BSN MEDIA HOLDINGS,INC. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥11.05B
• Operating Income: ¥493M
• Net Income: ¥410M
• EPS: ¥62.43

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

Verdict: Solid Q2 with healthy top-line growth, flat operating margin, and a sharp uplift in bottom-line driven by stronger non-operating gains and a clean cash flow profile. Revenue rose 8.1% YoY to 110.48, while operating income increased 8.2% YoY to 4.93, essentially maintaining operating margin despite a higher cost base. Net income jumped 37.8% YoY to 3.74, aided by non-operating income of 1.10, notably dividend income of 0.87. Gross margin printed at 26.7%, with SG&A at 24.51 (22.2% of sales), yielding an operating margin of 4.46%. Ordinary income reached 5.93, implying an ordinary income margin of 5.37% and highlighting the contribution from dividend and interest income. Operating margin was effectively flat YoY: from c.4.46% in the prior period to 4.46% this quarter (roughly +1 bp), indicating limited operating leverage. Net margin expanded by approximately 73 bps YoY to 3.38%, reflecting the step-up in non-operating contributions and a normalized tax rate. Earnings quality is strong: OCF of 12.10 was 3.23x net income, comfortably covering capex (2.01) and share repurchases (0.43). The balance sheet is robust with a current ratio of 356.9%, debt-to-equity of 0.27x, and interest coverage of 64x, implying minimal refinancing risk. Capital efficiency remains a key weakness: ROE is 1.4% and ROIC is 1.9%, both low for the sector and well below typical cost of capital. Non-operating income is material (about 29.5% of earnings mix), with dividend income alone at ~15% of ordinary income, adding some volatility tied to market conditions. Total comprehensive income of 13.22 materially exceeded net income, suggesting sizable unrealized gains on securities this period. While fundamentals are stable, structural headwinds persist: modest operating margins and low asset turnover constrain ROE. Forward-looking, the company can sustain investments and shareholder returns from internal cash generation, but meaningful ROE/ROIC improvement likely requires margin uplift (content cost discipline, ad yield mix) and/or asset base optimization. Watch for advertising market trends in the local media footprint and the stability of dividend income from investment securities. Overall, Q2 execution was disciplined with high cash conversion and contained financial risk, but capital efficiency remains the primary strategic challenge.

Profitability Analysis

ROE decomposition (DuPont): ROE = Net Profit Margin × Asset Turnover × Financial Leverage = 3.4% × 0.325 × 1.27 ≈ 1.4%. The largest constraint on ROE is low asset turnover (0.325) and modest net margin (3.4%), while leverage is conservative at 1.27x and not a driver. Operating margin was stable at 4.46% (c.+1 bp YoY), as SG&A grew roughly in line with revenue; SG&A-to-sales stands at 22.2%. Net margin expanded ~73 bps YoY (to 3.38%) on higher non-operating income (dividend income 0.87; interest income 0.10) and stable finance costs (interest expense 0.08), partially offset by an effective tax rate of 31.2%. Gross margin is 26.7%, indicating a limited value-add wedge after content and programming costs. EBITDA margin is 8.5% (EBITDA 9.37), and D&A of 4.44 absorbs nearly half of EBITDA, keeping EBIT margin modest. Business drivers: advertising recovery and stable local media demand supported revenue, while cost discipline kept operating margin flat. The uplift in the bottom line is partly non-operating (market-linked dividends/valuation environment), which may not be recurring. Sustainability: operating profitability appears steady but thin; without pricing power or efficiency gains, margin expansion will be challenging. Watch for any period where SG&A growth outpaces revenue—currently, no red flag is evident from available data. Capital efficiency remains subpar (ROIC 1.9%), indicating that improving asset utilization and portfolio returns (e.g., rationalizing low-yield assets) is key to enhancing ROE.

