AMG HOLDINGS CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥13.99B
• Operating Income: ¥823M
• Net Income: ¥420M
• EPS: ¥163.55

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

AMG Holdings Co., Ltd. (Consolidated, JGAAP) reported FY2026 Q2 results showing resilient profitability despite a modest top-line contraction. Revenue declined 2.8% YoY to ¥13,986 million, but operating income rose 23.8% YoY to ¥823 million, indicating effective cost control and margin discipline. Gross profit was ¥2,085 million, translating to a gross margin of 14.9%, while operating margin improved to approximately 5.9%. Ordinary income reached ¥765 million and net income was ¥458 million, with net margin at 3.27% and EPS of ¥163.55. DuPont analysis yields ROE of 4.03%, driven by a 3.27% net margin, 0.481x asset turnover, and 2.56x financial leverage. Liquidity appears solid with a current ratio of 179.6% and working capital of ¥11,625 million, while solvency is moderate with liabilities-to-equity at 1.61x and an implied equity ratio of about 39.1% (equity of ¥11,372 million over assets of ¥29,061 million). Operating cash flow was strong at ¥1,176 million, exceeding net income by 2.57x, suggesting good earnings quality and favorable working capital dynamics in the period. Interest coverage of 10.4x indicates comfortable debt service capacity. The company booked income tax expense of ¥195 million; the displayed “effective tax rate 0.0%” is clearly a placeholder, not an actual rate. Dividend data show DPS at ¥0 and payout ratio at 0%, implying no interim payout; however, free cash flow cannot be assessed because investing cash flow is undisclosed (reported as 0 in the data feed). Several items are not disclosed in XBRL under the provided labels (e.g., inventories, cash and equivalents, equity ratio, investing cash flows, shares outstanding), and their zeros should not be interpreted as actual zero balances. Notwithstanding these disclosure gaps, the period’s profile reflects margin expansion, healthy operating cash generation, and de-leveraging/financing outflows. Revenue softness warrants monitoring to assess sustainability, but cost efficiency and operating leverage have supported earnings growth. Overall, profitability improved, balance sheet appears reasonably capitalized, and cash conversion was strong, though limited visibility on investing flows constrains a full free cash flow and capital allocation assessment.

Profitability Analysis

ROE_decomposition_DuPont:

• net_profit_margin: 3.27% (Net income ¥458m / Revenue ¥13,986m)
• asset_turnover: 0.481x (Revenue ¥13,986m / Total assets ¥29,061m)
• financial_leverage: 2.56x (Total assets ¥29,061m / Equity ¥11,372m)
• calculated_ROE: 4.03% (matches reported 4.03%) margin_quality:
• gross_margin: 14.9% (¥2,085m / ¥13,986m)
• operating_margin: 5.9% (¥823m / ¥13,986m); up YoY given +23.8% OI on -2.8% sales
• ordinary_margin: 5.47% (¥765m / ¥13,986m)
• net_margin: 3.27% (¥458m / ¥13,986m)
• EBITDA_margin: 6.2% (EBITDA ¥871m / ¥13,986m)
• commentary: Margin expansion is evident at the operating level, indicating disciplined SG&A and cost control. Net margin growth lagged operating income growth, likely due to interest and taxes. operating_leverage_and_costs:
• evidence_of_operating_leverage: Yes; operating income +23.8% YoY vs revenue -2.8% YoY.
• cost_items: Interest expense ¥79m; D&A ¥48m (asset-light profile).
• interest_coverage: 10.4x (Operating income ¥823m / Interest expense ¥79m).

Growth Assessment

revenue_sustainability: Revenue declined 2.8% YoY to ¥13,986m, suggesting potential project timing or end-demand softness. Sustainability will depend on pipeline visibility and order intake; current data does not disclose segment mix. profit_quality_and_drivers: Operating income growth (+23.8% YoY) amid lower sales indicates improved mix and/or SG&A efficiency. EBITDA of ¥871m and OCF of ¥1,177m support profit quality. outlook_context: With asset turnover at 0.481x and leverage at 2.56x, further ROE improvement hinges on stabilizing sales and sustaining margin gains. Watch for normalization of costs and any reinvestment needs (capex/working capital) not visible due to undisclosed investing CF.

