These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.
| Metric | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥1445.8億 | ¥1540.3億 | -6.1% |
| Operating Income | ¥34.6億 | ¥10.2億 | +239.4% |
| Equity-Method Investment Gain/Loss | - | - | - |
| Ordinary Income | ¥38.6億 | ¥13.4億 | +186.9% |
| Net Income | ¥28.1億 | ¥9.2億 | +207.3% |
| ROE | 2.3% | 0.7% | - |
This was a quarter in which profitability recovered significantly despite lower revenue, with improved gross margin driving profit growth. Revenue was ¥1,445.8億（-6.1% YoY）, while Operating Income rose substantially to ¥34.6億（+239.4%）, Ordinary Income to ¥38.6億（+186.9%）, and Net Income attributable to owners of the parent (hereinafter the same) to ¥26.7億（+148.6%）. The primary factors were the turnaround to profitability in the Petroleum-Related segment and gross margin improvement（10.6%, up +2.4pt from 8.2% in the same period last year）. The key feature of this quarter was the improvement in the quality of the profit structure despite lower revenue.
【Revenue】Revenue declined 6.1% YoY to ¥1,445.8億. Petroleum-Related, which accounts for more than 80% of total revenue（approximately 82.6% of the mix）, declined to ¥1,193.4億（-8.9%）, weighing on company-wide revenue. Meanwhile, the non-petroleum segments generally recorded revenue growth: Gas-Related at ¥163.0億（+10.3%）, Chemicals-Related at ¥40.1億（+25.4%）, Other at ¥22.3億（+21.7%）, and Aviation-Related at ¥43.1億（+4.1%）. The diversification effect of the business portfolio mitigated the overall decline in revenue.
【Profit and Loss】Operating Income increased significantly to ¥34.6億（+239.4%）, Ordinary Income to ¥38.6億（+186.9%）, and Net Income to ¥26.7億（+148.6%）. Gross margin improved to 10.6%, up +2.4pt from 8.2% in the same period last year. Although the SG&A expense ratio rose slightly to 8.2%（approximately 7.6% in the same period last year）, the gross margin improvement absorbed the increase, expanding the Operating Income margin to 2.4% from 0.7%. The company recorded ¥3.5億 in extraordinary income（mainly gains on the sale of investment securities）, but the primary driver of earnings growth was improved profitability at the operating level, with only a limited contribution from temporary factors. The difference between Ordinary Income and Net Income was mainly attributable to the tax burden（effective tax rate of approximately 32%）, with no structural divergence factors identified. The results can be characterized as lower revenue but higher earnings.
On a segment-profit basis（breakdown based on Ordinary Income）, Petroleum-Related turned profitable, improving from a loss of △¥5.2億 in the same period last year to ¥14.1億, making it the largest driver of company-wide profit growth. Aviation-Related maintained a high level at ¥13.4億（¥13.0億 in the same period last year）, while Chemicals-Related rose to ¥5.3億（¥2.9億 in the same period last year）, Gas-Related to ¥7.9億（¥6.6億 in the same period last year）, and Other to ¥3.6億（¥1.4億 in the same period last year）. After deducting the adjustment for company-wide expenses and other items of △¥5.7億 from total segment profit of ¥44.3億, the figure reconciles to Ordinary Income of ¥38.6億. The shift to profitability in Petroleum-Related was the largest change, with improvements in market conditions and spreads directly driving the turnaround in company-wide earnings.
【Profitability】The Operating Income margin improved to 2.4% from 0.7% in the same period last year. The Ordinary Income margin rose to 2.7%（0.9% in the same period last year）, and the Net Income margin to 1.8%（0.7% in the same period last year）. ROE was 2.3%, while EPS was ¥43.10（¥17.22 in the same period last year, +150.3%）, indicating an improvement in profitability at each stage. 【Cash Flow Quality】Operating Cash Flow（OCF）was △¥42.4億, substantially negative against Net Income of ¥26.7億, indicating a delay in cash conversion of earnings. A decrease in accounts payable, an increase in inventories, and higher income tax payments placed pressure on working capital. 【Investment Efficiency】Capital expenditures were ¥33.1億, approximately 2.5 times depreciation and amortization of ¥13.0億, indicating a phase in which replacement and growth investments are preceding earnings. 【Financial Soundness】The Equity Ratio was 61.2%, and cash and deposits totaled ¥394.7億. Interest-bearing debt remained limited to approximately ¥19.7億, consisting of short-term borrowings of ¥4.0億 and long-term borrowings of ¥15.7億, indicating a low level of financial leverage.
Cash flow from operating activities was △¥42.4億, a significant deterioration from +¥50.2億 in the same period last year. A decrease in accounts payable（△¥45.1億）, an increase in inventories（△¥13.4億）, and income tax payments（△¥28.9億）created headwinds for working capital, while a decrease in trade receivables（+¥29.6億）partially offset these factors. Cash flow from investing activities was △¥21.5億, with capital expenditures of ¥33.1億 partially offset by proceeds from the sale of investment securities and other sources. Cash flow from financing activities was △¥38.5億, with dividend payments representing the primary use of funds. Free cash flow, combining Operating CF and investing CF, was △¥63.9億, and cash and deposits declined from the end of the previous fiscal year. While earnings improved, working capital adjustments preceded and weighed on cash generation. The status of cash conversion of earnings will be a key point to monitor from the next quarter onward.
