RKB Mainichi Holdings, Inc. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥15.18B
• Operating Income: ¥474M
• Net Income: ¥240M
• EPS: ¥157.23

Income Statement

Balance Sheet

Cash Flow Statement

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

RKB Mainichi Holdings (TSE:9407) reported FY2026 Q2 consolidated results under JGAAP showing a strong rebound in top-line and operating performance, with revenue up 40.8% year on year to ¥15.181bn and operating income up 115.8% to ¥474m. Ordinary income of ¥632m exceeded operating income, indicating net positive non-operating contributions despite minimal interest burden (interest expense: ¥1m). Net income rose 88.1% YoY to ¥344m, with EPS reported at ¥157.23, though shares outstanding were not disclosed in the dataset. Reported gross profit of ¥3.691bn yields a gross margin of 24.3%, and EBITDA was ¥1.030bn (6.8% margin), evidencing meaningful operating leverage in the period. The DuPont bridge indicates ROE of 0.81% driven by a low net margin of 2.27%, modest asset turnover of 0.254, and conservative financial leverage of 1.41x. Liquidity is strong: current assets of ¥16.862bn versus current liabilities of ¥5.525bn translate to a current ratio of 305% and working capital of ¥11.337bn. The balance sheet is very solid with total equity of ¥42.280bn against total assets of ¥59.715bn; despite an equity ratio field showing 0.0% (undisclosed), computed equity ratio is approximately 70.8%, underscoring low balance-sheet risk. Operating cash flow was robust at ¥908m, equating to 2.64x net income, suggesting earnings quality benefits from non-cash charges (D&A: ¥556m) and/or favorable working capital. Investing and cash balances were shown as zero in the extract (unreported), so free cash flow cannot be reliably calculated; the displayed FCF and coverage figures should be treated as placeholders rather than actuals. No dividend is reported (DPS and payout ratio both 0.0%), and financing cash flow was an outflow of ¥475m, implying capital returns or debt reduction, though specifics are not disclosed. The effective tax rate appears misstated at 0.0% in the metrics, while tax expense was ¥92m; the path from ordinary income to net income suggests possible extraordinary items. Overall, the company demonstrates clear operating recovery with strong liquidity and low leverage, but profitability levels remain modest on a margin basis for the half-year. The sustainability of revenue growth will hinge on advertising trends, content monetization, and event-driven programming typical of broadcasters. Given data limitations (notably cash, investing CF, share data, and equity ratio fields), conclusions focus on reported non-zero values and computed ratios from disclosed figures. Near-term monitoring should center on operating margin durability, non-operating income sources, and cash deployment. The risk profile appears manageable due to a strong equity base, but cyclical advertising exposure and potential content cost inflation remain key variables.

Profitability Analysis

ROE decomposition (DuPont): Net profit margin 2.27% × Asset turnover 0.254 × Financial leverage 1.41 = ROE 0.81%. Operating margin stands at roughly 3.1% (¥474m/¥15,181m), while ordinary margin is approximately 4.2% (¥632m/¥15,181m), indicating non-operating gains or income lifted profitability above core operations. Reported gross margin is 24.3% on gross profit of ¥3.691bn; note this is lower than what would result from a simple revenue minus cost-of-sales calculation, suggesting classification differences within cost lines (typical in media accounting) and should be interpreted as reported. EBITDA margin of 6.8% reflects moderate margin structure with meaningful D&A intensity (D&A/Revenue ≈ 3.7%). Operating leverage appears positive: revenue grew 40.8% YoY while operating income rose 115.8% YoY, implying fixed-cost absorption and/or better content mix. Interest burden is negligible (interest expense ¥1m; interest coverage ~474x on operating income), so financial leverage is not a material drag on profitability. The step-up from operating to ordinary income indicates supportive non-operating items; investors should assess sustainability of these items in the second half. Overall profitability improved meaningfully YoY but remains modest in absolute margin terms for the half-year, consistent with industry dynamics and timing of content amortization.

Growth Assessment

Top-line growth of 40.8% YoY to ¥15.181bn is strong, likely driven by recovery in advertising demand, content/event scheduling, and possibly consolidation effects (if any), though no segment detail is provided. Operating income growth of 115.8% indicates favorable operating leverage and improved cost discipline. The EBITDA uplift to ¥1.030bn corroborates improved capacity to generate cash earnings. Quality of profit appears reasonable given OCF/NI of 2.64x and D&A of ¥556m, suggesting earnings are backed by cash flow and non-cash charges rather than aggressive capitalization. Ordinary income exceeded operating income, implying growth benefited from non-operating items; the durability of such contributions is uncertain. The gap between ordinary income (¥632m) and net income (¥344m) alongside tax expense (¥92m) hints at extraordinary items or equity-method impacts, which could normalize in H2. Asset turnover at 0.254 is low, typical for asset-heavy broadcasters; revenue growth without proportional asset growth would be needed to improve ROTAs. Given the half-year nature of the data, annualization effects are material; sustaining H1 momentum will depend on the programming calendar and macro advertising trends. Overall, the growth trajectory is positive with improved operating leverage, but visibility on the sustainability of both revenue and non-operating contributions remains limited absent segment disclosure.

