| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥2022.8B | ¥1933.9B | +4.6% |
| Operating Income / Operating Profit | ¥172.9B | ¥157.8B | +9.6% |
| Ordinary Income | ¥157.3B | ¥139.2B | +13.0% |
| Net Income / Net Profit | ¥296.6B | ¥49.8B | +495.4% |
| ROE | 26.8% | 5.1% | - |
For the cumulative results through FY2026 Q2, Revenue was ¥2,022.8B (YoY +¥88.8B, +4.6%), Operating Income was ¥172.9B (YoY +¥15.2B, +9.6%), Ordinary Income was ¥157.3B (YoY +¥18.1B, +13.0%), and Net Income was ¥296.6B (YoY +¥246.8B, +495.4%), representing growth in both top and bottom lines. The sharp increase in Net Income was driven by the recognition of deferred tax assets of ¥403.9B, producing an effective tax rate of -553%, a one-off factor. Operationally, Domestic Parking Business (Revenue ¥1,051.5B +9.1%, Operating Income ¥180.6B +4.3%) led performance, while the Mobility Business (Revenue ¥666.9B +11.7%, Operating Income ¥59.2B +1.8%) also performed solidly. Overseas Parking Business saw Revenue decline to ¥338.9B (-17.0%) due to a change in consolidation scope, but improved to Operating Income ¥2.2B (turning from a loss of -¥9.8B prior year, +122.8%). Operating margin improved to 8.6% (up 0.4pt from 8.2% prior year), and Net Margin expanded to 14.7% (up 12.1pt from 2.6%). Progress vs. full-year guidance is standard for Revenue 49.2%, Operating Income 40.7%, Ordinary Income 39.8%, while Net Income is front-loaded at 67.4% due to tax effects.
[Revenue] Revenue ¥2,022.8B (YoY +4.6%) consists of contract-derived revenue across segments ¥1,924.1B (prior ¥1,839.4B +4.6%) and lease and other income ¥98.6B (prior ¥94.6B +4.2%). Domestic Parking grew to ¥1,051.5B (+9.1%) driven by utilization improvement and pricing effects; Mobility grew to ¥666.9B (+11.7%) reflecting capacity expansion and higher utilization. Overseas Parking declined to ¥338.9B (-17.0%) due to deconsolidation of MEIF II CP Holdings 2 Limited and TIMES24 SINGAPORE PTE. LTD. Segment mix shifted domestically: Domestic Parking 52.0%, Mobility 33.0%, Overseas Parking 16.8% (prior 48.1%, 30.8%, 21.1%). External environment tailwinds included inbound demand recovery and normalization of mobility demand.
[Profitability] Gross profit was ¥516.5B (gross margin 25.5%, +0.6pt from 24.9% prior year), SG&A ¥343.5B (SG&A ratio 17.0%, +0.3pt from 16.7%), yielding Operating Income ¥172.9B (Operating margin 8.6%, +0.4pt). Non-operating interest expense was ¥16.2B (prior ¥17.1B), slightly lower. Non-operating income ¥4.7B and non-operating expenses ¥20.4B produced Ordinary Income ¥157.3B (Ordinary margin 7.8%, +0.6pt). Special losses of ¥121.0B (subsidiary liquidation loss ¥87.2B, loss on sale of subsidiary shares ¥33.0B, etc.) left profit before tax at ¥45.4B, but the recording of income taxes of -¥251.2B (breakdown: tax adjustments -¥310.9B, tax payments ¥59.7B) resulted in Net Income of ¥296.6B. Overall, revenue and profit trend remained positive.
Domestic Parking Business: Revenue ¥1,051.5B (prior ¥963.9B +9.1%), Operating Income ¥180.6B (prior ¥173.2B +4.3%), Operating margin 17.2% (down 0.8pt from 18.0%). The slight margin decline likely reflects accumulation of fixed costs, but the business sustains a stable earnings base. Mobility Business: Revenue ¥666.9B (prior ¥597.0B +11.7%), Operating Income ¥59.2B (prior ¥58.1B +1.8%), Operating margin 8.9% (down 0.8pt from 9.7%). Increases in vehicle costs and insurance/maintenance expenses pressured margins, but absolute profit increased. Overseas Parking Business: Revenue ¥338.9B (prior ¥408.2B -17.0%), Operating Income ¥2.2B (prior -¥9.8B, turned to profit +122.8%), Operating margin 0.7% (improved 3.1pt from -2.4%). Including goodwill amortization of ¥6.0B (prior ¥7.2B), the segment returned to profitability. Corporate/Eliminations (corporate expense) amounted to -¥69.1B (prior -¥63.7B), yielding consolidated Operating Income ¥172.9B.
