JACCS CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥13.28B
• Net Income: ¥10.93B
• EPS: ¥271.26

Income Statement

Balance Sheet

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

For FY2026 Q2 (cumulative) under JGAAP on a consolidated basis, JACCS reported operating income of ¥13.28bn, down 17.4% YoY, and net income attributable to owners of the parent of ¥9.71bn, down 13.2% YoY. EPS was ¥271.26, indicating solid per-share profitability despite a mid-teens earnings decline. Revenue, gross profit, EBITDA, interest expense, and operating cash flow were not disclosed in the provided extract (zeros indicate non-disclosure rather than actual zeros), limiting margin and cash-based ratio analysis. Ordinary income was ¥13.10bn, broadly aligned with operating income for the period, suggesting limited non-operating swings. Income tax expense was ¥5.42bn; with the lack of reported pre-tax income, an effective tax rate cannot be reliably inferred from this dataset. The balance sheet shows total assets of ¥3.84tn and total equity of ¥298.95bn, implying a recalculated equity ratio of about 7.8% (equity/assets), typical for a consumer finance/credit business model with inherently higher leverage. Current assets were ¥3.70tn versus current liabilities of ¥1.95tn, yielding a strong current ratio of roughly 1.90x and working capital of ¥1.75tn, indicating robust near-term liquidity. The debt-to-equity ratio of 11.88x and financial leverage of 12.83x are consistent with the asset-financing nature of the business. Cash flow statement line items (OCF, ICF, FCF) were not disclosed, preventing an assessment of cash conversion and free cash flow coverage. Dividend data (DPS, payout) was also not disclosed in this extract; JACCS historically pays dividends, so the reported zeros should be treated as unavailable data. Despite declining profits, the earnings profile remains positive with double-digit billions in net income in the half year, and EPS remains healthy. The YoY contraction suggests pressure on funding costs, credit costs, or fee margins; however, the dataset lacks detail to attribute drivers precisely. Liquidity appears ample, and capitalization levels are broadly consistent with the sector. Overall, results indicate resilient profitability amid macro and cost headwinds, but the absence of revenue and cash flow disclosure in this extract constrains margin and cash-based analyses.

Profitability Analysis

ROE decomposition is constrained by missing revenue and net sales-based margins. Using available figures: half-year ROE (unannualized) ≈ net income/equity = ¥9.712bn / ¥298.954bn ≈ 3.25%; annualized, this implies roughly ~6.5% if H1 is representative. Financial leverage (assets/equity) is 12.83x, which is consistent with credit/finance models. Net profit margin and asset turnover from the provided DuPont table show 0.00% and 0.000 due to missing revenue; these are not interpretable. Operating income declined 17.4% YoY versus a smaller 13.2% decline in net income, hinting that non-operating items and/or lower minority interests or tax effects partially cushioned the drop. Margin quality cannot be directly assessed without operating revenue and cost detail; for a finance company, effective margins are driven by net interest margin, fee income, and credit cost—none of which are disclosed here. Operating leverage: the larger decline in operating income relative to net income suggests some stabilization below operating line, but we cannot parse fixed vs variable cost structure from this data. Ordinary income (¥13.10bn) tracking operating income suggests minimal contribution from non-operating gains/losses in the period. Overall profitability remains positive but under pressure YoY, with leverage amplifying ROE to a mid-single-digit annualized level.

Growth Assessment

Revenue trends are unavailable in this extract; therefore, topline sustainability cannot be quantified. Profit growth declined: operating income -17.4% YoY and net income -13.2% YoY for the half year, indicating headwinds in spreads, fees, or credit costs. EPS of ¥271.26 is consistent with maintaining meaningful per-share earnings despite the contraction. Without segment data, we cannot distinguish between card/credit, installment finance, or overseas business contributions. The smaller decline in net income relative to operating income suggests some resilience from financial income/expenses, equity-method affiliates, or taxes. Outlook hinges on funding cost trajectory, asset growth, delinquency/charge-off trends, and credit cost normalization; none of these are disclosed here. If H2 seasonality is normal and credit costs stabilize, full-year earnings could annualize to roughly double H1, but this is assumption-based. In the absence of revenue data, we cannot assess mix shifts or fee reliance. Given macro conditions for Japanese consumer credit, modest loan growth and stable employment typically support steady earnings, but rate sensitivity and credit cycle remain key uncertainties.