Recurring earnings consisted of Operating Income of ¥34.6億 plus non-operating income of ¥4.7億（including dividends received of ¥1.9億）, less non-operating expenses of ¥0.8億, resulting in Ordinary Income of ¥38.6億. Non-operating items were minor relative to revenue. Extraordinary income of ¥3.5億（mainly gains on the sale of investment securities）and extraordinary losses of ¥0.6億 were non-recurring items, and their impact on Net Income of ¥26.7億 was limited. The primary driver of earnings growth was improved profitability at the operating level. Comprehensive income was ¥31.0億（¥29.9億 attributable to owners of the parent）. The difference from Net Income of ¥26.7億 was mainly due to an increase in valuation differences on securities, with no significant abnormalities identified. The fact that Operating CF was substantially below Net Income indicates a timing difference between accounting recognition of earnings and cash collection. Monitoring working capital trends is therefore useful in assessing earnings quality.
Progress against the Full-Year forecast（Revenue of ¥6,200.0億, Operating Income of ¥120.0億, Ordinary Income of ¥130.0億, and Net Income of ¥82.0億）was 23.3% for Revenue, 28.9% for Operating Income, 29.7% for Ordinary Income, and 32.5% for Net Income. Compared with the simple quarterly progress benchmark of 25%, Revenue was slightly below the benchmark, while each profit measure exceeded it. The company therefore made a solid start toward its Full-Year plan, led by improving profitability. As of the current quarter, no revisions had been made to the earnings forecast or dividend forecast.
The Full-Year dividend forecast is ¥100 per share. Based on the average number of shares outstanding during the period of approximately 6,188万 shares, annual total dividend payments are estimated at approximately ¥61.9億, resulting in a Payout Ratio of approximately 75.5% against the Full-Year Net Income forecast of ¥82.0億. Given cash and deposits of ¥394.7億 and the low level of interest-bearing debt（approximately ¥19.7億 in total）, cash on hand and the strong financial foundation support the funds available for dividends even though Free Cash Flow was △¥63.9億 during the quarter. Normalization of Operating Cash Flow toward the second half of the fiscal year will be a key point in evaluating the sustainability of this dividend level.
Commodity Market and Segment Concentration Risk: Petroleum-Related accounts for approximately 82.6% of Revenue, resulting in high sensitivity to fluctuations in crude oil and refined-product markets and spreads. The segment recorded a loss of △¥5.2億 in the same period last year, and earnings volatility could increase depending on market conditions.
Working Capital Volatility Risk: Accounts payable decreased by ¥45.1億, while inventories increased by ¥13.4億, pushing Operating Cash Flow down to △¥42.4億. Operating CF was negative despite Net Income of ¥26.7億, creating a divergence between earnings and cash generation.
Risk Related to Profitability Levels: Although the Operating Income margin of 2.4% and gross margin of 10.6% improved, the absolute levels continue to reflect a thin-margin earnings structure, limiting resilience to fluctuations in procurement costs and selling prices.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 2.4% | 4.3% (1.7%–6.9%) | -1.9pt |
| Net Income Margin | 1.9% | 3.8% (1.5%–5.1%) | -1.8pt |
Both profitability indicators were below the industry median. Although margins are improving, they remain relatively low within the industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate（YoY） | -6.1% | 3.1% (-0.6%–11.7%) | -9.2pt |
Revenue growth was substantially below the industry median, with the company in a declining-revenue phase while many peers are generally recording revenue growth.
※Source: Compiled by the Company
The substantial earnings growth despite lower revenue was primarily driven by the turnaround of the Petroleum-Related segment from a loss to a profit（△¥5.2億→¥14.1億）and gross margin improvement（+2.4pt）. Improved profitability within the business portfolio drove company-wide earnings.
Operating Cash Flow of △¥42.4億 was substantially below Net Income of ¥26.7億. Working capital factors, including a decrease in accounts payable and an increase in inventories, delayed the cash conversion of earnings. This is an important point in assessing earnings quality.
The conservative financial structure, with an Equity Ratio of 61.2% and total interest-bearing debt of approximately ¥19.7億, provides financial resilience even with a Payout Ratio of approximately 75.5% and negative Free Cash Flow.
This is a reference range mechanically calculated solely from publicly disclosed data using a residual income model（Ohlson-type model with an explicit 5-year fade）. It is not a forecast of the market share price or a recommendation of any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear（Bearish） | ¥1,835 |
| base（Base） | ¥1,847 |
| bull（Bullish） | ¥1,870 |
| Calculation Assumption | Value |
|---|---|
| Book Value Per Share（BPS） | ¥1,978 |
| Adjusted Forecast EPS | ¥144.2 |
| Cost of Equity r | 9.77%（10-year government bond 2.77% + equity risk premium 6.00% + size premium 1.00%） |
| Residual Income Persistence Coefficient ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 75.5% |
| Forecast EPS Confidence Adjustment | ×1.037（based on the industry’s historical guidance achievement rate） |
| implied PBR / PER |
Sensitivity: ¥1,799–¥1,898 at cost of equity ±1%; ¥1,843–¥1,850 at ω±0.1.
Notes:
（Calculation model: Residual Income Model / Interest Rate Reference Month: 2026-07 / This value does not forecast or guarantee future share prices）
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own responsibility, and, where necessary, after consulting with a professional advisor.
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| 0.93x / 12.8x |