Mitsubishi Logisnext Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥317.74B
• Operating Income: ¥8.04B
• Net Income: ¥9.98B
• EPS: ¥-6.66

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

Mitsubishi Logisnext (7105) reported FY2026 Q2 consolidated results under JGAAP showing top-line resilience but sharp profit compression. Revenue was ¥317.7bn, down 3.3% YoY, indicating modest demand softness in materials handling equipment and related solutions. Gross profit was ¥84.9bn, implying a gross margin of 26.7%, which is reasonable for the sector but suggests limited pricing power versus input costs. Operating income declined 48.0% YoY to ¥8.0bn, producing an operating margin of 2.5% and highlighting significant operating leverage and elevated fixed-cost absorption. Ordinary income fell to ¥5.0bn, evidencing a substantial non-operating drag, largely from interest expense of ¥3.7bn and possibly other non-operating items. The bottom line was a net loss of ¥0.71bn, implying a net margin of -0.22%; the YoY change suggests the net loss narrowed versus the prior-year period, but the company remains loss-making. The DuPont bridge shows a negative ROE of -0.58%, driven by a slim negative margin (-0.22%), modest asset turnover (0.628x), and high financial leverage (4.15x). Equity stood at ¥121.9bn versus total assets of ¥506.0bn, implying an equity ratio of roughly 24% (the reported 0.0% equity ratio appears undisclosed rather than truly zero). Liquidity appears adequate with a current ratio of 147% and a quick ratio of 106%, supported by working capital of ¥91.3bn. Inventories were ¥80.6bn (about 28% of current assets and 25% of half-year sales), which warrants monitoring for turnover risk in a slowing demand environment. Interest coverage is thin at 2.2x on an operating basis, reflecting balance-sheet pressure amid higher rates and borrowing needs. Tax expense of ¥5.9bn alongside a net loss suggests heavy tax and/or below-the-line charges and non-operating impacts; full reconciliation to pre-tax income is not disclosed. Cash flow details, depreciation and amortization, and cash balances are not reported, limiting assessment of earnings-to-cash conversion and capital intensity. No dividend is indicated for the period (DPS 0), and payout metrics are not meaningful without cash flow data. Overall, results point to cyclical and cost pressures compressing profitability, with leverage amplifying ROE volatility; stabilization depends on recovering margins, controlling SG&A, and maintaining liquidity.

Profitability Analysis

ROE_decomposition: ROE is -0.58% via DuPont: Net Profit Margin -0.22% × Asset Turnover 0.628 × Financial Leverage 4.15. The negative margin is the primary driver of negative ROE, while leverage magnifies the impact. margin_quality: Gross margin is 26.7% (¥84.9bn on ¥317.7bn sales), broadly in line with a mix of new trucks, services, and parts. Operating margin compressed to 2.5% (¥8.0bn), implying elevated SG&A and/or adverse mix; implied SG&A is ~¥76.8bn (24.2% of sales). Ordinary margin is 1.6% (¥5.0bn), reflecting significant non-operating costs including ¥3.7bn interest. operating_leverage: A 3.3% revenue decline translated into a 48% drop in operating income, indicating high operating leverage and fixed-cost burden. This suggests sensitivity of earnings to volume/mix and cost inflation, with price-cost spread still tight.

Growth Assessment

revenue_sustainability: Revenue at ¥317.7bn (-3.3% YoY) indicates softening demand, likely from moderating capex and replacement cycles in logistics and manufacturing customers. The topline remains sizable, suggesting a stable installed base and services contribution. profit_quality: Operating profit deterioration far outpaced revenue decline, indicating mix pressure and insufficient cost pass-through. Ordinary income was further reduced by interest expense. Net loss of ¥0.7bn reflects tax and below-the-line impacts; underlying profitability depends on restoring operating margin above ~3–4%. outlook: Short-term recovery hinges on cost control, pricing discipline, and stabilizing input costs. Inventory normalization and service/aftermarket strength could support margins. However, macro uncertainty and rates-driven financing costs are likely to keep earnings volatility elevated.