Financial Health

Total assets are ¥59.715bn and total equity is ¥42.280bn, implying a computed equity ratio of about 70.8% (despite the 0.0% field, which is undisclosed). Total liabilities of ¥14.687bn yield a conservative capital structure; the provided debt-to-equity ratio of 0.35x likely reflects a broad liability measure and should be interpreted cautiously. Liquidity is strong: current assets ¥16.862bn vs current liabilities ¥5.525bn gives a current ratio of 305% and a quick ratio of 286%, with working capital of ¥11.337bn. Interest expense is de minimis (¥1m), and interest coverage is extremely high (~474x), indicating minimal refinancing or rate risk in the near term. The financing cash outflow of ¥475m suggests shareholder returns or debt repayment; without details on dividends (none reported) or buybacks (share data undisclosed), the exact use is unclear. Overall solvency risk is low given the sizable equity cushion and low apparent reliance on interest-bearing debt.

Cash Flow Quality

Operating cash flow of ¥908m versus net income of ¥344m yields an OCF/NI ratio of 2.64x, indicating strong cash conversion supported by non-cash charges (D&A ¥556m) and/or working capital tailwinds. EBITDA of ¥1.030bn aligns broadly with OCF strength, though the bridge between EBITDA and OCF (changes in receivables/payables, program inventories) is not disclosed. Investing cash flow is shown as 0 (undisclosed), so free cash flow cannot be reliably computed; the displayed FCF of 0 should be treated as a placeholder, not an economic measure. Capex intensity cannot be assessed from the provided data; broadcasters typically have periodic equipment and content-related investments that may be lumpy. Cash and equivalents are also shown as 0 (undisclosed), limiting end-period liquidity assessment from cash balances; however, balance-sheet liquidity ratios remain strong. Overall, earnings quality appears good in H1 with cash generation exceeding accounting profit, but full-year FCF assessment requires investing cash flow disclosure.

Dividend Sustainability

No dividend is reported for the period (DPS 0.00; payout ratio 0.0%). With OCF positive and the balance sheet strong, capacity for distributions exists conceptually, but the absence of investing cash flow and cash balance disclosures prevents a proper free cash flow coverage analysis (the reported FCF coverage 0.00x is not meaningful). Company policy trends are not provided; thus, no inference can be drawn about future dividends. Any dividend outlook should consider the stability of operating cash flow, expected capex/content investments in H2, and potential uses of cash (e.g., balance-sheet prudence or buybacks, noting financing CF outflow of ¥475m).

Risk Assessment

Business Risks:

• Cyclical advertising revenue exposure impacting top-line visibility
• Content cost inflation and program scheduling risk affecting margins
• Event-driven revenue volatility (sports/one-off specials)
• Audience share and ratings risk influencing ad pricing and inventory sell-through
• Regulatory and spectrum-related risks specific to broadcasters
• Competition from digital platforms reducing traditional TV ad spend

Financial Risks:

• Limited transparency on investing cash flows and cash balances
• Potential volatility from non-operating and extraordinary items between operating and net income
• Working capital swings tied to receivables/payables cycles in advertising
• Concentration risk if a small number of advertisers contribute outsized revenue (not disclosed)

Key Concerns:

• Sustainability of non-operating income that lifts ordinary profit above operating profit
• Lack of disclosure for cash, investing CF, and share data limiting per-share and FCF analysis
• Reported gross profit vs cost-of-sales arithmetic discrepancy suggests classification differences that complicate margin benchmarking

Investment Implications

Key Takeaways:

• Strong revenue recovery (+40.8% YoY) with amplified operating leverage (+115.8% YoY OI)
• Healthy cash conversion (OCF/NI 2.64x) and solid EBITDA generation (¥1.03bn, 6.8% margin)
• Very strong balance sheet with computed equity ratio ~70.8% and minimal interest burden
• Margins remain modest at the operating level (~3.1%), leaving room for improvement or sensitivity to cost pressure
• Non-operating gains contributed meaningfully; sustainability requires monitoring

Metrics to Watch:

• Operating margin and SG&A/programming cost ratio in H2
• Ordinary-to-operating income gap (non-operating items sustainability)
• OCF versus EBITDA and working capital movements (receivables/advances)
• Capex and investing cash flows to gauge true FCF
• Advertising demand indicators and spot/unit pricing
• Equity ratio and interest-bearing debt movements (if disclosed)

Relative Positioning: Within Japan’s broadcasting cohort, RKB appears conservatively capitalized with strong liquidity and low financial leverage, exhibiting improved operating leverage amid a cyclical upswing; however, profitability metrics remain mid-to-lower range on operating margin relative to peers with higher-scale networks, and disclosure gaps limit precise per-share and FCF comparisons.

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
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