Yamatane Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥43.18B
• Operating Income: ¥3.74B
• Net Income: ¥1.16B
• EPS: ¥117.13

Income Statement

Balance Sheet

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

Yamatane (TSE:9305) delivered strong top- and bottom-line performance in FY2026 Q2 under JGAAP, with revenue of ¥43.176bn (+12.8% YoY) and operating income of ¥3.736bn (+150.9% YoY). Ordinary income was ¥3.640bn, only modestly below operating income, indicating limited non-operating drag despite ¥329m in interest expense. Net income rose sharply to ¥2.555bn (+161.9% YoY), translating to EPS of ¥117.13. Implied operating margin expanded to roughly 8.6% (¥3.736bn/¥43.176bn), while net margin stood at 5.92%, confirming meaningful operating leverage. DuPont decomposition shows ROE of 4.22%, driven by a 5.92% net margin, asset turnover of 0.251x, and financial leverage of 2.84x; the modest ROE despite strong earnings growth reflects low asset turnover in a capital-intensive/logistics-heavy model. Balance sheet scale remains sizable with total assets of ¥172.235bn and total equity of ¥60.56bn; this implies an equity ratio of approximately 35.1%, although the reported equity ratio field is undisclosed. Liquidity appears tight: current assets of ¥24.878bn versus current liabilities of ¥37.295bn yields a current ratio of 0.67x and negative working capital of ¥12.417bn, a structure consistent with trading/wholesale dynamics but still a key monitoring point. Inventories were ¥5.032bn, supporting the quick ratio of 0.53x; working capital discipline and supplier/customer terms remain pivotal. Leverage is moderate with total liabilities/equity at 1.79x, while interest coverage is healthy at roughly 11.4x (operating income/interest expense), mitigating near-term solvency concerns. The reported effective tax rate is undisclosed; an implied tax rate of ~22–23% (¥747m tax on an estimated pre-tax of ~¥3.30bn) appears reasonable under JGAAP, but exact comparability to ordinary income is limited by potential extraordinary items. Cash flow statements are not disclosed in the XBRL feed, constraining assessment of earnings-to-cash conversion and free cash flow. Dividend fields are also undisclosed, preventing payout or FCF coverage analysis, though EPS growth would support future distribution capacity if cash generation is robust. Overall, the quarter shows material margin expansion and operating leverage, improving earnings quality from the income statement perspective. However, the combination of negative working capital, moderate leverage, and missing cash flow details underscores the importance of monitoring funding, OCF generation, and capex needs. Given the cyclical exposure to logistics/food-related markets, sustaining current margin levels into 2H and the next fiscal year will be a key determinant of ROE progression.

Profitability Analysis

ROE is 4.22% per DuPont: Net Profit Margin 5.92% × Asset Turnover 0.251 × Financial Leverage 2.84. Operating margin is implied at ~8.6% (¥3.736bn/¥43.176bn), significantly higher YoY, evidencing strong operating leverage as operating income grew +150.9% versus revenue +12.8%. Ordinary income (¥3.640bn) trails operating income modestly, indicating limited non-operating headwinds beyond interest expense of ¥329m; the non-operating balance appears near neutral net of interest. Net margin of 5.92% reflects improved cost discipline and/or favorable mix, though the absence of cost of sales disclosure limits gross margin analysis. Interest burden is manageable: interest expense equals ~8.8% of operating income, with interest coverage ~11.4x. The implied effective tax rate is ~22–23% (tax of ¥747m versus an estimated pre-tax of ~¥3.302bn), subject to JGAAP classification of extraordinary items. Profit quality looks primarily operating-driven rather than non-recurring, given the close alignment of operating and ordinary income. Asset turnover at 0.251x is low, consistent with asset-heavy logistics/real estate/warehousing elements, constraining ROE despite higher margins. Further ROE uplift would require sustained margin gains and/or improved asset utilization.

Growth Assessment

Revenue grew 12.8% YoY to ¥43.176bn, outpacing many domestic logistics/food channels and implying healthy volume/price or mix tailwinds. Operating income surged 150.9% to ¥3.736bn, signaling robust operating leverage from prior cost actions, scale benefits, or favorable commodity/logistics spreads. Net income rose 161.9% to ¥2.555bn, with EPS at ¥117.13, confirming broad-based earnings acceleration. Ordinary income (¥3.640bn) is close to operating income, suggesting the growth is fundamentally operating in nature. Sustainability hinges on end-market demand stability and the persistence of lower unit costs or improved pricing; a reversion in spreads or mix could compress margins. With asset turnover at 0.251x, incremental revenue growth should drop through meaningfully to profits if current fixed-cost absorption remains favorable. Outlook: if revenue momentum persists into 2H and pricing/mix holds, full-year operating profit could maintain a structurally higher run-rate versus prior year; however, lack of cash flow and capex disclosure limits visibility into reinvestment needs and durability of growth.