Financial Health

Liquidity appears strong with current assets of ¥3.70tn versus current liabilities of ¥1.95tn, yielding a current ratio of 1.90x and working capital of ¥1.75tn. The recalculated equity ratio is approximately 7.8% (¥298.95bn/¥3.84tn), more representative than the reported 0.0% in the table, and aligns with sector norms for leveraged finance companies. Debt-to-equity of 11.88x and financial leverage of 12.83x indicate a balance sheet reliant on funding sources, typical for credit businesses. Solvency appears adequate relative to the business model, but we lack risk-weighted asset or capital adequacy metrics. No maturity profile, interest sensitivity, or unsecured vs secured funding mix is available. Cash and equivalents are not disclosed in the extract, so immediate liquidity buffers cannot be assessed. Overall, the company maintains substantial liquidity and sector-typical leverage; capital levels should be monitored against asset growth and credit cost trends.

Cash Flow Quality

Operating, investing, and financing cash flows were not disclosed, preventing cash conversion analysis. The reported OCF/Net Income ratio of 0.00 and FCF of 0 should be treated as unavailable rather than actual zeros. Earnings quality cannot be triangulated via OCF or working capital movements. As a finance company, OCF can be volatile and less meaningful due to loan originations; adjusted cash metrics (e.g., cash earnings, collections vs originations) would be more informative, but are not provided. Depreciation/amortization is not disclosed, so EBITDA and non-cash add-backs cannot be evaluated. Working capital from the balance sheet shows a positive position, but for lenders, loan receivables dominate and changes can invert OCF without indicating weak quality. Until cash flow statements are available, we cannot assess FCF generation or coverage of dividends and debt service.

Dividend Sustainability

Dividend per share and payout ratio are not disclosed in this extract; the zeros should be treated as unreported. Historically, the company has paid dividends, so a payout exists, but we cannot compute coverage. Without OCF and FCF, free cash flow coverage of dividends cannot be evaluated. On earnings coverage alone, H1 net income of ¥9.71bn suggests capacity to fund dividends, subject to capital adequacy and growth investment needs. Policy outlook is unknown from this dataset; many Japanese financials target stable or progressive dividends subject to capital discipline, but confirmation requires management guidance.

Risk Assessment

Business Risks:

• Net interest margin compression due to funding cost increases
• Rising credit costs from delinquencies and charge-offs in consumer credit
• Regulatory changes affecting fee caps, lending limits, or reserve requirements
• Competition from banks, fintechs, and BNPL alternatives compressing spreads
• Macroeconomic slowdown impacting loan demand and repayment capacity
• Concentration risks by product, channel, or geography (not disclosed here)

Financial Risks:

• High leverage inherent to the model (assets/equity 12.83x)
• Funding mix and rollover risk amid interest rate volatility
• Asset-liability duration mismatch and interest rate sensitivity
• Potential capital adequacy pressure if credit costs spike
• Limited cash flow visibility in this period due to non-disclosure

Key Concerns:

• Mid-teens YoY decline in operating income indicates margin or credit cost pressure
• Absence of revenue and cash flow disclosures constrains analysis of earnings quality
• Equity ratio relies on recalculation; capital buffer adequacy requires regulatory metrics

Investment Implications

Key Takeaways:

• Profitability remains positive with H1 net income of ¥9.71bn despite a 13.2% YoY decline
• ROE annualized implied around mid-single digits given leverage of 12.83x
• Liquidity is ample with current ratio ~1.90x and ¥1.75tn working capital
• Capitalization appears sector-typical with an estimated equity ratio ~7.8%
• Lack of revenue and cash flow data prevents margin and cash conversion assessment
• Earnings pressure likely linked to spreads, funding costs, or credit costs

Metrics to Watch:

• Net interest margin and funding cost trajectory
• Credit costs: delinquency, NPLs, charge-offs, and provisioning
• Ordinary income trend and variance vs operating income
• Capital adequacy ratios (e.g., equity ratio targets, regulatory capital)
• Cash flow from operating activities and FCF when disclosed
• Dividend policy updates and payout ratio
• Loan growth and receivables mix by product/region

Relative Positioning: Within Japan’s consumer finance/credit ecosystem, the company exhibits sector-typical leverage and appears to maintain adequate liquidity, but the current period shows earnings contraction. Without revenue, segment, and cash flow disclosure, relative margin strength versus peers cannot be conclusively assessed.

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