ASAHI BROADCASTING GROUP HOLDINGS CORPORATION FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥46.69B
• Operating Income: ¥1.28B
• Net Income: ¥-905M
• EPS: ¥57.54

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

Asahi Broadcasting Group Holdings (9405) reported solid top-line and operating momentum for FY2026 Q2 (cumulative), with revenue of ¥46.7bn growing 12.1% YoY and operating income of ¥1.28bn up 38.9% YoY. Gross profit reached ¥11.9bn, implying a gross margin of 25.5%, while EBITDA was ¥3.04bn (6.5% margin), signaling improved operating efficiency. Ordinary income of ¥1.30bn was close to operating income, indicating limited non-operating drag, aided by very low interest expense of ¥35m and strong interest coverage of 36.6x. Net income rose 63.8% YoY to ¥2.40bn, materially outpacing revenue growth, supported by operating leverage and a favorable tax line (reported income tax of -¥162m). The reported effective tax rate metric shows 0.0%, but the negative tax expense implies a tax credit or reversal that boosted bottom-line results. DuPont analysis indicates a 5.14% net margin, asset turnover of 0.356x, and financial leverage of 1.61x, yielding an ROE of 2.95% for the period. Given the interim nature of these results, the ROE is not annualized, and profitability may vary with seasonality and year-end adjustments. Liquidity appears strong with a current ratio of 241.6% and quick ratio of 232.7%, supported by sizeable working capital of ¥29.0bn. The balance sheet is conservatively positioned: total assets are ¥131.0bn and equity is ¥81.5bn, implying an equity ratio of roughly 62% based on disclosed balances (the reported equity ratio figure was not disclosed). Leverage is moderate with a debt-to-equity ratio of 0.62x (based on total liabilities), and low interest expense reduces financial risk. Cash flow quality is a watch point: operating cash flow of ¥0.74bn equates to 0.31x net income, suggesting profit conversion was weak this half due to working capital builds and/or non-cash and extraordinary factors. Free cash flow was not disclosed; investing cash flow was also not disclosed in the XBRL, limiting full cash coverage analysis this quarter. Dividend information was not disclosed (annual DPS and payout ratio appear as zero placeholders), so dividend sustainability cannot be directly assessed from this release. Overall, fundamentals show improving operating performance and tight cost control, but cash conversion and the reliance on a favorable tax line temper the quality of earnings. The outlook hinges on sustaining advertising and content-related revenues into 2H, maintaining programming cost discipline, and improving operating cash flow conversion as working capital normalizes. Data gaps in cash and dividend disclosure warrant continued monitoring before drawing firm conclusions on capital returns.

Profitability Analysis

ROE_decomposition: ROE 2.95% = Net margin 5.14% × Asset turnover 0.356 × Financial leverage 1.61. Net margin benefited from operating leverage and a tax credit (-¥162m), lifting net income above ordinary income. Asset turnover is modest, consistent with an asset-intensive media portfolio. Leverage is moderate and not a primary driver of ROE. margin_quality: Gross margin 25.5% reflects stable content and production cost control. EBITDA margin of 6.5% and operating margin of 2.7% (¥1.28bn/¥46.69bn) show improvement YoY as operating income outpaced revenue growth. Net margin at 5.14% is elevated versus operating margin primarily due to the favorable tax line and potentially non-recurring items; underlying run-rate profitability is closer to operating margin. operating_leverage: Revenue rose 12.1% YoY while operating income rose 38.9% YoY, indicating positive operating leverage as fixed costs were absorbed over higher volumes. Sustainability of this leverage depends on maintaining revenue momentum and disciplined programming/content costs into 2H.

Growth Assessment

revenue_sustainability: Top-line growth of 12.1% YoY suggests recovery in core segments (broadcasting/contents/events), though seasonality and cyclicality in advertising should be considered for 2H. The low asset turnover (0.356x over the interim period) is typical for the sector and may improve marginally with better utilization. profit_quality: Profit growth outpaced sales due to cost discipline and a favorable tax credit; however, OCF/Net Income at 0.31 indicates weak cash conversion. Net income exceeding ordinary income suggests contributions from below-ordinary items (e.g., special gains or tax effects). Core operating profit improvements are real but partially masked by non-operating/tax benefits. outlook: If advertising demand and content monetization remain firm, operating margins could hold or improve modestly, but normalization of the tax rate and potential working capital outflows may constrain bottom-line growth and cash generation. Monitoring 2H programming costs, event pipelines, and advertising mix is key to assessing sustainability.

