Tokyu Fudosan Holdings Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥591.27B
• Operating Income: ¥78.52B
• Net Income: ¥25.56B
• EPS: ¥72.92

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

Tokyu Fudosan Holdings posted a strong FY2026 Q2 performance with clear margin expansion and improved earnings momentum. Revenue rose 17.5% year over year to ¥591.3bn, while operating income increased 55.3% to ¥78.5bn, demonstrating significant operating leverage. Net income more than doubled to ¥52.2bn (+108.1% YoY), lifting the net margin to 8.82%. Operating margin reached 13.3%, up materially from the prior-year level implied by the growth differentials. EBITDA of ¥103.5bn resulted in a solid 17.5% EBITDA margin, aided by ¥25.0bn in depreciation and amortization. Ordinary income of ¥69.6bn was below operating income, indicating net non-operating costs (including interest expense of ¥6.4bn) modestly weighed on profits. Based on reported income tax of ¥19.2bn and ordinary income, the implied effective tax rate is roughly 27–28%, even though a headline “0.0%” tax rate is shown in the summary metrics (the latter should be treated as undisclosed). Balance sheet scale remains large at ¥3.34tn in assets, with equity of ¥869.9bn and implied financial leverage of 3.84x (Assets/Equity). Liquidity appears ample with current assets of ¥1.38tn vs. current liabilities of ¥621.5bn (current ratio ~222%), driving working capital of ¥760.4bn. Operating cash flow was negative at ¥-34.4bn despite positive earnings, consistent with working capital build typical in real estate development cycles; investing cash flow was not disclosed in this dataset. The DuPont decomposition yields a reported ROE of 6.0% for the period, driven by an 8.82% net margin, 0.177x asset turnover, and 3.84x financial leverage. Annualizing this mid-year ROE would imply a double-digit run-rate, but seasonality and project completions can cause significant swings in the real estate sector. The interest coverage ratio of 12.3x (operating income/interest expense) indicates currently comfortable debt service capacity. The reported equity ratio of 0.0% is clearly an undisclosed placeholder; the implied equity ratio from the balance sheet (Equity/Assets) is about 26%. Dividend figures show 0 for DPS and payout, which should be treated as undisclosed rather than true zero; hence no inference can be made about the distribution policy from this dataset. Overall, profitability metrics strengthened, leverage is typical for a developer, liquidity is solid, but cash flow quality shows the usual lumpiness. Data gaps (notably gross profit, inventories, investing cash flows, cash balance, and share data) limit deeper granularity, so conclusions should be read with these constraints in mind.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 8.82% (NI ¥52.2bn / Revenue ¥591.3bn)
• asset_turnover: 0.177x (Revenue ¥591.3bn / Assets ¥3.34tn)
• financial_leverage: 3.84x (Assets ¥3.34tn / Equity ¥869.9bn)
• calculated_ROE: 6.0% for the period; annualized implication would be higher but subject to seasonality margin_quality: Operating margin improved to 13.3% (¥78.5bn / ¥591.3bn) with EBITDA margin at 17.5%. Ordinary income (¥69.6bn) below operating income indicates net non-operating costs; interest expense was ¥6.4bn and other non-operating items likely negative. Effective tax burden implied ~27–28% (¥19.2bn tax on ~¥69.6bn pre-tax), despite the placeholder 0.0% shown. operating_leverage: Revenue grew +17.5% YoY while operating income grew +55.3% YoY. Implied prior-year revenue ~¥503.6bn and operating income ~¥50.6bn; incremental operating margin ≈ (¥27.9bn/¥87.7bn) ≈ 31.9%, evidencing strong operating leverage likely from mix and scale benefits.

Growth Assessment

revenue_sustainability: Top-line growth of +17.5% is robust for a diversified real estate group, likely underpinned by development handovers, leasing/rent revisions, and hospitality recovery. However, real estate revenue is inherently project- and timing-driven; sustainability depends on contracted backlog and pipeline. profit_quality: Net income growth (+108.1% YoY) outpaced revenue, driven by margin expansion and operating leverage. Ordinary income below operating income indicates financing and other costs are still meaningful but manageable. Without gross profit disclosure, mix analysis (e.g., property sales vs. leasing) is limited. outlook: If H2 maintains similar activity, full-year profitability should exceed the prior year. That said, deliveries and asset recycling can be back-half weighted, and seasonality plus interest rate dynamics could affect ordinary income. Watch for sustained occupancy/rent growth and handover schedules.