Growth Assessment

Top-line grew 8.1% YoY to 110.48, supported by media advertising normalization and stable regional demand. Operating income rose 8.2% YoY to 4.93, implying neutral operating leverage this quarter. Net income advanced 37.8% YoY to 3.74, outpacing revenue growth due to stronger non-operating income, particularly dividend receipts (0.87). Operating margin held at 4.46%, while net margin improved to 3.38% (c.+73 bps YoY). The mix shows increased reliance on non-operating contributions (non-operating income ratio 29.5%), which may be more volatile than core operations. Revenue sustainability hinges on local advertising markets and content monetization; there is limited visibility on digital revenue traction from disclosures. Profit quality is good this quarter thanks to high cash conversion (OCF/NI 3.23x), but recurring growth depends on maintaining ad volumes and cost control. Outlook: stable to modest growth with limited margin expansion absent structural efficiencies; upside optionality exists if the investment securities portfolio continues to contribute dividends, though that is market-dependent.

Financial Health

Liquidity is strong: current ratio 356.9% and quick ratio 356.9% (cash 96.28 plus receivables 35.12 vs current liabilities 43.54). Solvency is conservative with debt-to-equity at 0.27x and interest coverage at 64.23x. Short-term loans (3.67) are de minimis relative to cash and current assets, indicating low maturity mismatch risk; long-term loans are 1.02. Working capital is ample at 111.82. Total equity is 267.21 vs total assets 340.39, implying an equity ratio of about 78.5% (low leverage). No warnings triggered (Current Ratio well above 1.0; D/E far below 2.0). No specific off-balance sheet obligations were disclosed in the provided data.

Cash Flow Quality

Earnings quality is high: OCF/Net Income is 3.23x (12.10 / 3.74), indicating robust cash conversion and low accrual risk. Capex was 2.01, implying an indicative FCF of ~10.09 before dividends and other investing cash flows (investing CF not disclosed). Financing CF was -2.73, including share repurchases of 0.43 and likely dividend/repayment outflows (exact dividends unreported). Working capital appears well-managed with no signs of period-end inflations; OCF strength suggests limited revenue recognition or receivables timing issues. Cash and deposits (96.28) provide a substantial liquidity buffer for operations and investments.

Dividend Sustainability

The calculated payout ratio is 22.5%, comfortably below the <60% benchmark, though DPS is unreported. With OCF of 12.10 and modest capex of 2.01, indicative FCF (~10.09) likely covers ordinary dividends and small-scale buybacks (0.43), assuming payout levels consistent with the stated ratio. Balance sheet strength (equity ratio ~78.5%) and low debt support continuity of shareholder returns. Key watchpoints are the stability of non-operating income that contributes to distributable profit and any step-up in capex or content investments that could compress FCF.

Risk Assessment

Business Risks:

• Advertising market cyclicality impacting local TV/radio revenues and pricing
• Content/programming cost inflation pressuring gross and operating margins
• Digital shift potentially eroding traditional ad inventory yields if monetization lags
• Dependence on regional economic activity in core broadcast areas

Financial Risks:

• Earnings mix reliance on non-operating/dividend income (0.87) introducing market-linked volatility
• Low capital efficiency (ROIC 1.9%, ROE 1.4%) raising long-term value creation concerns
• Valuation risk on investment securities (76.72) affecting comprehensive income and equity
• Potential decline in dividend income from investees during market downturns

Key Concerns:

• Sustained low asset turnover (0.325) limits ROE regardless of leverage
• Operating margin thin at 4.46%, leaving limited buffer against revenue shocks
• Net margin uplift driven partly by non-operating items, not core operations
• Visibility limited due to unreported SG&A line items and investing CF details

Investment Implications

Key Takeaways:

• Core operations stable with flat operating margin and 8.1% revenue growth
• Bottom-line strength driven by non-operating gains (notably dividends)
• Exceptional cash conversion (OCF/NI 3.23x) and low leverage de-risk the balance sheet
• Capital efficiency is the chief constraint (ROIC 1.9%, ROE 1.4%)
• Ample liquidity and FCF capacity support ongoing shareholder returns and capex

Metrics to Watch:

• Advertising revenue trajectory and sellout/pricing in local media
• SG&A-to-sales and content cost trends for margin resilience
• Non-operating income (dividends, interest) volatility and sustainability
• Capex plans vs. OCF to gauge FCF durability
• Asset turnover and initiatives to optimize the asset base

Relative Positioning: Within domestic regional media peers, BSN exhibits stronger liquidity and lower leverage than average, comparable operating margins, but weaker capital efficiency (ROE/ROIC) due to low asset turnover and a sizable investment securities base that dilutes operating returns.

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