Financial Health

liquidity: Current ratio 241.6% and quick ratio 232.7% indicate strong short-term liquidity. Working capital is ¥29.03bn, providing a buffer for seasonal cash needs. Cash and equivalents were not disclosed in this period’s XBRL, so the liquidity assessment relies on ratios rather than absolute cash balances. solvency: Total liabilities of ¥50.31bn vs. equity of ¥81.48bn imply moderate leverage (D/E 0.62x). Interest expense is minimal at ¥35m with interest coverage of 36.6x, indicating low refinancing and interest rate risk under current conditions. capital_structure: With total assets of ¥130.98bn and equity of ¥81.48bn, the implied equity ratio is about 62% (calculated), reflecting a conservative balance sheet. No details on interest-bearing debt composition or maturity profile were disclosed in the provided data.

Cash Flow Quality

earnings_quality: OCF of ¥0.74bn vs. net income of ¥2.40bn yields OCF/NI of 0.31, signaling low conversion this half, likely from working capital builds and non-cash/tax effects (negative tax expense). Net income exceeded ordinary income, pointing to non-core contributions that may not recur. FCF_analysis: Free cash flow was not disclosed; investing cash flow was also not reported in XBRL (shown as zero placeholder). As a result, FCF coverage of shareholder returns or debt service cannot be reliably assessed for this period. working_capital: Current assets of ¥49.53bn and current liabilities of ¥20.50bn indicate ample coverage, but the low OCF suggests cash was tied up (e.g., receivables timing, production costs in progress). Inventory is ¥1.82bn, modest relative to sales; receivables/payables dynamics are likely the dominant swing factors.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are not disclosed in this dataset (zeros are placeholders). Therefore, we cannot compute a current payout ratio from the provided information. FCF_coverage: FCF is not disclosed, and investing cash flows are unavailable. Consequently, cash coverage of dividends cannot be assessed this quarter from provided data. policy_outlook: Without disclosed DPS or guidance, dividend policy visibility is limited in this release. From a capacity standpoint, underlying earnings improved and leverage is modest; however, weak OCF conversion this half suggests that sustainable distributions should be anchored to normalized cash flows rather than interim net income.

Risk Assessment

Business Risks:

• Advertising market cyclicality affecting broadcasting revenues
• Content production and programming rights cost inflation
• Audience share and ratings volatility impacting ad pricing
• Event and live business execution risks and potential cancellations
• Shift of viewers/advertisers to digital and streaming platforms
• Regulatory and licensing risks in broadcasting
• Project timing and seasonality causing earnings volatility

Financial Risks:

• Low OCF-to-net income (0.31) indicating weaker cash conversion
• Potential normalization of tax rate removing a current-period earnings tailwind
• Limited disclosure of investing and cash balances impeding FCF visibility
• Exposure to working capital swings (receivables collection timing)
• Possible impairment risk on content/assets if monetization underperforms

Key Concerns:

• Quality of earnings given negative tax expense and NI > ordinary income
• Weak cash conversion despite higher profits
• Limited transparency on cash, investing flows, and dividend policy this period

Investment Implications

Key Takeaways:

• Revenue grew 12.1% YoY with operating income up 38.9%, demonstrating positive operating leverage
• Net income increased 63.8% YoY, aided by a tax credit; underlying profitability is closer to operating performance
• Liquidity is strong (current ratio 241.6%, quick ratio 232.7%) and leverage moderate (D/E 0.62x)
• Interest burden is minimal (¥35m; 36.6x coverage), reducing financial risk
• Cash conversion is weak (OCF/NI 0.31), elevating the importance of 2H working capital management
• FCF and DPS were not disclosed, limiting assessment of capital return capacity this quarter

Metrics to Watch:

• Spot and time advertising trends and pricing
• Programming/content cost ratio and gross margin trajectory
• Operating cash flow and OCF/NI normalization
• Working capital (receivables days, payables, production advances)
• Ordinary income vs. net income gap (tax and extraordinary items)
• Capex and investing cash flows as disclosed in subsequent filings

Relative Positioning: Within Japanese broadcasting/media peers, the company exhibits improving operating momentum and a conservative balance sheet with low interest burden, but trails on cash conversion quality this half; sustained top-line growth with disciplined content costs and improved OCF would strengthen its relative standing.

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