ACOM CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥54.06B
• Net Income: ¥32.21B
• EPS: ¥32.54

Income Statement

Balance Sheet

Cash Flow Statement

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

Acom Co., Ltd. delivered a strong FY2026 Q2 result at the earnings level, with operating income of ¥54.063bn, up 12.6% YoY, and net income of ¥50.978bn, up 70.7% YoY, indicating robust profitability momentum. Although revenue and gross profit are undisclosed in the XBRL feed, the company’s operating and ordinary income lines suggest solid core earning power in its consumer finance franchise. EPS printed at ¥32.54 for the period, supported by low D&A (¥1.869bn) and minimal reported interest expense (¥3m), which together pushed EBITDA to ¥55.932bn. The sharp net income expansion likely reflects a favorable credit cost environment and disciplined operating expenses, along with potentially benign one-off effects; however, the absence of detailed revenue and cost items limits granularity. Liquidity appears strong with current assets of ¥1.409tn against current liabilities of ¥299.2bn, yielding a current ratio of 4.71x and working capital of ¥1.110tn, although such metrics are less diagnostic for financial institutions. The balance sheet shows total assets of ¥1.524tn and equity of ¥741.2bn, implying moderate financial leverage of roughly 2.06x assets/equity. Debt-to-equity stands at 1.05x, consistent with a conservative funding posture relative to the asset base. Ordinary income of ¥54.245bn and reported income tax of ¥15.914bn imply an effective tax rate in the mid‑20% range, which looks normal for the sector. Operating cash flow was negative at ¥‑12.624bn despite strong profitability, which is typical in periods of loan book expansion as receivables growth consumes cash. Financing cash inflow of ¥2.608bn partially offset the OCF outflow; investing cash flow is undisclosed. Dividend per share is currently shown as zero, with a zero payout ratio; this likely reflects timing or non‑disclosure rather than a definitive full‑year policy. Interest coverage is extremely high at 18,021x on reported figures, though this is influenced by classification differences common in financials. Overall, the quarter underscores resilient earnings, prudent leverage, and ample liquidity, but the negative OCF signals growth-driven working capital use and highlights the need to monitor credit costs and funding conditions. Data limitations (notably undisclosed revenue and cash balances) constrain full margin analysis and free cash flow evaluation. On balance, the earnings trajectory is favorable, but sustainability hinges on asset quality trends, funding costs, and regulatory backdrop. We focus on the durability of net income growth versus normalization of credit costs from cyclically low levels. We also note that equity strength provides a buffer to absorb potential credit cost reversion without stressing solvency metrics.

Profitability Analysis

ROE decomposition is partial given undisclosed revenue. Using available data: ROA ≈ 3.35% (¥50.978bn / ¥1.524tn), financial leverage ≈ 2.06x (assets/equity), implying ROE ≈ 6.9% (ROA × leverage). Net profit margin and asset turnover cannot be reliably calculated due to revenue non‑disclosure. Operating income grew 12.6% YoY to ¥54.063bn, with minimal D&A (¥1.869bn), indicating high operating margin quality and limited non‑cash expense drag. EBITDA of ¥55.932bn suggests strong underlying operating cash generation capacity, notwithstanding working capital effects. The step‑up in net income (+70.7% YoY) versus operating income growth implies additional tailwinds below operating level (e.g., lower credit costs, lower tax or non‑operating positives). Effective tax rate, approximated as tax/(pre‑tax), is ~24% assuming pre‑tax ≈ net income + tax (¥15.914bn / ¥66.892bn). Interest expense is de minimis on disclosure (¥3m), producing an inflated coverage ratio (18,021x); in consumer finance, interest and funding costs are often embedded differently, so this metric should be interpreted cautiously. Margin quality appears strong, supported by operating discipline and benign credit costs; however, sustainability should be assessed against potential normalization in loss rates. Operating leverage looks favorable given high incremental profit flow‑through with limited D&A and controlled opex.

Growth Assessment

Top‑line details are not disclosed, but operating income growth of 12.6% YoY indicates healthy expansion in core activities, likely reflecting loan growth and stable yields. The large YoY increase in net income (+70.7%) suggests favorable credit cost trends and/or one‑off positives; durability into the next half is a key watch point. EBITDA growth (implied by operating income) points to sustained operating momentum with low fixed‑cost drag. Negative OCF likely stems from receivable growth, consistent with business expansion rather than deterioration. Without revenue granularity, we infer growth is being driven by volume and stable pricing rather than fee spikes. Outlook hinges on maintaining asset quality as the book grows, managing funding costs amid interest rate shifts, and maintaining regulatory compliance. If credit costs normalize upward from low levels, profit growth is likely to moderate, but equity capacity provides resilience. International or new product contributions are not disclosed; thus, the growth narrative is primarily domestic, core lending led. Management signaling on full‑year guidance and credit policy will be critical to gauge sustainability.