[Profitability] Operating margin 8.6% (up 0.4pt from 8.2%), gross margin 25.5% (up 0.6pt). ROE 26.8% (Net Margin 14.7% × Total Asset Turnover 0.588 × Financial Leverage 3.11) is high but materially influenced by one-off tax effects. EBITDA ¥360.5B (Operating Income ¥172.9B + Depreciation ¥187.5B), EBITDA margin 17.8%—strong for an asset-intensive business. Pre-goodwill-amortization EBITDA was ¥366.5B, with JGAAP impact minimal (1.6%). [Cash Quality] Operating CF / Net Income 0.99x, OCF/EBITDA 0.81x indicate somewhat weaker cash conversion due to interest/tax payments and working capital effects. Accrual ratio 0.1% (=(Net Income - Operating CF)/Total Assets) suggests high cash quality. [Investment Efficiency] Total Asset Turnover 0.588x (annualized 1.18x), Capex/Depreciation 1.47x indicating an investment expansion phase. [Financial Soundness] Equity Ratio 32.1% (up 4.4pt from 27.7%), D/E 2.11x (Net Interest-Bearing Debt ¥723.1B / Equity ¥1,106.3B), Debt/EBITDA 1.83x (based on annualized EBITDA ¥721B), Interest Coverage 10.7x (EBITDA / Interest Paid), Current Ratio 82.5% indicating tight short-term liquidity, and negative working capital ¥-202.6B requiring attention for maturity mismatch.
Operating CF was ¥293.7B (YoY +2.0%), roughly 0.99x of Net Income ¥296.6B. Operating CF subtotal including Depreciation ¥187.5B amounted to ¥401.8B, from which working capital changes and corporate tax payments of ¥86.7B led to cash generation. Working capital contributed positively via decreases in trade receivables ¥8.2B and inventories ¥17.9B; trade payables increased marginally ¥0.1B. Investing CF was -¥334.8B, driven by capital expenditures -¥274.9B (capacity expansion for Domestic Parking and Mobility) and intangible asset acquisitions -¥24.3B; proceeds from fixed asset disposals ¥15.4B partially offset outflows. Financing CF was -¥462.7B, with repayment of long-term borrowings -¥540.6B and changes in subsidiary ownership due to loss of control -¥292.8B as major outflows; these were offset by short-term borrowings net increase ¥133.1B and long-term borrowings raised ¥350.0B, and dividend payments -¥51.1B. Free Cash Flow (Operating CF + Investing CF) was -¥41.1B, and cash & deposits fell substantially from ¥804.7B at prior fiscal year-end to ¥303.9B (-¥500.8B). The cash decline was mainly due to long-term borrowing repayments and capital transactions related to consolidation changes, reflecting allocation of funds toward growth investment and de-leveraging. OCF/EBITDA 0.81x remains somewhat low, and interest paid ¥22.0B, tax paid ¥86.7B, and working capital movements still leave room to improve cash conversion.
Operating Income ¥172.9B is at the core of recurring earnings; non-operating income ¥4.7B (foreign exchange gains ¥1.0B, insurance income ¥1.0B, etc.) is minor at 0.2% of Revenue. Major non-operating expense was interest expense ¥16.2B, so financial costs persist. Relative to Ordinary Income ¥157.3B, special losses ¥121.0B (subsidiary liquidation loss ¥87.2B, loss on sale of subsidiary shares ¥33.0B—one-off items) and special gains ¥9.1B (gain on disposal of fixed assets ¥8.8B) left profit before tax at ¥45.4B. Income taxes -¥251.2B were driven by recognition of deferred tax assets, resulting in an effective tax rate of -553%; therefore, operating income and EBITDA should be emphasized when assessing sustainable earning power. Operating CF ¥293.7B supports Net Income (0.99x), and OCF/EBITDA 0.81x provides some cash backing, though interest and tax payments prevent full cash conversion. Comprehensive Income ¥374.9B (Net Income ¥296.6B + Other Comprehensive Income ¥78.3B) benefitted from positive foreign currency translation adjustments ¥78.9B, reflecting yen weakness in overseas operations. Accrual ratio 0.1% indicates good cash realization of earnings; recurring earnings quality is high, but one-off items are significant.
Full-year forecasts: Revenue ¥4,110.0B (YoY +1.2%), Operating Income ¥425.0B (+13.1%), Ordinary Income ¥395.0B (+15.6%), Net Income ¥440.0B (note: comparison with prior year +495.4% requires review of assumptions). Progress after H1: Revenue 49.2%, Operating Income 40.7%, Ordinary Income 39.8%, Net Income 67.4%. Progress for Operating/Ordinary Income is about 10pts below a 50% midpoint but management expects recovery in H2 due to seasonality and contributions from new locations. The front-loaded Net Income progress is due to one-off deferred tax recognition and is expected to normalize in H2. Guidance was revised this quarter, likely reflecting consolidation scope changes and tax effect incorporation. Full-year EPS forecast ¥257.76 vs. H1 EPS ¥173.75 (progress 67.4%). Dividend forecast ¥65 with no interim dividend; full amount to be paid at year-end.
