| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥596.2B | ¥604.7B | -1.4% |
| Operating Income / Operating Profit | ¥35.8B | ¥41.3B | -13.3% |
| Ordinary Income | ¥39.0B | ¥44.0B | -11.5% |
| Net Income / Net Profit | ¥21.7B | ¥28.7B | -24.5% |
| ROE | 5.4% | 7.4% | - |
For the fiscal year ended March 2026, Revenue was ¥596.2B (YoY -¥8.6B -1.4%), Operating Income was ¥35.8B (YoY -¥5.5B -13.3%), Ordinary Income was ¥39.0B (YoY -¥5.0B -11.5%), and Net Income was ¥21.7B (YoY -¥7.0B -24.5%), representing declines in both revenue and profit. Gross margin improved to 23.0% (YoY +1.1pt), but SG&A ratio rose to 17.0% (+1.7pt), driving Operating Margin down to 6.0% (prior 6.8%). Non-operating income included dividend income ¥2.1B and foreign exchange gains ¥0.3B, while extraordinary items included impairment losses ¥1.4B and negative goodwill gain ¥0.8B. The prior-year gain on sale of investment securities ¥7.2B lapsed, contributing to a large decline in Net Income. By segment, the core Logistics Solutions recorded Revenue -7.5% and Operating Income -8.0% (decline), while Mirai Sosei grew Revenue +17.6% but saw Operating Income -46.6% with deteriorated profitability. Operating Cash Flow was ¥65.7B (YoY +23.9%), generating approximately 3.0x Net Income, and Free Cash Flow was secured at ¥45.0B. Dividend payout ratio was 50.0% with dividend per share maintained at ¥50; total shareholder return after stock split amounted to approximately ¥2.7B in dividends and buybacks. Total assets were ¥695.2B, Net assets ¥403.0B, and Equity Ratio 58.0%, indicating preserved financial soundness. For FY2027 ending March 2027, management forecasts recovery to Revenue ¥650.0B (+9.0%) and Operating Income ¥40.0B (+11.7%).
[Revenue] Revenue was ¥596.2B (YoY -1.4%), a slight decline. By segment, Logistics Solutions ¥349.6B (YoY -7.5%, composition 58.6%) saw lower revenue due to progress delays on major projects. Among large customers, shipments to Amazon Japan were ¥72.5B (prior ¥69.8B) slightly up, while Askul disappeared from ¥76.4B, changing customer composition. Plant was ¥128.0B (YoY +2.5%, composition 21.5%) with stable storage tank maintenance operations. Mirai Sosei was ¥116.2B (YoY +17.6%, composition 19.5%) with growth from new environmental measurement and construction-related projects. By region, domestic was ¥573.5B (prior ¥584.6B) and Southeast Asia ¥22.3B (prior ¥19.2B), domestic down and overseas slightly up. Contract liabilities increased to ¥23.9B (prior ¥14.4B, +¥9.6B), expanding revenue recognition potential in subsequent periods.
[Profitability] Gross profit was ¥136.9B (gross margin 23.0%), down ¥4.5B YoY but with gross margin improvement of +1.1pt. Cost ratio fell to 77.0% from 77.8% a year earlier, aided by price pass-through and better project mix. SG&A was ¥101.1B (SG&A ratio 17.0%), up ¥10.0B from prior ¥91.1B, with SG&A ratio +1.7pt; increases in personnel and headquarters expenses were the main drivers, reversing operating leverage. Operating Income was ¥35.8B (Operating Margin 6.0%), down ¥5.5B from prior ¥41.3B, margin -0.8pt. Non-operating income totaled ¥5.4B (including dividend income ¥2.1B and FX gains ¥0.3B) against non-operating expenses ¥2.2B (interest expense ¥1.8B), yielding Ordinary Income ¥39.0B (Ordinary Income margin 6.5%). Extraordinary gains were ¥1.2B (negative goodwill ¥0.8B, gain on sale of fixed assets ¥0.1B) and extraordinary losses ¥2.8B (impairment loss ¥1.4B, loss on disposal of fixed assets ¥0.7B, valuation loss on investment securities ¥0.7B) for a net -¥1.6B. The prior-year gain on sale of investment securities ¥7.2B lapsed, further depressing Net Income. Pre-tax profit was ¥37.4B and after corporate taxes ¥11.8B (effective tax rate 31.6%), Net Income was ¥21.7B (Net Margin 3.6%). In conclusion, despite gross margin improvement, higher SG&A and lapse of prior-year special gains resulted in lower revenue and profit.
