SBS Holdings,Inc. FY2025 Q3 Earnings Report

Financial Highlights

• Net Sales: ¥364.36B
• Operating Income: ¥17.34B
• Net Income: ¥8.19B
• EPS: ¥242.34

Income Statement

Balance Sheet

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

SBS Holdings (TSE: 2384) reported solid FY2025 Q3 consolidated results under JGAAP, with broad-based profit improvement outpacing topline growth. Revenue rose 10.3% YoY to ¥364.36bn, while operating income grew 31.1% to ¥17.34bn, indicating meaningful operating leverage. Net income increased 27.4% to ¥9.63bn, with EPS at ¥242.34. Gross profit was ¥36.92bn, implying a gross margin of 10.1%, and operating margin expanded to approximately 4.8%. Using the provided DuPont metrics, ROE is 7.95% on a net margin of 2.64%, asset turnover of 1.086x, and financial leverage of 2.77x; this implies an ROA around 2.9%. Balance sheet strength appears adequate: total assets were ¥335.63bn, total equity ¥121.13bn, and total liabilities ¥204.34bn, yielding an equity ratio of roughly 36.1% (despite the reported 0.0% figure, which appears undisclosed rather than truly zero). Liquidity looks sound with a current ratio of 136% and a quick ratio near 100%, supported by ¥41.86bn of positive working capital. Interest coverage is strong at 23.3x, reflecting manageable finance costs relative to operating earnings. Ordinary income slightly exceeded operating income, suggesting that non-operating items (including interest income and other gains) broadly offset interest expense of ¥0.74bn. The implied effective tax rate is approximately low-30% based on reported tax expense, though formal cash flow data are not disclosed. Cash flow figures (OCF/FCF) and depreciation are not reported in the XBRL, limiting our ability to assess earnings quality and capital intensity precisely; the 0 values should be interpreted as undisclosed. Dividend data (DPS, payout, FCF coverage) are likewise shown as 0, implying not disclosed rather than zero; therefore, dividend policy assessment remains tentative. Overall, the quarter reflects healthy revenue momentum, notable margin expansion, and disciplined cost control, with moderate leverage and satisfactory liquidity. Key watchpoints include validation of earnings quality once cash flows and depreciation are disclosed, the sustainability of margin gains in a competitive logistics market, and capital allocation between growth investments and shareholder returns.

Profitability Analysis

ROE_decomposition: Reported DuPont: Net margin 2.64% × Asset turnover 1.086 × Leverage 2.77 = ROE 7.95%. Implied ROA ≈ 2.64% × 1.086 = 2.87%. Financial leverage (Assets/Equity) of ~2.77x is a key driver of ROE, with improving margins providing incremental support. margin_quality: Gross margin is 10.1% (GP ¥36.92bn on revenue ¥364.36bn). Operating margin is ~4.76% (OI ¥17.34bn), up YoY: prior OI implied at ~¥13.23bn and prior revenue ~¥330.46bn, suggesting prior OPM ~4.0% and +~0.8pp expansion. Net margin improved to 2.64% from an implied ~2.29% a year ago. Ordinary income (¥17.38bn) is slightly above OI, indicating non-operating gains broadly offset interest costs. operating_leverage: Operating income growth (+31.1% YoY) outpaced revenue growth (+10.3% YoY), implying an operating leverage factor of ~3.0x, driven by cost efficiencies and scale. SG&A (approximated as GP – OI) is ~¥19.58bn, ~5.4% of sales, suggesting effective overhead control.

Growth Assessment

revenue_sustainability: Revenue grew 10.3% YoY to ¥364.36bn. While segment drivers are not disclosed, the scale indicates continued demand in contract logistics and transportation; sustainability will depend on customer retention, e-commerce volumes, and pricing power in a competitive market. profit_quality: Margin expansion at both operating and net levels points to improved mix/pricing and fixed-cost absorption. Ordinary income aligns closely with OI, suggesting limited reliance on non-recurring items. However, the absence of depreciation and cash flow data constrains assessment of capital intensity and accruals. outlook: With better operating leverage and a balanced capital structure, continued growth appears plausible if volume momentum persists and cost discipline holds. Watch for fuel/labor pass-through effectiveness and warehouse utilization as potential determinants of margin durability.

