NIPPON PARKING DEVELOPMENT Co.,Ltd. FY2026 Q3 Earnings Report

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Executive Summary

Cumulative results for Q3 of the fiscal year ending August 2026 showed increases in both revenue and earnings; however, the growth in operating income fell below revenue growth, and margins declined slightly. Revenue was ¥311.1B (+9.4% YoY), operating income was ¥70.2B (+5.6%), ordinary income was ¥71.8B (+8.4%), and net income (consolidated) was ¥52.1B (+12.5%). The increase in revenue was attributable to growth across all three major businesses—parking, ski resorts, and theme parks. However, the increase in SG&A expenses (+11.5%) exceeded the revenue growth rate, causing the operating margin to decline to 22.6% from 23.4% in the same period of the previous year. It should be noted that the increase in net income included the contribution of non-operating and extraordinary items, net, of ¥7.5B, centered on a ¥11.2B gain on the sale of fixed assets.

Factors Affecting Performance

【Revenue】Revenue increased 9.4% YoY to ¥311.1B. By segment, the Parking Business was the largest at ¥142.2B (45.7% of the total, YoY +7.4%), followed by the Ski Resort Business at ¥99.8B (32.1%, YoY +8.9%) and the Theme Park Business at ¥61.9B (19.9%, YoY +12.7%); all three businesses recorded revenue growth.

【Profit and Loss】Operating income increased 5.6% YoY to ¥70.2B, but the gross profit margin declined slightly to 41.1% from 41.6% in the previous year, while the operating margin declined to 22.6% from 23.4%. The primary cause was the increase in SG&A expenses to ¥57.8B (YoY +11.5%), which exceeded the rate of revenue growth. Ordinary income increased 8.4% YoY to ¥71.8B, exceeding operating income growth due to non-operating income, including a ¥1.5B foreign exchange gain. Net income increased 12.5% YoY to ¥52.1B, supported by extraordinary income of ¥11.3B, including a ¥11.2B gain on the sale of fixed assets (a temporary factor). In conclusion, although the Company recorded increases in both revenue and earnings, core operating margins declined slightly, with temporary non-operating and extraordinary items supplementing the effect of revenue growth.

Segment Analysis

The Parking Business generated revenue of ¥142.2B (YoY +7.4%) and operating income of ¥36.1B (YoY +10.7%), with a margin of 25.4%. It is the core business, achieving growth in both revenue and earnings while also improving its margin, and generating more than half (approximately 51%) of consolidated operating income. The Theme Park Business recorded revenue of ¥61.9B (YoY +12.7%) and operating income of ¥10.6B (YoY +30.8%), with earnings growth exceeding revenue growth and its margin improving to 17.2%. Meanwhile, the Ski Resort Business increased revenue to ¥99.8B (YoY +8.9%), but operating income declined to ¥27.2B (YoY -4.5%), and its margin fell to 27.3%. Among the three businesses that recorded revenue growth, only the Ski Resort Business experienced margin deterioration, making it the primary cause of the decline in the Company-wide operating margin.

Key Financial Indicators

【Profitability】The operating margin of 22.6%, ordinary income margin of 23.1%, and consolidated net income margin of 16.8% were all at high levels, although the operating margin declined from 23.4% in the same period of the previous year. 【Cash Flow Quality】Extraordinary income of ¥11.3B, primarily consisting of a ¥11.2B gain on the sale of fixed assets, and extraordinary losses of ¥3.8B, including ¥3.0B in impairment losses, resulted in net extraordinary income of ¥7.5B, thereby increasing a portion of net income; accordingly, some caution is warranted regarding earnings quality. 【Investment Efficiency】Annualized ROE was high at 28.7% (based on net income attributable to owners of the parent), supported by the combination of total asset turnover and financial leverage. 【Financial Soundness】The equity ratio was 40.4%, down from the equivalent 45.9% in the same period of the previous year. The increase in long-term borrowings to ¥200.2B, up +26.6% YoY, was a factor behind the rise in leverage. Meanwhile, cash and deposits of ¥269.3B exceeded interest-bearing debt, maintaining a net cash position.

Cash Flow Analysis

Although direct data from the cash flow statement has not been disclosed, funding trends can be confirmed from changes in the balance sheet. Cash and deposits increased by ¥52.7B from ¥216.6B in the same period of the previous year to ¥269.3B, while long-term borrowings also increased by ¥42.1B YoY, suggesting that funds raised through borrowing may have been allocated to investment and the accumulation of liquidity on hand. Property, plant and equipment increased 18.0% YoY to ¥194.4B, indicating continued capital investment, while the recognition of a ¥11.2B gain on the sale of fixed assets also suggests ongoing asset replacement. Treasury stock increased to ¥62.4B, and cash expenditures associated with shareholder returns also contributed to funding trends.