Financial Health

liquidity: Current assets ¥1.38tn vs. current liabilities ¥621.5bn yields a current and quick ratio of ~222%. Quick ratio is likely overstated because inventories were undisclosed (reported as 0); developers typically carry large inventories/real estate for sale. solvency: Implied equity ratio ~26.0% (¥869.9bn/¥3.34tn). Debt-to-equity is reported as 2.78x (interest-bearing debt details not disclosed here). Interest coverage is healthy at 12.3x, suggesting adequate buffer against rate increases. capital_structure: Financial leverage at 3.84x aligns with sector norms. Ordinary income being below operating income reflects the drag from financing costs; careful monitoring of net debt, average borrowing costs, and maturity profile is warranted (not disclosed in the dataset).

Cash Flow Quality

earnings_quality: OCF/Net Income ratio is -0.66, indicating earnings are not converting to operating cash flow this period. This is typical in development-heavy periods with working capital absorption and timing mismatches between recognition and cash collections. FCF_analysis: Investing cash flows are undisclosed and cash balance is undisclosed; hence Free Cash Flow cannot be reliably derived, despite a placeholder of 0. The lack of capex/investment detail limits assessment of discretionary vs. maintenance spending. working_capital: Negative OCF likely reflects build-up in receivables or real estate for sale and/or reduced advances received. With inventories undisclosed, precise attribution is not possible, but the magnitude (¥-34.4bn) is manageable relative to EBITDA (¥103.5bn).

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are shown as 0.00 but should be treated as undisclosed. With EPS at ¥72.92 for H1, the capacity to pay dividends depends on full-year earnings and cash flow generation. FCF_coverage: Not assessable due to undisclosed investing cash flows and cash balance; OCF was negative in H1, which would weaken near-term coverage if sustained, but seasonality could reverse in H2. policy_outlook: Without explicit disclosure, inferencing policy is not appropriate. Historically, developers balance dividends with funding needs for pipeline and asset recycling; clarity would require management guidance.

Risk Assessment

Business Risks:

• Project timing risk in development handovers affecting revenue and earnings recognition
• Leasing risk from occupancy and rent reversion, especially in office and retail
• Hospitality and resort cyclicality impacting RevPAR and margins
• Cost inflation in construction and materials compressing development margins
• Asset valuation and cap-rate movement affecting gains/losses on sales or revaluations
• Regulatory and zoning changes impacting project pipeline
• Natural disaster risk in Japan (earthquake/typhoon) affecting assets and operations
• ESG and decarbonization requirements potentially increasing capex

Financial Risks:

• Interest rate and refinancing risk amid potential BOJ policy normalization
• Working capital strain from large inventories/receivables during build phases
• Leverage typical of the sector could amplify earnings volatility
• Liquidity risk if market conditions slow asset disposals or condo sales
• Counterparty risk with tenants, buyers, and JV partners

Key Concerns:

• Negative operating cash flow versus strong accounting profits in H1
• Ordinary income below operating income highlighting sensitivity to financing costs
• Data gaps (inventories, investing CF, cash balance) limiting visibility on FCF and net debt

Investment Implications

Key Takeaways:

• Strong H1 topline (+17.5% YoY) and operating income (+55.3% YoY) with notable operating leverage
• Net income +108.1% YoY; net margin at 8.82% and operating margin at 13.3%
• ROE of 6.0% for H1 driven by improved margins and stable leverage; potential double-digit annualized if sustained
• Interest coverage at 12.3x indicates manageable debt service; implied equity ratio ~26%
• OCF negative (¥-34.4bn), consistent with real estate working capital dynamics; FCF not derivable from disclosed data
• Liquidity appears strong (current ratio ~222%), though true quick liquidity is uncertain due to undisclosed inventories

Metrics to Watch:

• Backlog/contracted sales and scheduled handovers for H2
• Leasing occupancy and rent reversion by asset class
• Inventories/real estate for sale and advances received (once disclosed)
• Net debt, average borrowing cost, and debt maturity ladder
• OCF trajectory and working capital movements
• Segment-level margins and gains on asset sales
• ROE progression via DuPont drivers (margin, turnover, leverage)
• Interest coverage and sensitivity to rate increases

Relative Positioning: Within Japan’s listed developer landscape, Tokyu Fudosan exhibits solid mid-cycle profitability with leverage in line with peers and meaningful operating leverage this half. Scale is smaller than the mega-cap landlords but diversified across development, leasing, and hospitality, which can add both resilience and earnings volatility depending on project timing.

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