Inabata & Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥412.89B
• Operating Income: ¥14.05B
• Net Income: ¥12.32B
• EPS: ¥222.15

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

Inabata & Co., Ltd. (8098) delivered resilient FY2026 Q2 consolidated results under JGAAP, with operating income growth outpacing a slight revenue contraction. Revenue declined 2.1% YoY to ¥412.9bn, yet operating income rose 1.3% YoY to ¥14.0bn, indicating cost discipline and/or favorable mix. Gross profit was ¥40.0bn, yielding a gross margin of 9.7%, while the operating margin improved to approximately 3.4%. Ordinary income of ¥14.8bn exceeded operating income by about ¥0.76bn, suggesting net positive non-operating items offset interest costs of ¥0.74bn. Net income reached ¥12.0bn (+3.2% YoY), and EPS was ¥222.15, implying modest, quality-led earnings growth despite softer top line. DuPont decomposition indicates ROE of 5.25% driven by a 2.89% net margin, 0.892x asset turnover, and 2.03x financial leverage. Liquidity remains robust, with a current ratio of 213.7% and a quick ratio of 166.3%, supported by ¥191.5bn in working capital. The balance sheet shows total assets of ¥463.1bn and total equity of ¥227.7bn, implying an equity ratio of roughly 49.2% (the reported metric field shows 0.0% due to non-disclosure formatting, not an actual zero). Solvency appears sound with total liabilities/equity at 0.99x and interest coverage at 19.0x (operating income basis). Cash generation is healthy: operating cash flow was ¥12.6bn, slightly exceeding net income (OCF/NI = 1.05), indicative of reasonable earnings quality. Free cash flow cannot be determined as investing cash flow was not disclosed in the XBRL fields (shown as 0). Dividend and share count fields were likewise undisclosed in this dataset, so payout and per-share capital metrics cannot be assessed from the provided figures. Overall, the quarter reflects stable profitability, improved operating leverage, and conservative financial posture, albeit with limited visibility on capital allocation and FCF due to disclosure gaps. Near-term outlook hinges on demand normalization in chemicals/plastics and IT-related supply chains, FX dynamics, and inventory management. The company’s ordinary income premium to operating income and strong coverage suggest manageable financial risk, while the ROE profile leaves room for improvement via margin enhancement and asset efficiency. We acknowledge data limitations where figures appear as zero due to non-disclosure, and our analysis relies on available non-zero items and standard inferences.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 2.89%
• asset_turnover: 0.892
• financial_leverage: 2.03
• calculated_ROE: 5.25%
• commentary: ROE is primarily constrained by a thin trading margin structure; leverage is moderate at ~2.0x assets/equity, and asset turnover below 1.0x suggests scope to improve efficiency. margin_quality: Gross margin of 9.7% and operating margin of ~3.4% reflect disciplined cost control amid softer revenues. Ordinary income exceeded operating by ~¥0.76bn, implying positive non-operating balance (likely FX/dividends/associates) more than offsetting ¥0.74bn interest. Implied tax burden appears normalizing (see below), supporting net margin stability. operating_leverage: Revenue -2.1% YoY versus operating income +1.3% YoY indicates positive operating leverage, likely via mix optimization and overhead control. EBITDA of ¥16.1bn (3.9% margin) and depreciation of ¥2.0bn suggest limited fixed-cost drag, aiding resilience.

Growth Assessment

revenue_sustainability: Top line contracted modestly (-2.1% YoY) despite a broad trading footprint, consistent with cautious demand in chemicals/plastics and electronics value chains. Sustainability depends on end-market recovery, inventory normalization, and FX. profit_quality: Net income growth (+3.2% YoY) outpaced sales due to margin management and positive non-operating items. OCF tracked earnings (OCF/NI 1.05), supporting the quality of profits. outlook: With operating leverage trending positive and balance sheet strength intact, incremental recovery in industrial demand or FX tailwinds could support earnings. Conversely, weak downstream consumption or price declines in commoditized product lines could cap revenue growth.