Logistics Solutions posted Revenue ¥349.6B (prior ¥378.0B, -7.5%), Operating Income ¥34.3B (prior ¥37.2B, -8.0%), and margin 9.8% (prior 9.8%). Revenue decline was due to project progress delays for major customers and reduction of certain large contracts (Askul). Margin held steady but profit declined due to increased fixed cost burden from lower sales. Plant posted Revenue ¥128.0B (prior ¥124.9B, +2.5%), Operating Income ¥10.0B (prior ¥9.0B, +11.2%), margin 7.8% (prior 7.2%, +0.6pt). Storage tank maintenance remained robust and improved cost control drove revenue and profit growth. Mirai Sosei posted Revenue ¥116.2B (prior ¥98.8B, +17.6%), Operating Income ¥4.7B (prior ¥8.7B, -46.6%), margin 4.0% (prior 8.8%, -4.8pt). Revenue rose from environmental measurement and construction projects, but low-margin project mix and upfront investment burden sharply reduced margins. Consolidated Operating Income after corporate adjustments was ¥35.8B, with Logistics Solutions accounting for about 70% of company operating profit.
[Profitability] Operating Margin 6.0% (prior 6.8%, -0.8pt), Net Margin 3.6% (prior 4.8%, -1.2pt), ROE 5.4% (prior 7.5%, -2.1pt) — profitability declined across metrics. Gross Margin 23.0% (prior 21.9%, +1.1pt) improved, but SG&A ratio 17.0% (prior 15.1%, +1.7pt) pressured margins. ROE decline mainly driven by contraction in Net Margin; Total Asset Turnover 0.86x (prior 0.90x) slightly decreased. [Cash Quality] Operating Cash Flow (OCF) ¥65.7B is 3.0x Net Income ¥21.7B, with OCF/Revenue ratio 11.0%, indicating strong cash generation. Free Cash Flow ¥45.0B (OCF ¥65.7B - Investing CF ¥20.7B) covers dividends and buybacks totaling approx. ¥2.7B by 1.7x. The accrual ratio ((Net Income - OCF)/Total Assets) is -6.3%, negative, indicating strong cash backing of profits. [Investment Efficiency] Total Asset Turnover 0.86x, Tangible Fixed Asset Turnover 3.0x (Revenue ¥596.2B / Tangible Fixed Assets ¥198.5B). Contract liabilities ¥23.9B represent about 4.0% of Revenue, backlog/Revenue ratio approx. 0.15x. Working capital cycle (CCC) is lengthening: Days Sales Outstanding (DSO) 144 days (Receivables ¥234.7B / Daily Sales ¥1.63B) + Inventory holding 16 days - Accounts Payable 58 days = approx. 102 days. [Financial Soundness] Equity Ratio 58.0% (prior 57.7%, +0.3pt), Current Ratio 205% (Current Assets ¥386.5B / Current Liabilities ¥188.6B), Quick Ratio 204% — liquidity is ample. Interest-bearing debt is short-term borrowings ¥67.3B + long-term borrowings ¥50.3B + bonds ¥11.2B = total ¥128.8B, Net interest-bearing debt ¥57.4B (¥128.8B - cash & equivalents ¥71.4B). Debt/EBITDA 2.7x (¥128.8B / EBITDA ¥47B), Interest Coverage 36.5x (OCF ¥65.7B / interest paid ¥1.8B), indicating sufficient debt-servicing capacity. Pension liabilities ¥9.4B and asset retirement obligations ¥6.7B are limited off-balance liabilities.
OCF was ¥65.7B (prior ¥53.0B, +23.9%), a significant increase. Adding non-cash items to pre-tax profit ¥37.4B: depreciation ¥11.1B, impairment loss ¥1.4B, goodwill amortization ¥0.1B, resulted in OCF subtotal ¥81.4B. Changes in working capital included contract liability increase +¥9.6B (positive contribution), inventory increase -¥1.1B, and decrease in accounts payable -¥1.4B partly offsetting. After corporate tax payments -¥16.1B, OCF was ¥65.7B. Investing CF was -¥20.7B, driven by acquisition of tangible fixed assets -¥23.0B (capex and site expansion) and acquisition of subsidiary shares -¥2.6B. Financing CF was -¥38.8B including short-term borrowings repayment -¥17.2B, long-term borrowings proceeds +¥6.5B, dividends paid -¥22.3B, and share buybacks -¥4.4B. Free Cash Flow was ¥45.0B (OCF ¥65.7B - Investing CF ¥20.7B), adequately covering dividends and buybacks totaling ¥26.7B. Cash and cash equivalents rose from ¥64.5B at the beginning of the period to ¥70.7B at period end, +¥6.2B. Working capital trends show notable increases in advance receipts via contract liabilities, reflecting project-based business characteristics. Inventory totaled ¥66.0B (Finished goods ¥1.4B + Raw materials ¥36.4B + Work-in-progress ¥28.2B) with a high WIP ratio 42.7% dependent on project progress. Receivables ¥234.7B represent 39.4% of Revenue with DSO 144 days — a long collection period but consistent with construction/project industry practice.