Financial Health

Total assets are ¥1.524tn, liabilities ¥777.4bn, and equity ¥741.2bn, yielding assets/equity leverage of ~2.06x and debt‑to‑equity of 1.05x, consistent with moderate gearing for a consumer finance company. Liquidity appears ample with current assets of ¥1.409tn versus current liabilities of ¥299.2bn (current ratio 4.71x), although current ratios are less indicative in financials due to the nature of receivables and borrowings. Working capital stands at ~¥1.110tn, reflecting a large receivable base. Equity provides a substantial buffer to absorb credit losses. The reported equity ratio in the dataset is 0.0% due to non‑disclosure; based on available totals, the implied equity ratio is approximately 48.6% (equity/assets). Interest coverage looks extremely high based on reported interest expense, but true funding costs may be captured elsewhere; still, solvency headroom appears strong. No detail on off‑balance sheet exposures or securitization activities is provided; thus, contingent liquidity assessment is limited.

Cash Flow Quality

Despite robust earnings (net income ¥50.978bn), operating cash flow was ¥‑12.624bn, resulting in an OCF/NI ratio of ‑0.25, which is typical for lenders during periods of loan growth as receivables consume cash. Investing cash flow is undisclosed, and thus free cash flow cannot be reliably computed from the dataset; reported FCF of 0 reflects non‑disclosure rather than actual zero. The low D&A (¥1.869bn) indicates earnings are largely cash‑earnings before working capital movements. Negative OCF in this context does not necessarily indicate poor earnings quality; rather, it signals portfolio expansion. Working capital dynamics (principally loans receivable) are the key swing factor; detailed breakdowns of loan originations, collections, and credit cost provisioning are not provided, limiting deeper reconciliation. Financing inflows of ¥2.608bn partially offset operating outflows, suggesting measured funding activity aligned with growth.

Dividend Sustainability

Annual DPS is shown as ¥0.00 and payout ratio 0.0%, likely reflecting timing or lack of disclosure rather than a definitive full‑year stance. With EPS at ¥32.54 for the half, capacity to pay dividends exists from an earnings perspective, but coverage should be assessed against economic free cash flow, which cannot be calculated here due to undisclosed investing cash flows and capex. Negative OCF this period reflects growth in the loan book; in such phases, management may prioritize reinvestment and balance sheet strength over distributions. Equity at ¥741.2bn provides flexibility for capital returns subject to regulatory and rating considerations. Policy outlook depends on full‑year profitability, funding market conditions, and credit cost trends; no explicit guidance is provided in the dataset. For assessment, monitor full‑year DPS announcements, payout ratios versus normalized earnings, and FCF after growth funding needs.

Risk Assessment

Business Risks:

• Credit cost normalization from currently benign levels, which could compress net income growth.
• Regulatory changes in consumer lending caps, collections practices, or disclosure requirements.
• Competitive pressure on loan yields from banks and fintechs, impacting margins.
• Macroeconomic slowdown affecting borrower repayment behavior and loan demand.
• Concentration in domestic consumer finance with limited diversification disclosed.

Financial Risks:

• Funding cost increases amid interest rate volatility, pressuring net interest margin.
• Liquidity risk if market funding tightens; reliance on stable funding mix is undisclosed.
• Negative operating cash flow during growth phases increasing dependence on external funding.
• Potential mismatch of asset/liability durations affecting interest sensitivity.
• Model risk in credit underwriting if borrower risk profiles shift.

Key Concerns:

• Sustainability of the 70.7% YoY net income growth amid likely credit cost normalization.
• Visibility on true funding costs is limited given minimal reported interest expense.
• Revenue and cash details are undisclosed, constraining margin and FCF analysis.

Investment Implications

Key Takeaways:

• Strong profitability: operating income ¥54.1bn (+12.6% YoY) and net income ¥51.0bn (+70.7% YoY).
• Solid balance sheet with moderate leverage (assets/equity ~2.06x; D/E 1.05x) and ample liquidity.
• Negative OCF (¥‑12.6bn) reflects growth-driven receivables build rather than weak earnings quality.
• Interest coverage appears extremely high on disclosed figures; interpret cautiously due to classification in financials.
• Dividend currently undisclosed (DPS shown at ¥0); capacity exists but policy depends on full‑year cash and credit trends.

Metrics to Watch:

• Credit costs and NPL ratios (not disclosed here) and their trajectory versus loan growth.
• Net interest margin / yield on loans and funding cost trends.
• Loan book growth rate and OCF/NI ratio normalization as growth moderates.
• Capital adequacy and equity ratio based on total assets/equity.
• Guidance on dividend policy and payout versus normalized earnings.
• Ordinary income and tax rate stability into H2.

Relative Positioning: Within Japanese consumer finance peers, Acom demonstrates robust mid‑single‑digit implied ROE (~6.9%) with conservative leverage and strong liquidity; earnings momentum is favorable, but like peers, sensitivity to credit cost normalization and funding conditions remains the key swing factor.

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