Izu Shaboten Resort Co.,Ltd FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥2.84B
• Operating Income: ¥616M
• Net Income: ¥418M
• EPS: ¥23.88

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

Izu Shaboten Resort Co., Ltd. (Consolidated, JGAAP) delivered steady topline growth in FY2026 Q2 with revenue of ¥2,839m, up 3.3% YoY, indicating resilient demand across its leisure assets. Gross profit of ¥2,189.8m reflects a high gross margin of 77.1%, consistent with an experience-driven business model with relatively low cost of sales. Despite the solid gross margin, operating income declined 3.8% YoY to ¥616m, suggesting SG&A cost pressure and moderating operating leverage. Ordinary income rose to ¥642m, implying net non-operating gains of roughly ¥26m and cushioning the operating softness. Net income increased 5.7% YoY to ¥441m, and net margin improved to 15.5%, helped by non-operating factors and possibly a favorable extraordinary/tax mix. Cash conversion was strong: operating cash flow (OCF) reached ¥705.2m, running at 1.60x net income, signaling high earnings quality supported by non-cash charges and/or working capital discipline. EBITDA stood at ¥808.8m (28.5% margin), underpinned by ¥192.8m of depreciation and amortization, providing an ample cash earnings base to fund maintenance needs. Financial risk appears low with interest expense of only ¥3.6m and an interest coverage ratio of about 170x, pointing to minimal debt burden. The balance sheet is robust: total assets are ¥7,375m and total equity is ¥5,991m, implying an equity ratio around 81% and financial leverage (A/E) of 1.23, although the reported equity ratio field is unpopulated. Liquidity looks comfortable with current assets of ¥2,485m and current liabilities of ¥778m, resulting in a current ratio of 319% and working capital of ¥1,707m. Reported inventories are unpopulated, so quick and current ratios coincide; actual quick liquidity may be somewhat lower if inventories exist. Investing cash flow and cash balances are not disclosed in this dataset, which limits visibility on free cash flow and balance-sheet liquidity mix. Dividend information is also unreported; DPS and payout show as zero, so distribution policy remains unclear from these figures. DuPont analysis indicates a calculated ROE of 7.36%, driven by a healthy net margin (15.5%), modest asset turnover (0.385x), and low leverage (1.23x). The combination of high margins, modest growth, and conservative leverage suggests a stable but not highly geared return profile. Overall, fundamentals point to a well-capitalized leisure asset operator with strong cash conversion and limited financial risk, though near-term operating leverage is softening and disclosure gaps (capex, cash, inventories, dividends) temper the completeness of the assessment.

Profitability Analysis

ROE_decomposition: ROE 7.36% = Net margin 15.53% × Asset turnover 0.385 × Financial leverage 1.23. The return profile is margin-led rather than efficiency- or leverage-driven. margin_quality: Gross margin 77.1% and EBITDA margin 28.5% indicate strong unit economics typical of admission/experience-driven revenues. Operating margin is approximately 21.7% (¥616m/¥2,839m), but declined YoY alongside operating profit (-3.8%), pointing to SG&A inflation (e.g., labor, utilities, maintenance). Net margin at 15.5% is supported by low interest burden and non-operating gains. operating_leverage: Revenue grew 3.3% while operating income fell 3.8%, indicating negative operating leverage in the period. Fixed cost creep and/or higher promotional/maintenance spend likely outweighed modest revenue growth. Sustaining pricing power and attendance growth will be key to re-expand operating margin.

Growth Assessment

revenue_sustainability: Topline growth of 3.3% YoY suggests steady demand. For a regional leisure operator, growth likely reflects a mix of attendance recovery and pricing; visibility on segment or visitor metrics is not provided. profit_quality: Net income +5.7% YoY despite lower operating income points to supportive non-operating/extraordinary/tax items. Adjusted for such items, underlying operating performance softened; sustained cost control will be required to maintain profit growth if revenue growth remains modest. outlook: With high gross margins and minimal interest burden, the company can withstand cost variability; however, operating expense inflation (personnel, energy) may cap near-term margin expansion. Growth will depend on visitor traffic, pricing initiatives, and ancillary monetization. Absent segment data and capex plans, medium-term acceleration is uncertain but near-term stability appears likely.