Of Ordinary Income ¥39.0B, Operating Income ¥35.8B accounts for 91.8%, indicating core business revenue is the main source. Non-operating income ¥5.4B comprises dividend income ¥2.1B (equivalent to about 27% payout from investment securities ¥7.7B), FX gains ¥0.3B, and equity-method investment gains ¥0.5B, with limited one-off elements. Non-operating expenses ¥2.2B are mainly interest paid ¥1.8B; effective interest rate on interest-bearing debt ¥128.8B is low at 1.4%. Extraordinary items net to -¥1.6B (extraordinary gains ¥1.2B: negative goodwill ¥0.8B, gain on fixed asset sales ¥0.1B; extraordinary losses ¥2.8B: impairment loss ¥1.4B including goodwill ¥0.95B in Logistics Solutions, loss on disposal of fixed assets ¥0.7B, valuation loss on investment securities ¥0.7B), largely temporary. The lapse of prior-year gain on sale of investment securities ¥7.2B contributed to reduction in Net Income. Comprehensive income was ¥34.6B, ¥12.9B above Net Income ¥21.7B, composed of valuation difference on securities ¥7.2B, retirement benefit adjustments ¥1.3B, foreign currency translation adjustment -¥0.3B, deferred hedge ¥0.4B, and OCI of equity-method affiliates ¥0.3B. Increase in valuation difference on securities reflects market value appreciation and suggests accumulation of unrealized gains. The accrual gap (Net Income ¥21.7B - OCF ¥65.7B) is -¥44.0B, a large negative indicating OCF substantially exceeds Net Income — a high-quality earnings profile. Contract liability increase ¥9.6B is advance receipts awaiting future revenue recognition; as cash is received in advance, it supports short-term liquidity. Overall, the quality of ordinary earnings is good, though volatility in Net Income is increased by fluctuations in extraordinary items and lapse of prior-year special gains.
For the fiscal year ending March 2027, management projects Revenue ¥650.0B (YoY +9.0%), Operating Income ¥40.0B (YoY +11.7%), Ordinary Income ¥42.0B (YoY +7.8%), and Net Income ¥27.0B (from prior ¥21.7B, +24.4%). At the Q2 point, progress rates are Revenue 91.7% (¥596.2B/¥650.0B), Operating Income 89.5% (¥35.8B/¥40.0B), Ordinary Income 92.9% (¥39.0B/¥42.0B), generally on track. However, Q2 Revenue was -1.4% YoY slight decline, and achieving full-year +9.0% requires a substantial rebound in H2. Assumptions include normalization of project progress in Logistics Solutions, profitability recovery in Mirai Sosei, and accelerated revenue recognition of contract liabilities ¥23.9B. Operating Margin is forecast at 6.2% (¥40.0B/¥650.0B), targeting a +0.2pt improvement from this fiscal year’s 6.0%. Control of SG&A and maintaining gross margin are key. Ordinary Income ¥42.0B implies non-operating income/expense at similar levels to this fiscal year (~105% of Operating Income). Net Income ¥27.0B corresponds to EPS forecast ¥173.24, and dividend forecast ¥50 (payout ratio 28.9%) is on a post-split basis. Progress on H2 order fulfillment and cost management will determine whether guidance is achieved.
Annual dividend is ¥100 per share (¥100 at interim + ¥53 at year-end, after 1:2 stock split effective January 1, 2026), which equates to an effective post-split annual dividend of ¥103. Dividend payout ratio is 50.0% (dividend ¥100 / EPS ¥164.52, pre-split basis), maintaining a stable dividend policy. Total dividend amount is approx. ¥2.24B, slightly exceeding Net Income ¥21.7B on a total return basis with total return ratio approx. 103% relative to profits. Share buybacks of ¥0.44B were conducted, and combined dividends and buybacks totaled ¥2.68B, representing 59.6% of Free Cash Flow ¥45.0B. Treasury stock at period end was 4.61 million shares (2.9% of issued shares 16,046 thousand shares). While payout ratio 50% is in line with industry average, total return ratio approx. 103% is high on this year’s profit base. Coverage of dividends by OCF is 2.9x, indicating cash sustainability. The FY2027 dividend forecast is ¥50 (post-split basis), implying a payout ratio of 28.9% (¥50 × ~1.604M shares / Net Income forecast ¥27.0B), a projected decline. Continued profit growth and sustained Free Cash Flow generation are prerequisites for maintaining dividends. The stock split lowers investment unit and aims to broaden shareholder base.
