NIPPON PARKING DEVELOPMENT Co.,Ltd. FY2026 FY Earnings Report

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Executive Summary

All businesses—parking, ski resorts, and theme parks—posted increases in both revenue and profit, resulting in continued growth in both revenue and earnings. Revenue was ¥40.71B (+10.5% YoY), Operating Income was ¥8.52B (+11.2%), Ordinary Income was ¥8.91B (+13.7%), and consolidated Net Income was ¥6.79B (+22.3%). Profit growth exceeding revenue growth was attributable to improved operating leverage, primarily in the theme park and parking businesses, while extraordinary income, mainly gains on the sale of fixed assets, further boosted earnings growth.

Factors Affecting Performance

【Revenue】Revenue increased 10.5% YoY to ¥40.71B. By segment, the Theme Park Business recorded the highest growth at ¥8.95B (+16.8%), followed by the Ski Resort Business at ¥11.49B (+9.9%) and the Parking Business at ¥19.21B (+7.9%), the core business accounting for 47.2% of total revenue. All segments recorded revenue growth, confirming expanding demand across the overall business portfolio.

【Profit and Loss】Operating Income increased 11.2% to ¥8.52B, exceeding revenue growth, and the operating margin improved to 20.9% from 20.8% in the previous year, a +0.1pt improvement. By segment, the Theme Park Business posted the highest profit growth at +27.2%, with its profit margin improving to 19.1%. In contrast, profit growth in the Ski Resort Business was limited to 5.7% versus revenue growth of 9.9%, resulting in only limited margin improvement. Ordinary Income was ¥8.91B (+13.7%), with non-operating income and expenses making a positive contribution, including a ¥0.13B foreign exchange gain. Extraordinary income of ¥1.30B, primarily gains on the sale of fixed assets, and extraordinary losses of ¥0.50B, including an impairment loss of ¥0.31B, were offset, resulting in a net ¥0.79B boost. Consolidated Net Income increased 22.3% to ¥6.79B, exceeding Operating Income growth; however, it should be noted that this includes the contribution of temporary extraordinary income. In conclusion, the company posted increases in both revenue and profit across all segments.

Segment Analysis

The core Parking Business maintained the highest level among all segments, with revenue of ¥19.21B (+7.9%), Operating Income of ¥4.93B (+9.9%), and a profit margin of 25.7%, accounting for more than half of total segment profit. The Theme Park Business recorded revenue of ¥8.95B (+16.8%) and Operating Income of ¥1.71B (+27.2%), the highest rates of both revenue and profit growth, while its profit margin improved to 19.1%. The Ski Resort Business posted revenue of ¥11.49B (+9.9%) and Operating Income of ¥2.37B (+5.7%); although profit increased, margin improvement was gradual, with the profit margin reaching 20.6%. Other Businesses recorded revenue of ¥1.06B (+16.0%) but a decline in Operating Income to ¥0.20B (-7.2%). After deducting ¥0.696B in company-wide expense adjustments from total segment profit of ¥9.21B, consolidated Operating Income was ¥8.52B.

Key Financial Indicators

【Profitability】The 20.9% operating margin improved slightly from 20.8% in the previous year, while the company maintained high profitability, with a gross margin of 40.0% and a consolidated Net Income margin of 16.7%. 【Cash Flow Quality】Operating Cash Flow (OCF) was ¥8.21B, exceeding Net Income of ¥6.79B, indicating favorable cash conversion. However, the OCF-to-EBITDA ratio was 0.76x against EBITDA of ¥10.79B, which was somewhat modest, suggesting room for improvement in cash conversion after tax payments and other items. 【Investment Efficiency】ROE remained high at 27.2%, while capital expenditures of ¥7.26B reached approximately 3.2x depreciation and amortization expense of ¥2.27B, indicating that the company is in a growth investment phase. 【Financial Soundness】The Equity Ratio was 40.9% (-4.3pt YoY), declining relatively as total assets expanded. However, current assets of ¥33.52B versus current liabilities of ¥10.45B indicate ample liquidity, with no concerns regarding short-term payment capacity.

Cash Flow Analysis

Operating Cash Flow was ¥8.21B, essentially flat at +0.3% YoY, but the absolute level of cash generation was maintained relative to Net Income growth. Investing Cash Flow represented an outflow of ¥9.27B, primarily reflecting capital expenditures of ¥7.26B and indicating continued growth investment. Financing Cash Flow was an outflow of ¥0.36B, as share repurchases of ¥2.51B were offset by proceeds from and repayments of long-term borrowings. As a result, Free Cash Flow, calculated as the sum of Operating Cash Flow and Investing Cash Flow, was a deficit of ¥1.06B, meaning that investment during the period exceeded cash generated from operating activities. Cash and deposits remained substantial at ¥27.52B, and concerns regarding funding are considered limited even during this period of investment outflows.