Financial Health

liquidity: Current assets ¥360.0bn vs current liabilities ¥168.5bn; current ratio 213.7%, quick ratio 166.3%. Inventories of ¥79.8bn (~22% of current assets) appear manageable. solvency: Total liabilities/equity at 0.99x and interest coverage at 19.0x indicate conservative leverage and ample service capacity. Ordinary income coverage would be higher given positive non-operating items. capital_structure: Total assets ¥463.1bn and equity ¥227.7bn imply an equity ratio of ~49.2% (calculated), despite the reported equity ratio field showing 0.0% due to non-disclosure. Financial flexibility appears solid for a specialty trading company.

Cash Flow Quality

earnings_quality: OCF of ¥12.6bn vs NI of ¥12.0bn (OCF/NI 1.05) indicates earnings are backed by cash. Depreciation of ¥2.0bn supports cash conversion, with limited capital intensity implied. FCF_analysis: Free cash flow cannot be computed because investing cash flow was not disclosed (displayed as 0 in the dataset). As such, FCF coverage metrics are indeterminable from the provided figures. working_capital: Working capital stands at ¥191.5bn. Inventory at ¥79.8bn and strong quick ratio suggest effective receivables/ payables management; however, detailed WC drivers (DSO/DIO/DPO) are not disclosed.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio fields were undisclosed (shown as 0). Therefore, payout sustainability cannot be quantitatively assessed from this dataset. FCF_coverage: FCF coverage of dividends cannot be evaluated because investing cash flow is undisclosed, preventing FCF calculation. policy_outlook: Absent disclosed dividend data, assessment hinges on underlying capacity: stable earnings, strong liquidity, and moderate leverage would generally support ongoing shareholder returns, subject to management policy and investment needs.

Risk Assessment

Business Risks:

• End-market cyclicality in chemicals/plastics and electronics supply chains
• Commodity price volatility impacting trading margins
• FX fluctuations (JPY volatility) affecting translation and transaction profits
• Customer concentration or project-based demand variability
• Supply chain disruptions and logistics cost swings

Financial Risks:

• Exposure to interest rate increases given interest expense of ¥0.74bn
• Working capital swings typical of trading businesses impacting OCF
• Potential non-operating income variability (FX, investments) affecting ordinary income
• Credit risk on receivables in a high-volume trading model

Key Concerns:

• Sustaining margins amid soft revenue and competitive pricing
• Visibility on capex and investment cash flows given undisclosed investing CF
• Dependence on non-operating gains to bridge operating and ordinary income

Investment Implications

Key Takeaways:

• Profit resilience: operating income +1.3% YoY despite revenue -2.1% YoY
• Healthy margins for a trading model: GP 9.7%, OPM ~3.4%, EBITDA margin 3.9%
• Solid balance sheet: equity ratio ~49% (calculated), liabilities/equity 0.99x
• Strong liquidity: current ratio 214%, quick ratio 166%
• Good earnings-to-cash alignment: OCF/NI 1.05
• Interest coverage robust at 19.0x (operating basis)
• ROE at 5.25% leaves room for improvement via efficiency and margin initiatives
• Ordinary income exceeds operating income, highlighting non-operating contribution

Metrics to Watch:

• Revenue trajectory and gross margin mix by segment (chemicals/plastics vs IT-related)
• Operating margin sustainability amid pricing and input cost changes
• Working capital intensity (inventory and receivables turns)
• Non-operating income components and FX sensitivity
• Capex and investing cash flows to clarify FCF profile
• Tax rate normalization (implied effective tax ~20–26% vs reported metric field 0.0%)

Relative Positioning: Within Japan’s specialty trading cohort, Inabata exhibits conservative leverage, strong liquidity, and stable cash conversion; profitability is steady but ROE is mid-pack, with upside dependent on asset efficiency and margin mix improvements.

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