| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue | ¥6115.7B | ¥6544.0B | -6.5% |
| Operating Income | ¥123.6B | ¥118.1B | +4.6% |
| Equity-Method Investment Gains/Losses | - | - | - |
| Ordinary Income | ¥134.4B | ¥128.6B | +4.5% |
| Net Income | ¥86.2B | ¥67.6B | +27.6% |
| ROE | 7.0% | 5.6% | - |
For the fiscal year ended March 2026, Revenue was ¥6115.7B (YoY -¥428.4B, -6.5%), Operating Income was ¥123.6B (YoY +¥5.5B, +4.6%), Ordinary Income was ¥134.4B (YoY +¥5.8B, +4.5%), and Net Income attributable to owners of the parent was ¥86.2B (YoY +¥18.6B, +27.6%), resulting in a decline in top-line with profit expansion. Revenue decline due to adjustments in oil prices was offset by gross margin expansion to 9.7% (from 9.0%, +0.7pt) and operating margin improvement to 2.0% (from 1.8%, +0.2pt). Segment-wise, aviation-related profit growth of +55.7% drove company-wide results. Extraordinary gains included ¥17.0B gain on sales of investment securities, while extraordinary losses included impairments of ¥5.3B, netting a +¥6.8B uplift. Operating Cash Flow (OCF) improved substantially to ¥231.1B (YoY +2,364.2%), confirming cash generation approximately 2.7x Net Income.
[Revenue] Revenue declined to ¥6115.7B (YoY -6.5%). By segment, Oil-related was ¥5164.1B (YoY -7.8%), the primary driver of contraction. Softer crude prices and decreased sales volumes combined to depress the company top-line, with this segment accounting for 83.8% of Revenue. Conversely, Aviation was ¥167.5B (YoY +16.1%) delivering double-digit growth, and Other was ¥121.0B (YoY +68.4%) showing large percentage increase but limited scale and unable to fully offset Oil's decline. Gas-related was ¥585.2B (YoY -4.6%), and Chemicals-related was ¥131.0B (YoY +0.8%), both moving modestly.
[Profitability] Operating Income rose to ¥123.6B (YoY +4.6%). Cost of sales ratio improved from 90.3% to 89.7% (-0.6pt), lifting gross margin from 9.0% to 9.7% (+0.7pt). Selling, General & Administrative expenses (SG&A) totaled ¥471.0B, unchanged YoY, but increased as a percentage of sales from 7.2% to 7.7% (+0.5pt); gross margin improvement absorbed this, improving operating margin from 1.8% to 2.0% (+0.2pt). By segment, Aviation profit surged to ¥57.1B (YoY +55.7%), and Other rose to ¥11.8B (YoY +36.1%). Oil-related profit fell to ¥56.7B (YoY -23.1%) but maintained a profit margin of about 1.1%. Non-operating income consisted of dividends received ¥4.9B and interest income ¥2.6B, totaling non-operating income ¥15.5B, while non-operating expenses were ¥4.7B (including interest expense ¥1.2B), producing net non-operating income of +¥10.9B and expanding Ordinary Income to ¥134.4B (YoY +4.5%). Extraordinary items included ¥17.0B gain on sales of investment securities, impairment losses ¥5.3B, valuation losses on investment securities ¥3.1B, etc., netting +¥6.8B. Pre-tax income was ¥141.2B (YoY +1.2%), income taxes ¥45.1B (effective tax rate 31.9%), non-controlling interests ¥4.1B, resulting in Net Income attributable to owners of the parent of ¥86.2B (YoY +27.6%). In conclusion, the company delivered revenue decline with profit growth, driven by expansion in higher-margin segments and margin improvement.
Oil-related: Revenue ¥5164.1B (YoY -7.8%), segment profit ¥56.7B (YoY -23.1%), margin ~1.1%. Softer crude prices and demand adjustments led to lower revenue and profit, though the segment remained marginally profitable. Chemicals-related: Revenue ¥127.8B (YoY +0.8%), profit ¥11.3B (YoY -1.6%), margin ~8.8%. Revenue edged up but profit remained flat. Gas-related: Revenue ¥584.7B (YoY -4.6%), profit ¥23.0B (YoY +8.8%), margin ~3.9%. Despite lower sales, margin improvement drove profit increase. Aviation-related: Revenue ¥167.5B (YoY +16.1%), profit ¥57.1B (YoY +55.7%), margin ~34.1%. Increased handling volumes and accumulation of high-unit-price projects produced the highest margin and largest profit increase among segments. Other: Revenue ¥121.0B (YoY +68.4%), profit ¥11.8B (YoY +36.1%), margin ~9.7%. Expansion in diversified areas such as metal surface treatment, building ancillary equipment contracting, and real estate leasing contributed. Total segment profit of ¥160.0B less adjustments of -¥25.4B (mainly corporate SG&A and non-operating items) reconciles to Ordinary Income of ¥134.4B.
