Maruken Lease Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥12.78B
• Operating Income: ¥785M
• Net Income: ¥553M
• EPS: ¥260.30

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

Maruken Lease Co., Ltd. (former: Marubeni Construction Material Lease) delivered solid topline and bottom-line momentum in FY2026 Q2 under JGAAP on a consolidated basis. Revenue rose 13.7% year over year to ¥12.78bn, evidencing steady demand and likely healthy utilization in its equipment-related businesses. Gross profit reached ¥2.02bn, implying a gross margin of 15.8%, while operating income increased 9.0% to ¥0.79bn, indicating some margin compression at the operating level versus revenue growth. Ordinary income of ¥1.17bn exceeded operating income by ¥0.38bn, suggesting sizable non-operating gains (e.g., interest/dividend income, equity method gains, or other financial income). Net income surged 43.8% to ¥0.83bn, translating to a net margin of 6.46%, with EPS of ¥260.30. The DuPont decomposition shows a reported ROE of 4.57% based on a net margin of 6.46%, asset turnover of 0.333, and financial leverage of 2.13; given this is a half-year period, the reported ROE is not annualized and should be interpreted with caution. Operating cash flow was strong at ¥1.18bn, resulting in an OCF/Net Income ratio of 1.43, which points to good earnings quality and disciplined working capital management in the period. The balance sheet appears sound: total assets were ¥38.40bn and equity ¥18.04bn, implying an estimated equity ratio around 47% (the reported 0% is an undisclosed placeholder). Liquidity looks adequate with a current ratio of 1.39x and working capital of ¥6.23bn, supporting ongoing operations. Interest coverage is robust at 46.2x, reflecting modest interest expense of ¥17m and healthy operating earnings. The effective tax rate mechanically computed from disclosed tax expense and net income is roughly 23%, contrasting with the disclosed 0% placeholder. EBITDA was ¥0.87bn (6.8% margin), consistent with operating income plus depreciation and amortization of ¥87m. Investing cash flow and cash balance were undisclosed (shown as zeros), so free cash flow cannot be reliably assessed despite positive OCF. Dividend data (DPS, payout, FCF coverage) were also undisclosed, limiting visibility on shareholder return policy. Overall, profitability is improving, cash generation appears solid, and leverage is moderate, but a notable portion of profit uplift comes from non-operating sources, and several key cash and dividend disclosures are missing.

Profitability Analysis

ROE_decomposition: Reported DuPont ROE = 4.57% = Net margin (6.46%) × Asset turnover (0.333) × Financial leverage (2.13). Note this is for a half-year and not annualized. Financial leverage of ~2.13x is derived from assets of ¥38.40bn and equity of ¥18.04bn. Asset turnover of 0.333 reflects the half-year denominator effect and the asset-heavy nature of the business. margin_quality: Gross margin 15.8% (¥2.02bn/¥12.78bn) supports a 6.1% operating margin (¥0.79bn/¥12.78bn) and 6.46% net margin. The spread between operating income and ordinary income (¥383m) indicates meaningful non-operating contributions. Effective tax rate implied at ~23% (¥251m tax / ~¥1.08bn pre-tax) vs a reported 0% placeholder. operating_leverage: Revenue grew 13.7% YoY while operating income rose 9.0% YoY, implying modest negative operating leverage this period, likely from cost inflation, mix, or higher SG&A. EBITDA margin of 6.8% is close to operating margin given relatively low reported D&A (¥87m), which may understate underlying asset depreciation in an equipment-rental-heavy model.

Growth Assessment

revenue_sustainability: The 13.7% YoY revenue increase suggests firm demand and potentially higher fleet utilization or pricing. Sustainability will depend on construction activity, macro conditions, and project pipeline visibility. profit_quality: Net income growth (+43.8% YoY) outpaced operating income (+9.0%), with ordinary income materially above operating income, indicating non-operating gains as a driver. OCF/NI of 1.43 supports near-term earnings quality, but reliance on non-operating contributions introduces volatility risk. outlook: Assuming stable construction demand and disciplined cost control, mid-single to low-double-digit revenue growth is plausible, but maintaining operating margin may be challenging if input costs or SG&A remain elevated. Normalization of non-operating items could temper net income growth relative to operating income.