Financial Health

Total assets ¥172.235bn; total equity ¥60.56bn; total liabilities ¥108.66bn. Implied equity ratio is ~35.1% (equity/assets), although the reported field is undisclosed. Debt-to-equity is 1.79x, indicating moderate leverage. Current assets ¥24.878bn vs current liabilities ¥37.295bn yields a current ratio of 0.67x and quick ratio of 0.53x (inventory ¥5.032bn), reflecting tight liquidity and negative working capital of ¥12.417bn. This structure can be normal for trading/wholesale logistics but increases reliance on short-term funding and working capital management. Interest coverage of ~11.4x indicates ample buffer against interest costs at current earnings levels. No maturities schedule or covenant data is provided; refinancing risk cannot be fully assessed. Overall solvency is acceptable given equity base and coverage, but short-term liquidity requires ongoing monitoring.

Cash Flow Quality

Operating, investing, and financing cash flows are not disclosed in the dataset, so OCF/NI and FCF assessments cannot be made. The reported OCF/Net Income ratio of 0.00 and FCF of 0 reflect non-disclosure, not economic zero. Earnings quality appears supported by operating income tracking closely with ordinary income, implying limited reliance on non-operating items; however, without OCF and working capital delta details, conversion risk remains. Depreciation/amortization is not disclosed, limiting EBITDA analysis and cash earnings approximations. Working capital indicators show negative working capital (−¥12.417bn), which can be cash-generative when growing but may reverse if sales slow or payables tighten. Key unknowns: collection cycles, inventory turns, capex level for logistics/warehousing assets, and lease cash outflows.

Dividend Sustainability

Dividend per share and payout ratio are not disclosed in the provided data, so we cannot determine current distributions or coverage. With EPS at ¥117.13 and strong profit growth, capacity for dividends appears improved from an earnings standpoint, but cash coverage is unassessable without OCF and capex data. Historically, sustainability depends on stable OCF, manageable capex, and access to short-term funding given negative working capital. Policy outlook cannot be inferred from the dataset; confirmation via company guidance or prior-year dividend trends is required.

Risk Assessment

Business Risks:

• Commodity price and procurement risk in food/rice-related trading affecting margins
• Logistics demand and warehouse utilization volatility impacting fixed-cost absorption
• Customer concentration and counterparty credit risk in B2B channels
• Potential normalization of spreads and mix, reversing recent margin gains
• Operational disruptions (supply chain, labor, transport costs, energy) affecting service levels and costs
• Regulatory/food safety standards and compliance requirements
• FX exposure on imports if applicable

Financial Risks:

• Tight liquidity with current ratio 0.67x and negative working capital of ¥12.417bn
• Refinancing/rollover risk for short-term liabilities amid interest rate changes
• Interest rate risk increasing interest expense from ¥329m baseline
• Asset intensity and low asset turnover (0.251x) constraining ROE
• Limited visibility on cash flows and capex, creating FCF uncertainty

Key Concerns:

• Sustainability of elevated operating margin (~8.6%) into 2H and beyond
• Working capital management and OCF conversion in a growth phase
• Exposure to commodity and logistics cost swings that could compress margins

Investment Implications

Key Takeaways:

• Strong quarter with revenue +12.8% YoY and operating income +150.9% indicates significant operating leverage
• ROE at 4.22% remains modest due to low asset turnover despite improved margins
• Liquidity is tight (current ratio 0.67x; quick ratio 0.53x) with negative working capital, necessitating disciplined funding
• Interest coverage is healthy at ~11.4x, supporting solvency despite moderate leverage (D/E 1.79x)
• Cash flow data is undisclosed, limiting visibility on earnings quality and dividend capacity

Metrics to Watch:

• Operating margin trajectory and spread/mix sustainability
• Working capital (AR/AP days, inventory days) and OCF conversion
• Capex and maintenance spend for logistics/warehousing assets
• Interest expense trend and effective tax rate normalization
• Asset turnover improvements and ROE progression

Relative Positioning: Within Japan’s logistics/food trading cohort, Yamatane exhibits strong near-term earnings momentum and healthy interest coverage but operates with tighter liquidity and lower asset turnover, suggesting execution on working capital and utilization is key to closing the ROE gap with higher-turn peers.

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