[Profitability] Operating margin 2.0% (from 1.8%, +0.2pt), Net margin 1.4% (from 1.0%, +0.4pt). ROE 7.0% (from 7.5%, -0.5pt) slightly declined. Five-factor decomposition: EBIT margin 2.0% (from 1.8%, +0.2pt), interest burden factor 1.088 (prior 1.089, essentially flat), tax burden factor 0.611 (effective tax rate 31.9%), financial leverage 1.73x (prior 1.73x, flat), total asset turnover 2.88x (from 3.16x, down). Improvement in Net margin contributed positively to ROE, but decline in asset turnover offset this, yielding a slight ROE decrease. Gross margin 9.7% and operating margin 2.0% reflect the structural characteristics of a trading/logistics-type business and sit in the mid-range within the industry.
[Cash Quality] Operating Cash Flow/Net Income is 2.68x (OCF ¥231.1B / Net Income ¥86.2B), indicating strong cash backing for profits. OCF/EBITDA (EBITDA = Operating Income + Depreciation = ¥177.5B) is 1.30x, indicating low accrual burden. Depreciation ¥53.9B versus capital expenditures ¥64.8B yields an investment ratio of 1.20x, suggesting a reasonable pace of growth investment.
[Investment Efficiency] Total asset turnover 2.88x (from 3.16x) declined, primarily due to asset expansion from cash & deposits +¥81.3B and construction in progress +¥38.5B. Inventory turnover days (Inventories / Revenue × 365) ~5.7 days, Receivables turnover days ~24.1 days, Payables turnover days ~30.8 days, indicating a short working capital cycle.
[Financial Soundness] Equity Ratio 57.9% (prior 58.0%, effectively flat), Current Ratio 138.1%, Quick Ratio 125.0% — short-term liquidity is healthy. Interest-bearing debt ¥22.8B (short-term borrowings ¥6.5B + long-term borrowings ¥16.3B) versus cash & deposits ¥487.3B yields net cash of approximately ¥465B. Debt/EBITDA 0.13x, Interest Coverage 103.8x (Operating Income + interest income / interest expense), indicating a very conservative capital structure.
OCF was ¥231.1B (prior ¥9.4B, a large improvement). Pre-tax income before tax adjustments was ¥141.2B, plus depreciation ¥53.9B, goodwill amortization ¥5.1B, impairment losses ¥5.3B and other non-cash expenses. Working capital contributed: decrease in trade receivables +¥45.9B and increase in other current liabilities +¥27.5B were positive, while decrease in trade payables -¥53.4B and increase in inventories -¥4.9B were negative. On a net basis, subtotal was ¥270.4B less income taxes paid -¥46.7B, resulting in OCF of ¥231.1B. Investing Cash Flow was -¥52.4B, composed of capital expenditures -¥64.8B, acquisition of intangible assets -¥14.0B, and proceeds from sale of securities +¥29.1B, etc. Free Cash Flow was ¥178.8B (OCF + Investing CF), ample relative to dividends of ¥62.8B and share buybacks ¥11.0B totaling ¥73.8B. Financing Cash Flow was -¥87.7B, primarily dividends paid -¥62.3B, share buybacks -¥11.0B, and long-term debt repayments -¥5.6B. Cash and cash equivalents rose from ¥403.0B at the beginning of the period to ¥494.0B at period-end, an increase of +¥91.1B, confirming strong cash generation.
Recurring earnings comprise Operating Income ¥123.6B and net non-operating income +¥10.9B, with non-operating income ¥15.5B representing 0.3% of Revenue (mainly dividends received ¥4.9B and interest income ¥2.6B). One-off items include Extraordinary Gains ¥17.2B (gain on sales of investment securities ¥17.0B, etc.) and Extraordinary Losses ¥10.4B (impairment losses ¥5.3B, valuation losses on investment securities ¥3.1B, etc.), netting +¥6.8B and accounting for about 7.9% of Net Income ¥86.2B. OCF ¥231.1B is 2.68x Net Income ¥86.2B, and accrual ratio -168% ((Net Income - OCF)/Total Assets) indicates very strong cash backing for profits. Comprehensive income ¥102.2B shows a ¥11.2B deviation relative to Net Income ¥91.0B (including non-controlling interests), mainly due to other securities valuation differences +¥0.2B and actuarial gains/losses adjustments +¥5.9B. The gap between Ordinary Income ¥134.4B and Net Income ¥86.2B is explained by tax burden ¥45.1B and non-controlling interests ¥4.1B; no abnormal divergence is observed.