Quality of Earnings

Operating Income and Ordinary Income reflected recurring growth based on the underlying performance of the businesses. Meanwhile, Profit Before Tax of ¥9.70B included extraordinary income of ¥1.30B, primarily gains on the sale of fixed assets, and extraordinary losses of ¥0.50B, including an impairment loss of ¥0.31B, resulting in a net boost of ¥0.79B. The fact that Net Income growth of +22.3% exceeded Operating Income growth of +11.2% partly reflects the contribution of these temporary extraordinary gains and losses. Non-operating income of ¥0.78B also included items that cannot necessarily be considered recurring, such as a ¥0.13B foreign exchange gain and ¥0.10B in dividends received. On the other hand, OCF remained above Net Income, and changes in working capital were limited. Accordingly, earnings inflation through accruals was limited, and the underlying quality of earnings at the operating level can be considered sound.

Earnings Forecast and Guidance

Progress against the full-year company forecast was 89.1% for Revenue (¥40.71B/¥45.70B), 85.2% for Operating Income (¥8.52B/¥10.00B), and 89.1% for Ordinary Income (¥8.91B/¥10.00B). Consolidated Net Income of ¥6.79B has already substantially exceeded the company forecast of ¥3.70B. However, the company forecast may be based on a different definition rather than profit attributable to owners of the parent, and caution is therefore required when making a simple comparison. The forecast for the next period calls for Revenue growth of +12.3% and Operating Income growth of +17.4%, incorporating an improvement in profit margins.

Shareholder Returns

The annual dividend was ¥9.00 per share, compared with ¥0 in the previous year, marking the year of the effective initiation and increase of dividends. The Payout Ratio was 49.0%, which is not excessive as a level of profit distribution. In addition, the company conducted share repurchases of ¥2.51B, resulting in a relatively high Total Return Ratio when dividends and share repurchases are combined. The company forecast indicates a policy of increasing the next-period dividend to ¥10.00 per share. Although continued shareholder returns during a period of negative Free Cash Flow are supported by substantial cash on hand of ¥27.52B, monitoring alongside the trend in investment expenditures is advisable.

Risk Factors

1. Weather and demand sensitivity risk: The Ski Resort Business (Revenue of ¥11.49B, Operating Income of ¥2.37B) has a high degree of dependence on snowfall and visitor numbers, while the performance of the Theme Park Business (Revenue of ¥8.95B) is also affected by fluctuations in consumer sentiment and visitor numbers.

2. Risk of recovering investments in construction in progress: Construction in progress reached ¥4.079B, accounting for approximately 20.1% of property, plant and equipment. Attention should be paid to whether utilization and monetization after completion progress as expected, as well as to the potential for longer investment recovery periods and impairment.

3. Sustainability risk in capital allocation: Despite Free Cash Flow being a deficit of ¥1.06B, the company continues shareholder returns totaling dividends and share repurchases of ¥2.51B, resulting in capital allocation that depends on cash and deposits of ¥27.52B and available borrowing capacity.

Industry Benchmarks (Reference; Compiled by the Company)

Profitability and Returns

The company’s profitability is well above the industry median and ranks among the upper tier within the industry.

Growth and Capital Efficiency

Revenue growth was slightly below the industry median but remained within the IQR range.

※Source: Compiled by the Company

Key Takeaways from the Financial Results

1. Among the increases in both revenue and profit across all segments, the Theme Park Business showed the strongest growth momentum, with Revenue up +16.8% and Operating Income up +27.2%, making it the leading driver of the business portfolio.

2. Construction in progress has expanded to a level equivalent to approximately 20% of property, plant and equipment, indicating a growth investment phase. Progress in utilization and monetization will be key points for assessing investment recovery and asset quality going forward.

3. The contribution of extraordinary income, primarily gains on the sale of fixed assets, was a factor behind Net Income growth exceeding Operating Income growth. When assessing recurring earnings power, it is useful to review the trends in Operating Income and Ordinary Income together.

Theoretical Share Price (Reference Value)

Sensitivity: ¥106–¥112 at Cost of Equity ±1%; ¥108–¥111 at ω±0.1.

Note:

• Goodwill amortization of ¥0.1 per share is added back to earnings (to reflect a non-cash expense and improve comparability with IFRS companies).

(Calculation model: Residual Income Model (Ohlson-type; explicit 5-year fade) / Interest rate reference month: 2026-08 / Mechanically calculated solely from publicly disclosed data; this is not a forecast of the market share price or a recommendation of any specific investment action, nor does it forecast or guarantee future share prices.)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting professionals where necessary.

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