Financial Health

liquidity: Current ratio 147.2% and quick ratio 105.5% indicate adequate short-term liquidity. Working capital stands at ¥91.3bn, providing a buffer. solvency: Debt-to-equity (using total liabilities as a proxy) is 3.18x, indicating a leveraged balance sheet; interest coverage at 2.2x (operating income/interest expense) is thin and sensitive to further margin compression. capital_structure: Total assets ¥506.0bn vs equity ¥121.9bn implies financial leverage of 4.15x and an equity ratio of ~24%. The structure relies heavily on liabilities, increasing earnings volatility and exposure to interest rate conditions.

Cash Flow Quality

earnings_quality: Cash flow statements are not disclosed in this dataset; therefore, OCF/Net Income and FCF metrics shown as zero should be treated as unavailable, not actual values. Earnings quality cannot be validated against cash generation for the period. FCF_analysis: Free cash flow is undisclosed. Capex and D&A are not reported, limiting assessment of capital intensity and maintenance vs. growth investments. working_capital: Inventories of ¥80.6bn (~28% of current assets; ~25% of half-year sales) indicate meaningful capital tied in stock; without turnover data, the risk of working-capital drag remains. Receivables/payables details are not provided, constraining cash conversion analysis.

Dividend Sustainability

payout_ratio_assessment: Annual DPS is indicated as ¥0.00 for the period; payout ratio is shown as 0% due to non-payment and negative earnings. With negative net income, a sustainable payout would require positive FCF, which is undisclosed. FCF_coverage: FCF coverage cannot be assessed because OCF and capex are not reported. The placeholders at 0.00x should not be interpreted as actual coverage. policy_outlook: Given a net loss, thin coverage metrics, and leverage, a conservative dividend stance appears likely until profitability and cash generation normalize. Formal policy details are not available in this dataset.

Risk Assessment

Business Risks:

• Demand cyclicality in materials handling and logistics equipment
• Input cost inflation and supply chain disruptions affecting gross margin
• Pricing pressure and competitive intensity in core forklift and solutions markets
• High operating leverage causing outsized profit swings on small revenue changes
• Inventory management risk amid moderating order intake

Financial Risks:

• High leverage (liabilities/equity 3.18x) and thin interest coverage (2.2x)
• Interest rate exposure increasing financing costs
• Potential working-capital cash absorption if inventories or receivables rise
• Tax and below-the-line items creating earnings volatility

Key Concerns:

• Sustained operating margin weakness (2.5%) versus historical/peer levels
• Negative ROE (-0.58%) amplified by leverage (4.15x)
• Limited disclosure on cash flows and D&A, hindering assessment of cash earnings
• Net loss despite positive ordinary income due to taxes and non-recurring items

Investment Implications

Key Takeaways:

• Revenue down modestly (-3.3% YoY) but profits compressed sharply (OP -48% YoY), evidencing high operating leverage.
• Gross margin at 26.7% is stable, but SG&A intensity (~24% of sales) and non-operating costs are weighing on earnings.
• Leverage is high (liabilities/equity 3.18x), with interest coverage of 2.2x, raising sensitivity to further margin pressure.
• Liquidity appears adequate (current ratio 1.47x; quick ratio 1.06x), but cash data are undisclosed.
• Negative ROE (-0.58%) primarily reflects a negative net margin; leverage magnifies the downside.

Metrics to Watch:

• Operating margin trajectory and SG&A ratio to sales
• Interest expense and interest coverage
• Inventory levels and turnover (days inventory outstanding)
• Order intake/backlog and service/aftermarket mix
• Price-cost spread (realized pricing vs. input costs)
• Cash from operations and capex once disclosed

Relative Positioning: Within Japanese machinery/materials handling peers, the company currently exhibits weaker profitability (OP margin ~2.5%) and higher leverage, leaving it more exposed to macro and rate cycles; stabilization will depend on improving mix, cost discipline, and cash conversion.

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