Segment concentration risk: Logistics Solutions accounts for 58.6% of Revenue and about 70% of Operating Income, indicating concentrated earnings. Dependence on top two customers (Amazon Japan and previously Askul) is high; delays or loss of large contracts directly affect performance. This fiscal year the Logistics Solutions -7.5% decline was the main cause of company-wide revenue decrease. Contract liabilities ¥23.9B (+66.6%) signal backlog buildup but project execution risk remains. Backlog/Revenue ratio 0.15x provides limited short-term buffer; ongoing order intake is required.
Working capital & project management risk: Long collections with DSO 144 days and CCC approx. 102 days strain liquidity. High WIP ratio 42.7% (WIP ¥28.2B / Inventory ¥66.0B) makes results sensitive to project delays and cost overruns. This fiscal year SG&A ratio +1.7pt led to Operating Margin -0.8pt decline, highlighting fixed cost burden. Mirai Sosei margin 4.0% (prior 8.8%, -4.8pt) reflects low-margin project mix, indicating needs for project selection and cost control. Short-term borrowings ¥67.3B (23.0% of total liabilities) create elevated short-term funding dependence and refinancing risk if projects are delayed.
Financial & interest rate risk: Interest-bearing debt ¥128.8B with interest paid ¥1.8B (effective rate 1.4%) is currently low, but Debt/EBITDA 2.7x implies higher funding costs could increase interest burden in a rising-rate environment. Short-term borrowings ratio 52.2% (¥67.3B / ¥128.8B) skews maturity profile to the short-term, raising liquidity risk if refinancing conditions worsen. Pension liability ¥9.4B (+106% from prior ¥4.6B) has increased and may raise future contribution requirements due to actuarial/interest changes. Investment securities ¥77.0B affect equity through valuation differences; while this period saw valuation gains +¥7.2B, market volatility risk remains.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 6.0% | 7.8% (4.6%–12.3%) | -1.7pt |
| Net Margin | 3.6% | 5.2% (2.3%–8.2%) | -1.5pt |
Both Operating and Net Margins are below industry medians, placing profitability in the mid-to-lower range among manufacturers. High SG&A ratio 17.0% is the main margin headwind.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | -1.4% | 3.7% (-0.4%–9.3%) | -5.1pt |
Revenue growth lags industry median by -5.1pt, trailing manufacturing sector trends. Delays in Logistics Solutions project delivery are the main factor; next year’s target +9.0% growth is a key inflection point for assessment.
※ Source: Company compilation
Normalization of project execution in the core segment is a precondition for next-year profit growth: Logistics Solutions posted Revenue -7.5% and Operating Income -8.0%, but contract liabilities ¥23.9B (+66.6%) suggest backlog accumulation. FY2027 plan of Revenue +9.0% and Operating Income +11.7% depends on accelerated H2 project execution and SG&A ratio control (targeting 16% range from 17.0%). Stable earnings from Plant (margin 7.8%) and margin recovery in Mirai Sosei (target from 4.0% to above 6%) would contribute to overall margin improvement.
Strong cash generation and financial flexibility support dividends and growth investment: OCF ¥65.7B is 3.0x Net Income, Free Cash Flow ¥45.0B covers dividends and buybacks totaling ¥2.68B by 1.7x, indicating ample capacity. Equity Ratio 58.0%, Debt/EBITDA 2.7x, and Interest Coverage 36.5x demonstrate robust financial health and leave room for capex and M&A. Maintaining 50% payout and the stock split to lower investment unit clarifies shareholder return stance. There is upside to cash generation if working capital efficiency (CCC 102 days, DSO 144 days) improves.
Progress on profitability improvement is key to valuation re-rating: Operating Margin 6.0% trails industry median 7.8% by -1.7pt, placing the company mid-to-low among manufacturers. While gross margin 23.0% shows improvement and cost management progress, urgent SG&A reduction (17.0%, +1.7pt) is needed. Achieving next-year Operating Margin target 6.2% requires reviewing low-margin projects in Mirai Sosei and optimizing headquarters expenses. ROE recovery from 5.4% (prior 7.5%) will depend on Net Margin improvement and raising Total Asset Turnover 0.86x through backlog digestion and CCC shortening; mid-term target around 8% ROE would be a valuation milestone.
This report was automatically generated by AI analyzing XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are compiled by the Company based on public financial statements and are for reference only. Investment decisions are your responsibility; consult professionals as needed.