Financial Health

liquidity: Current assets ¥2,485m vs current liabilities ¥778m yield a current ratio of 319% and working capital of ¥1,707m, indicating strong near-term liquidity. Inventories are unreported, so the true quick ratio may be lower than the reported 319%. solvency: Total liabilities ¥1,510m vs equity ¥5,991m implies low leverage (D/E ~0.25x on a liabilities-to-equity basis) and an equity ratio of roughly 81% (calculated), despite the reported field being unpopulated. Interest coverage ~170x indicates ample debt service capacity. capital_structure: Financial leverage (A/E) of 1.23 shows conservative balance sheet usage. Interest-bearing debt levels are not disclosed separately, but the very low interest expense suggests limited borrowings.

Cash Flow Quality

earnings_quality: OCF of ¥705m at 1.60x net income (¥441m) indicates strong conversion, supported by D&A (¥193m) and likely favorable working capital. This suggests earnings are backed by cash. FCF_analysis: Investing CF is unreported; capex details are unavailable. Consequently, free cash flow cannot be reliably derived from the provided figures. Given EBITDA of ¥809m and low interest burden, recurring FCF potential appears solid, but maintenance and development capex needs are unknown. working_capital: Working capital is sizeable at ¥1,707m. OCF strength implies either stable receivables/payables or some release; precise drivers (AR, AP, inventory) are not disclosed.

Dividend Sustainability

payout_ratio_assessment: EPS is ¥23.88, but DPS is unreported (shown as 0.00). The stated payout ratio of 0.0% likely reflects missing dividend data rather than an explicit zero payout. FCF_coverage: FCF coverage cannot be assessed because investing cash flows and capex are not provided. Cash balance is also unreported. policy_outlook: Given conservative leverage and strong OCF, the balance sheet could support distributions; however, without visibility on capex pipeline and dividend policy disclosure, sustainability and intent cannot be evaluated.

Risk Assessment

Business Risks:

• Demand volatility tied to weather, seasonality, and economic conditions affecting leisure spend
• Geographic concentration in the Izu area, increasing exposure to regional shocks
• Natural disaster risk (typhoons, earthquakes) impacting operations and visitor traffic
• Cost inflation in labor and utilities compressing operating margins
• Aging facility refurbishment needs potentially elevating capex
• Dependence on pricing power and attendance to sustain margins
• Potential variability in inbound tourism trends and transportation access

Financial Risks:

• Limited disclosure on cash balances and capex, obscuring true FCF and liquidity buffers
• Potential future capex funding needs for asset maintenance or upgrades
• Small absolute earnings base increases sensitivity to one-off items
• Exposure to tax and extraordinary items that can swing bottom-line results

Key Concerns:

• Negative operating leverage in the period (opex growth outpacing revenue)
• Unreported investing cash flows and cash balance, limiting FCF assessment
• Dividend policy and capital allocation priorities not disclosed

Investment Implications

Key Takeaways:

• Topline growth of 3.3% YoY with high gross margin (77.1%) indicates resilient demand and strong unit economics
• Operating income decline (-3.8% YoY) signals cost pressure and softer operating leverage
• Net income growth (+5.7% YoY) aided by non-operating/tax effects; underlying operating momentum is more muted
• OCF/NI of 1.60 and EBITDA margin of 28.5% point to robust cash generation capacity
• Balance sheet is conservative (calculated equity ratio ~81%, interest coverage ~170x), reducing financial risk
• Disclosure gaps (capex, investing CF, cash, dividends, inventories) limit visibility on FCF and capital allocation

Metrics to Watch:

• Operating margin trajectory and SG&A ratio
• Attendance/visitor metrics and pricing per visitor
• Energy and personnel cost trends
• Capex and maintenance spending plans (and resulting FCF)
• OCF/Net income conversion and working capital movements
• ROE components (asset turnover and leverage) for efficiency improvements

Relative Positioning: Versus domestic leisure and regional theme-park operators, the company exhibits stronger margins and a more conservative balance sheet, but smaller scale and concentrated geography may constrain growth and amplify operational volatility.

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