Interim dividend: ¥0. Full-year dividend forecast ¥65, planned as a year-end-only payout. Total annual dividends are approximately ¥11.1B (calculated from shares outstanding 171,048K less treasury shares 317K). Dividend payout ratio relative to full-year Net Income forecast ¥440B is about 25%, a conservative level. Prior year payout ratio data is unavailable, but the company maintains a balanced dividend policy despite H1 Net Income ¥296.6B being materially affected by one-off tax effects. Free Cash Flow was -¥4.11B in H1, but given annual Operating CF and Debt/EBITDA 1.83x leverage and cash balance ¥303.9B, dividend sustainability appears maintained. With no share buyback disclosed, Total Return Ratio cannot be evaluated; shareholder returns should be judged on payout ratio alone. Rising interest rates and increased reliance on short-term debt create volatility risk for future dividend capacity—monitor H2 cash generation and investment plan execution.
Short-term liquidity risk: Current Ratio 82.5%, working capital ¥-202.6B with current liabilities ¥1,155.2B exceeding current assets ¥952.7B. Short-term borrowings ¥157.1B and long-term borrowings maturing within one year ¥333.5B plus current portion of lease liabilities ¥100.1B total ¥590.7B, covered by cash & deposits ¥303.9B and Operating CF (half-year) ¥293.7B to some extent, but cash fell ¥-500.8B YoY, reducing buffers. Managing maturity mismatch and securing refinancing terms are critical.
Leverage and interest burden risk: D/E 2.11x is high, with total interest-bearing debt ¥1,027.0B (short-term borrowings ¥157.1B + long-term borrowings ¥504.0B + long-term borrowings due within one year ¥333.5B + lease liabilities ¥302.8B). Interest expense was ¥16.2B (half-year), implying an interest burden rate ~3.2%. Debt/EBITDA 1.83x and Interest Coverage 10.7x indicate investment-grade debt capacity, but rising rates could increase interest payments and pressure Ordinary Income. Repayment of long-term borrowings has raised the share of short-term debt, and changes in rollover terms could affect liquidity.
Earnings volatility from one-off items: H1 Net Income ¥296.6B was largely influenced by deferred tax asset recognition producing an effective tax rate of -553%, limiting sustainability. Net Income is expected to be adjusted as the effective tax rate normalizes in H2. Special losses ¥121.0B related to consolidation scope changes pressured profit before tax; goodwill decreased by ¥-96.0B reducing future impairment risk, but earnings volatility may persist until restructuring completes. For assessing recurring earning power, emphasize Operating Income and EBITDA and avoid overreacting to Net Income swings.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 8.6% | – | – |
| Net Margin | 14.7% | – | – |
Industry median data unavailable, making quantitative relative positioning difficult, but the company’s Operating Margin 8.6% is estimated to be standard for asset-intensive parking & mobility businesses.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 4.6% | – | – |
Revenue growth of 4.6% reflects solid expansion in Domestic Parking and Mobility demand recovery; relative positioning within the industry is pending given lack of median data.
※ Source: Company compilation
Separate stable operational growth from one-off tax effects: Operating margin 8.6% (up 0.4pt) and EBITDA margin 17.8% show steady recurring earning power with continued growth in Domestic Parking and Mobility. However, Net Income ¥296.6B (+495.4%) is largely due to one-off deferred tax asset recognition of ¥403.9B producing an effective tax rate of -553%, so Net Income is expected to normalize in H2. FY progress is Revenue 49.2%, Operating Income 40.7%, Ordinary Income 39.8%—Net Income’s 67.4% front-loading is tax-driven. Investment decisions should prioritize Operating Income and EBITDA and avoid overreacting to Net Income volatility.
Monitor tightening short-term liquidity and leverage management: Current Ratio 82.5% and working capital ¥-202.6B are cautionary. Cash fell ¥-500.8B YoY to ¥303.9B, mainly due to long-term borrowing repayments -¥540.6B and capital transactions -¥292.8B related to consolidation changes, while capex ¥274.9B pressured cash. Despite high D/E 2.11x, Debt/EBITDA 1.83x and Interest Coverage 10.7x keep debt capacity in investment-grade territory. With short-term borrowings up ¥133.1B and rising short-term debt reliance, securing refinancing terms and H2 cash generation (stable Operating CF and smoothing of investments) are focal points.
Domestic Parking high profitability and Overseas recovery strengthen mid-term earnings base: Domestic Parking (Operating margin 17.2%, Operating Income ¥180.6B) is the core profit driver with utilization and pricing support; Mobility (Operating margin 8.9%, Operating Income ¥59.2B) also delivered revenue and profit growth. Overseas Parking, despite Revenue -17.0% from consolidation scope changes, returned to profit Operating Income ¥2.2B from prior -¥9.8B, indicating stabilization; goodwill decreased by ¥-96.0B reducing future impairment risk. Payout ratio 25% is conservative and dividend sustainability is high, though rising interest expense risk remains manageable currently. Key monitoring items: pace of new Domestic Parking project wins, Mobility utilization and vehicle cost trends, overseas FX & regulatory risk, rollover terms for short-term liabilities, and tax-effect reversals.
This report was automatically generated by AI analyzing XBRL financial statements. It is not a recommendation to invest in any specific security. Industry benchmarks are company-compiled reference information based on publicly available financial statements. Investment decisions are your responsibility; please consult a professional advisor as needed.