Financial Health

liquidity:

• current_ratio: 179.6% (Current assets ¥26,233m / Current liabilities ¥14,608m)
• quick_ratio: 179.6% (inventories undisclosed; quick ratio equals current ratio in feed, likely overstated)
• working_capital: ¥11,625m solvency_and_capital_structure:
• total_liabilities: ¥18,343m
• total_equity: ¥11,372m
• debt_to_equity: 1.61x (liabilities/equity)
• implied_equity_ratio: ≈39.1% (equity/assets), noting the reported 0.0% in the feed is an undisclosed placeholder
• leverage_comment: Moderate leverage with solid equity buffer; financing CF outflow suggests net debt reduction or other financing uses.

Cash Flow Quality

earnings_quality: Strong; OCF ¥1,176m exceeds net income ¥458m (OCF/NI 2.57x), indicating positive working capital contribution and cash conversion. FCF_analysis: Free cash flow cannot be reliably computed because investing cash flow is undisclosed (shown as 0 by the feed). EBITDA is ¥871m and D&A is ¥48m, implying low maintenance capex needs, but actual capex/acquisitions are not provided. working_capital_dynamics: Given revenue decline and strong OCF, cash generation likely benefited from reduced receivables or inventory normalization; exact components are not disclosed.

Dividend Sustainability

payout_ratio_assessment: Payout ratio reported at 0.0% with DPS ¥0 suggests no interim dividend. Without full-year guidance and with missing share count data, payout capacity cannot be precisely benchmarked. FCF_coverage: Not assessable this quarter due to undisclosed investing cash flows (FCF shown as 0 by the feed is not actual). policy_outlook: With net income positive, OCF strong, and moderate leverage, capacity for distributions exists, but the company may prioritize balance sheet flexibility or reinvestment. Confirm FY policy and year-end dividend communications.

Risk Assessment

Business Risks:

• Revenue contraction (-2.8% YoY) suggests demand or project timing risk.
• Potential concentration risk if sales depend on a limited number of projects or customers (not disclosed).
• Margin sensitivity to cost inflation and pricing power.
• Execution risk in maintaining SG&A discipline to sustain improved operating margin.

Financial Risks:

• Exposure to interest costs (¥79m) though coverage is currently strong (10.4x).
• Refinancing or liquidity timing risk if current liabilities are significant (¥14,608m) relative to operating cash cycles.
• Limited visibility on investing cash flows and cash balance due to undisclosed items.
• Potential working capital volatility affecting cash conversion.

Key Concerns:

• Undisclosed cash and equivalents impair assessment of immediate liquidity.
• Investing cash flow not reported, limiting free cash flow analysis.
• Equity ratio reported as 0.0% in the feed despite implied ~39%, highlighting disclosure mapping issues.
• Sales decline; need evidence of pipeline recovery to support ROE expansion.

Investment Implications

Key Takeaways:

• Operating leverage and cost control drove a 23.8% YoY increase in operating income despite a 2.8% revenue decline.
• ROE at 4.03% is modest; upside depends on stabilizing sales and sustaining margin improvements.
• Strong operating cash conversion (OCF/NI 2.57x) underscores earnings quality.
• Balance sheet appears sound with an implied equity ratio ~39% and liabilities/equity at 1.61x.
• Data gaps (cash, inventories, investing CF, share data) limit full valuation and capital allocation analysis.

Metrics to Watch:

• Revenue growth trajectory and order backlog/pipeline disclosures.
• Gross and operating margin progression and SG&A ratio.
• Operating cash flow versus net income, and detailed working capital movements.
• Investing cash flows (capex, acquisitions) to assess true free cash flow.
• Net debt and cash balance disclosure; refinancing schedule and interest rate exposure.
• Dividend policy guidance and year-end DPS, if any.

Relative Positioning: Within peers characterized by moderate leverage and project-driven revenues, AMG’s quarter shows better-than-peer margin discipline and cash conversion but slightly weaker top-line momentum; full relative benchmarking is constrained by limited disclosure granularity.

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