Financial Health

liquidity: Current assets ¥22.38bn vs current liabilities ¥16.16bn yields a current ratio of 1.39x and working capital of ¥6.23bn. The quick ratio equals the current ratio due to undisclosed inventories; true quick ratio may be slightly lower. Liquidity appears adequate. solvency: Total liabilities ¥20.49bn vs equity ¥18.04bn implies liabilities/equity of 1.14x and an estimated equity ratio near 47% (equity/assets), indicating a balanced capital structure. capital_structure: Interest expense is modest (¥17m) with interest coverage of 46.2x, suggesting comfortable debt service capacity. The asset base of ¥38.40bn supports operations with moderate leverage; mix of short-term vs long-term debt is not disclosed.

Cash Flow Quality

earnings_quality: OCF of ¥1.18bn vs net income of ¥0.83bn gives an OCF/NI ratio of 1.43, indicating solid cash conversion and limited accrual build in the period. FCF_analysis: Investing cash flow is undisclosed (shown as zero), so free cash flow cannot be reliably computed. As a capital-intensive business, capex timing and proceeds from disposals can materially affect FCF. working_capital: Positive OCF suggests constructive working capital dynamics, but detailed movements (receivables, payables, advances) are not disclosed. Current assets and liabilities indicate sufficient short-term funding of operations.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are undisclosed for the period (zeros are placeholders). EPS is ¥260.30, but without DPS we cannot evaluate payout. FCF_coverage: With investing cash flows undisclosed, FCF coverage of dividends cannot be assessed. OCF is positive, which is supportive, but capital expenditure requirements are unknown. policy_outlook: No guidance or policy details provided here. For a leasing-oriented model, management typically balances capex for fleet with stable dividends; clarity would require official disclosures.

Risk Assessment

Business Risks:

• Cyclicality of construction and civil engineering activity affecting utilization and pricing
• Project delays or cancellations impacting rental duration and revenue visibility
• Competition and pricing pressure in equipment rental and related services
• Dependence on non-operating income, creating volatility in ordinary and net income
• Residual value risk on equipment and potential impairment losses
• Cost inflation (labor, maintenance, transport) compressing margins
• Regulatory and safety compliance costs for construction equipment

Financial Risks:

• Working capital swings tied to receivables and customer payment terms
• Refinancing and interest rate risk despite currently low interest burden
• Potential underestimation of depreciation relative to economic wear if reported D&A is not fully reflective
• Concentration of short-term liabilities (exact tenor mix undisclosed) that could pressure liquidity in a downturn

Key Concerns:

• Ordinary income materially above operating income, pointing to non-operating drivers of earnings
• Incomplete disclosure for cash, investing cash flows, inventories, and dividends limits assessment
• Operating income growth lagging revenue growth indicates margin pressure

Investment Implications

Key Takeaways:

• Healthy topline growth (+13.7% YoY) with positive operating profit growth (+9.0%).
• Net income growth (+43.8%) boosted by non-operating items; sustainability uncertain.
• Strong cash conversion (OCF/NI 1.43) supports earnings quality.
• Leverage moderate with estimated equity ratio around 47% and high interest coverage (46.2x).
• Operating margin compression suggests cost or mix headwinds.
• Data gaps (investing CF, cash, DPS) constrain full FCF and dividend analysis.

Metrics to Watch:

• Mix of operating vs non-operating income within ordinary income
• EBIT and EBITDA margins vs revenue growth (operating leverage)
• Capex and proceeds on asset sales (to derive true FCF)
• Working capital turns and OCF/NI ratio sustainability
• Leverage metrics (net debt/EBITDA once cash is disclosed) and interest coverage
• Utilization rates and rental yield/pricing trends

Relative Positioning: Within Japanese leasing and construction-equipment rental peers, Maruken Lease shows solid growth, conservative leverage, and strong interest coverage, but exhibits greater reliance on non-operating income in this period and faces some operating margin pressure.

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