Against the full-year plan (Revenue ¥6200B, Operating Income ¥120B, Ordinary Income ¥130B, Net Income attributable to owners of the parent ¥82B, Dividend ¥50), actual results were Revenue ¥6115.7B (progress 98.6%), Operating Income ¥123.6B (103.0%), Ordinary Income ¥134.4B (103.4%), Net Income ¥86.2B (105.1%). Revenue underperformed due to oil price assumptions being lower than realized, but Operating Income, Ordinary Income, and Net Income exceeded plan thanks to improved segment mix and cost efficiency. The progress suggests company guidance was conservatively set, and higher-than-expected contributions from higher-margin segments were confirmed. Dividends: interim ¥50 paid, year-end ¥50 planned, for an annual ¥100.
Dividends are planned at interim ¥50 and year-end ¥50, totaling ¥100 annually (same as prior year). Payout Ratio is 73.0% (dividends ¥62.8B / Net Income ¥86.2B), roughly unchanged from 73% prior year. Share buybacks of ¥11.0B were executed; combined with dividends, Total Return Ratio is approximately 85.6% (total returns ¥73.8B / Net Income ¥86.2B). With Free Cash Flow ¥178.8B and total returns ¥73.8B, FCF coverage is 2.42x, indicating high sustainability. Cash & deposits ¥487.3B and interest-bearing debt ¥22.8B leave net cash of ≈¥465B, supporting dividend capacity. Shares outstanding 63.00M (treasury stock 1.118M), weighted average shares during period 62.266M.
Oil price and supply-demand volatility risk: The Oil-related business, accounting for 83.8% of Revenue, is directly tied to crude prices and sales volumes; the segment recorded YoY -7.8% revenue decline this period. Continued softening of oil markets or demand contraction could simultaneously compress top-line and gross margins.
Structural risk from decarbonization and energy transition: A portfolio with high reliance on fossil fuels faces mid- to long-term demand reduction pressure as decarbonization policies strengthen and shift to renewables accelerates. The low profitability structure of the Oil-related segment (margin 1.1%) limits capacity to absorb structural transition costs.
Segment concentration risk: Oil-related accounts for over 80% of Revenue while Aviation, Gas, Chemicals, and Other combined account for only 16.2%. In adjustment phases of the core business, the relatively small size of high-margin segments leaves overall portfolio earnings stability as a concern.
Profitability & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 2.0% | 3.4% (1.4%–5.0%) | -1.3pt |
| Net Margin | 1.4% | 2.3% (1.0%–4.6%) | -0.9pt |
Both Operating Margin and Net Margin are below the industry median, highlighting the relatively pronounced low-margin structure of a trading/logistics-type business even within the sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | -6.5% | 5.9% (0.4%–10.7%) | -12.3pt |
Revenue growth underperformed the industry median by 12.3pt, reflecting relative weakness due to oil price adjustments.
※ Source: Company aggregation
Despite revenue decline, gross margin improved +0.7pt and operating margin +0.2pt, as higher-margin segment mix lifted company-wide margins. Aviation profit +55.7% and margin 34.1% were main drivers, functioning as a revenue source to complement structural contraction in Oil-related operations.
OCF improved substantially to ¥231.1B (YoY +2,364.2%), confirming cash generation 2.68x Net Income. Free Cash Flow ¥178.8B comfortably exceeds total returns ¥73.8B, supporting high sustainability for payout ratio 73% and Total Return Ratio 85.6%. Net cash ≈¥465B and Debt/EBITDA 0.13x indicate a very conservative financial base that supports both stable dividends and growth investment.
Portfolio concentration with Oil-related accounting for 83.8% of Revenue is a structural risk factor, making the company highly sensitive to decarbonization pressures and supply-demand fluctuations. Industry comparisons show Operating Margin -1.3pt and Revenue Growth -12.3pt relative to medians, suggesting the need to expand high-margin segments and reduce oil dependence to improve mid-term earnings stability.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information aggregated by the Company based on publicly disclosed financial statements. Investment decisions are your own responsibility; consult professionals as necessary before making investment decisions.