Quality of Earnings

Operating income and ordinary income, which indicate recurring earning power, increased 5.6% and 8.4% YoY, respectively, whereas net income increased at a higher rate of 12.5% YoY (consolidated); the divergence was attributable to non-operating and extraordinary items. Extraordinary income of ¥11.3B consisted almost entirely of the ¥11.2B gain on the sale of fixed assets, while extraordinary losses of ¥3.8B comprised ¥3.0B in impairment losses and ¥0.7B in losses on disposal of fixed assets. Net extraordinary income of ¥7.5B represented approximately 9.4% of profit before tax of ¥79.3B, indicating that temporary factors had a certain impact on the earnings level. Non-operating income was ¥4.0B, including a ¥1.5B foreign exchange gain, and this also represents a volatile item affected by foreign exchange market conditions. Comprehensive income was ¥55.9B, exceeding net income of ¥52.1B, supported by unrealized gains on other securities, including ¥3.2B in valuation differences on securities; thus, a certain divergence was observed between net income and comprehensive income.

Earnings Forecasts and Guidance

The cumulative Q3 progress rates against the full-year Company forecasts of revenue of ¥408.0B, operating income of ¥85.0B, and ordinary income of ¥85.0B were 76.2%, 82.5%, and 84.4%, respectively. Operating and ordinary income were progressing steadily in line with the usual pace. However, the full-year forecast assumes an operating margin of 20.8%, below the cumulative Q3 actual margin of 22.6%. The revenue and operating income required in Q4 are approximately ¥96.9B and ¥14.8B, respectively, indicating a plan that assumes a certain decline in profitability to achieve the full-year targets. There were no revisions to the earnings forecasts or dividend forecasts during the current quarter.

Shareholder Returns

The full-year dividend forecast is ¥9.0 per share, and the forecast payout ratio based on the full-year forecast EPS of ¥17.87 is approximately 50.4%. The dividend as of Q2 was ¥0, and the plan concentrates dividend payments at the fiscal year-end. Treasury stock increased from ¥46.1B in the same period of the previous year to ¥62.4B. Accordingly, in addition to the payout ratio based solely on dividends, developments in the capital policy, including changes in treasury stock, are also affecting net assets.

Risk Factors

1. Profit Margin Volatility in the Ski Resort Business: Against revenue of ¥99.8B (YoY +8.9%), operating income declined to ¥27.2B (YoY -4.5%), and the margin fell to 27.3%. Seasonal and weather-related factors, as well as fluctuations in operating costs, have a significant impact on the Company-wide profit margin.

2. Dependence on Non-Operating and Extraordinary Items: Extraordinary income, centered on the ¥11.2B gain on the sale of fixed assets, increased net income, while net extraordinary income of ¥7.5B accounted for approximately 9.4% of profit before tax. It is necessary to distinguish this contribution from recurring earnings growth.

3. Increase in Financial Leverage: Long-term borrowings increased 26.6% YoY to ¥200.2B, while the equity ratio declined to 40.4%. Although the net cash position supported by cash and deposits of ¥269.3B has been maintained, changes in the capital structure require ongoing monitoring.

Industry Benchmark (For Reference; Compiled by the Company)

Industry Benchmark (real_estate)

Profitability and Returns

The Company’s profitability is significantly above the industry median, with both its operating margin and net income margin ranking favorably within the industry.

Growth and Capital Efficiency

The revenue growth rate is below the industry median, indicating that the pace of growth is relatively moderate compared with the Company’s high profitability.

※Source: Compiled by the Company

Key Takeaways from the Financial Results

1. Although the Company continues to record increases in both revenue and earnings, the increase in SG&A expenses (+11.5%) exceeded the revenue growth rate (+9.4%), and the operating margin declined YoY. Whether revenue growth will translate into sustainable margin improvement is a key point of focus in the financial results.

2. The increase in net income (+12.5%) included the contribution of non-operating and extraordinary items, centered on the ¥11.2B gain on the sale of fixed assets. This differs in level from the growth in operating income and ordinary income (+5.6% and +8.4%, respectively), which reflect recurring earning power.

3. While the Parking Business is the core business, generating more than half of consolidated operating income, the Ski Resort Business recorded revenue growth but earnings decline, indicating variations in earnings contributions within the business portfolio.

Theoretical Share Price (Reference Value)

Sensitivity: ¥109–¥115 at cost of equity ±1%; ¥111–¥113 at ω±0.1.

Notes:

• Net assets as of the quarter-end are used (there is a timing difference from the full-year forecast).
• Because net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

(Valuation model: Residual Income Model (Ohlson-type; explicit 5-year fade) / Interest rate reference month: 2026-07 / Mechanically calculated value based solely on publicly disclosed data; it is not a forecast of the market share price or a recommendation of any specific investment action, and does not predict or guarantee the future share price.)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmark is reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting professionals as necessary.

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