Financial Health

liquidity: Current assets ¥157.86bn vs current liabilities ¥116.01bn yields a current ratio of 1.36x; quick ratio is ~1.00x (excluding inventories of ¥41.80bn), indicating adequate short-term coverage. Working capital is positive at ¥41.86bn. solvency: Total liabilities ¥204.34bn vs equity ¥121.13bn results in a debt-to-equity of ~1.69x; equity ratio is ~36.1% (computed), indicating moderate leverage. Interest coverage is strong at ~23.3x (OI/interest expense). capital_structure: Leverage of 2.77x (Assets/Equity) supports ROE but warrants monitoring amid capex and growth initiatives. Non-operating items net to a small gain, implying manageable financing drag this period.

Cash Flow Quality

earnings_quality: OCF is not disclosed (reported as 0), so OCF/NI cannot be interpreted; earnings quality cannot be validated via cash conversion this quarter. The proximity of ordinary income to operating income suggests limited reliance on non-operating boosts. FCF_analysis: Investing and financing cash flows are undisclosed (reported as 0), preventing FCF estimation. Depreciation is also undisclosed, limiting EBITDA reconstruction and capex inference. working_capital: With inventories of ¥41.80bn and quick ratio ~1.0x, the balance sheet indicates manageable working capital intensity. However, without period-over-period changes, we cannot assess cash tied in receivables, inventories, or payables.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are shown as 0.00 but should be treated as undisclosed. EPS is ¥242.34, and net income is ¥9.63bn; absent DPS, payout cannot be evaluated. FCF_coverage: FCF is undisclosed; hence FCF coverage of dividends cannot be assessed. Cash and equivalents are also undisclosed in the cash flow section (while included in current assets). policy_outlook: Without dividend disclosures or cash flow visibility, policy indications are limited. Sustainability will depend on consistent profitability, leverage management (D/E ~1.69x), and the cadence of capex for logistics assets.

Risk Assessment

Business Risks:

• Competitive pricing pressure in domestic logistics and 3PL services.
• Fuel and utility cost pass-through risk impacting margins.
• Labor shortages and rising wage costs affecting capacity and service quality.
• Customer concentration and contract renewal risk.
• Execution risk on capacity expansions (warehouses, fleet) and utilization levels.
• Potential disruption from e-commerce demand volatility and supply-chain normalization.

Financial Risks:

• Moderate leverage (Liabilities/Equity ~1.69x) heightens sensitivity to downturns.
• Interest rate risk on floating-rate debt despite strong coverage (23.3x).
• Working capital absorption risk from inventories and receivables in growth periods.
• Limited visibility on cash flows and capex due to undisclosed OCF/FCF and depreciation.
• Potential exposure to non-operating items and extraordinary charges (not detailed).

Key Concerns:

• Lack of disclosed cash flow and depreciation data inhibits earnings quality assessment.
• Sustainability of recent margin expansion amid cost inflation and competitive dynamics.
• Capital intensity and future capex requirements may pressure FCF and leverage.

Investment Implications

Key Takeaways:

• Topline grew 10.3% YoY to ¥364.36bn with operating income up 31.1% YoY, evidencing operating leverage.
• OPM improved to ~4.8% from ~4.0% a year earlier; NPM rose to 2.64%.
• ROE at 7.95% is driven by modest margins, decent asset turnover (1.09x), and moderate leverage (2.77x).
• Liquidity is adequate (current 1.36x; quick ~1.00x) with positive working capital of ¥41.86bn.
• Interest coverage is strong at 23.3x; debt-to-equity ~1.69x indicates manageable solvency.
• Cash flow and depreciation are undisclosed; validation of cash conversion and capex needs is pending.
• Dividend information is undisclosed; payout sustainability cannot be judged from this dataset.

Metrics to Watch:

• Operating margin and gross margin trajectory.
• OCF/Net income and Free cash flow once disclosed.
• Capex and depreciation (to gauge capital intensity and maintenance vs growth spend).
• Inventory and receivables turns; working capital changes.
• Debt/EBITDA and net debt once D&A and cash are reported.
• Interest coverage trend amid rate environment.
• Contract wins/renewals and warehouse utilization rates.

Relative Positioning: Profitability appears in line with domestic logistics/3PL averages with improving margins; leverage is moderate and manageable, positioning the company competitively but below asset-light leaders on margin profile.

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