinancing and liquidity risk if credit conditions tighten
• Potential non-operating losses reducing ordinary income below operating income

Key Concerns:

• Operating income down 4.0% YoY despite revenue growth, indicating margin pressure
• Net income down 17.2% YoY due to non-operating drag and taxes
• Negative OCF (¥4.4b) versus positive earnings, reflecting working capital absorption
• Limited visibility on investing cash flow and cash balances (unreported)
• Dividend information not disclosed, limiting assessment of shareholder returns

Risk Factors from Presentation:

• SAMANCOR社持分法投資損益のマイナス化：プライマリーメタル減益の主因、マンガン等資源市況の低迷継続リスク
• アルミ・銅の事業環境急変：リサイクルメタルで採算大幅悪化、価格上昇局面での一過性デリバティブ評価損も発生
• 鉄鋼市況の軟調：ASEAN鉄鋼市況の低迷が海外販売子会社の採算を圧迫、鉄鋼製品全般で利鞘縮小リスク
• 欧州材市況の低調：住宅資材（木材）事業で採算悪化、市況回復の遅れが通期減益要因
• 石油製品・化学品の事業環境急変：エネルギー・生活資材で想定より利幅が取りづらい環境継続、原油・化学品価格変動リスク
• 為替変動：円安による調達コスト増と輸出採算の両面影響、為替評価損益の変動性
• 金利上昇：利払い負担増の懸念（現時点ではインタレストカバレッジ6.2倍で許容範囲だが、さらなる金利上昇リスク）
• 運転資本積み上がり：営業CFマイナスの長期化リスク、在庫回転悪化と売掛債権増加への対応

Investment Implications

Key Takeaways:

• Topline resilient (+1.6% YoY) but profitability softer with operating income -4.0% YoY
• ROE at 4.23% reflects thin margins (1.31%) and moderate leverage (2.85x)
• Liquidity strong (current ratio ~196%, quick ratio ~135%) supporting operations
• Ordinary income below operating income due to higher non-operating costs, including interest
• Cash conversion weak this period (OCF/NI -0.26) likely from inventory/receivable build

Metrics to Watch:

• Spread trends and gross margin sustainability around 5.0–5.5%
• Working capital efficiency (inventory days, receivable days, payable days)
• Interest expense trajectory and interest coverage (currently ~6.2x)
• Asset turnover (1.133x) as a driver of ROE in a low-margin model
• Ordinary income versus operating income gap (non-operating items and funding costs)

Relative Positioning: Within Japan’s metals and materials trading space, Hanwa exhibits sector-typical thin margins, sizeable working capital, and moderate leverage. Liquidity appears stronger than many smaller peers, while profitability metrics are broadly in line, with ROE constrained by low net margins and non-operating cost drag.

Supplementary Insights (Key Highlights)

• 実力経常利益248億円（会計上238億円にデリバティブ評価損益+9億円等の調整を加味）で、XBRL分析のOCFマイナスは一過性運転資本増と理解可能
• 自己株式取得を50億円追加決定（5月決定分50億円は10月完了済）し、株主還元総額は前年度並みの225億円（予想）を維持
• 株式分割1対5（効力発生日2026年4月1日）を決定し、投資単位引き下げによる流動性向上と投資家層拡大を企図
• 中計2025の投資枠800億円中578億円（72.4%）を執行済で、主に鉄鋼・食品・海外販売子会社の能力増強・M&Aに投下
• 政策保有株式は25年9月末で連結純資産比率15.9%（25年3月末15.6%から微増）、25年度上期の売却実績は3.5億円で縮減ペースは緩やか
• 鉄鋼セグメントは取扱重量421万トン（前年422万トンから微減）ながら、建設向け粗利改善で増益
• 食品セグメントは米国子会社の外食産業向け好調と新規連結子会社（マルゴ福山水産）の寄与で前年比+128%と急伸
• エネルギー・生活資材は前年2Qのデリバティブ評価益特殊要因の反動で減益だが、ウッドペレット・PKSの取扱は堅調

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
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