Anicom Holdings,Inc. FY2026 FY Earnings Report

Quick View

Executive Summary

For the fiscal year ended March 2026, Revenue was ¥37.2B (vs prior year +¥12.2B, +48.5%), Operating Income was ¥20.5B (vs prior year +¥10.5B, +105.2%), Ordinary Income was ¥35.4B (vs prior year -¥14.0B, -28.3%), and Net Income was ¥19.3B (vs prior year +¥10.1B, +109.8%). The core non-life insurance business achieved substantial operating profit growth due to improvements in underwriting profitability and stable investment income, while Ordinary Income declined due to deterioration in financial results. Despite recording Special Losses of ¥3.3B (of which impairment losses were ¥2.3B), Net Income increased for the second consecutive period after tax effects. Operating margin improved markedly from 39.8% in the prior year to 55.0% (+15.2pt), indicating a notable enhancement in earnings power.

Drivers of Performance

[Revenue] Revenue of ¥37.2B (YoY +48.5%) was primarily driven by an increase in net written premiums in the non-life insurance business. By segment, the Non-life Insurance Business reported ¥658.2B (+8.8%) and accounted for 89.1% of total revenue, Pet Internet Services Business ¥22.7B (+1.3%), Veterinary Hospital Operations Business ¥24.0B (+10.7%), Health Innovation Business ¥5.7B (+65.6%) showing mixed growth rates. Other Businesses ¥27.8B (+13.7%) were also solid. In addition to improved underwriting profitability, investment income of ¥16.4B (prior year ¥15.9B) provided support.

[Profitability] Operating Income of ¥20.5B (+105.2%) increased significantly due to improvements in loss ratio and expense ratio in the non-life insurance business. Operating margin of 55.0% (prior year 39.8%) was aided by SG&A ratio of 45.0% and improved SG&A efficiency relative to revenue. Ordinary Income of ¥35.4B (-28.3%) declined due to an increase in non-operating expenses of ¥1.1B (including interest expense ¥0.9B) and the absence of one-off gains that had supported the prior year at the ordinary level. Special Losses of ¥3.3B (impairment losses ¥2.3B, loss on disposal of fixed assets ¥0.5B) were recorded, and after deducting corporate taxes of ¥10.1B (effective tax rate 31.4%) and adding non-controlling interests loss of ¥0.5B, Net Income was ¥19.3B (+109.8%) — representing growth on both revenue and profit.

Segment Analysis

The Non-life Insurance Business posted segment profit of ¥47.97B (prior year ¥56.02B, -14.4%), centered on net written premiums of ¥641.03B within external customer Ordinary Revenue of ¥658.17B. Investment income of ¥16.25B (prior year ¥15.89B) contributed stably. Loss ratio was 58.1% (calculated from insurance claims paid and provision increases in the non-life insurance business), expense ratio 32.3%, and combined ratio 90.4%, indicating sound underwriting profitability. The Pet Internet Services Business recorded segment profit of ¥1.03B (prior year ¥2.39B, -56.9%) with declining profitability. The Veterinary Hospital Operations Business posted a segment loss of ¥7.17B (prior year loss ¥0.28B), with the enlarged deficit affected by increased capital expenditures and depreciation of ¥4.05B. The Health Innovation Business also continued in the red with a segment loss of ¥3.08B (prior year loss ¥1.32B). Other Businesses improved to a loss of ¥3.03B (prior year loss ¥7.30B). The total segment profit after corporate adjustments of ¥35.70B roughly corresponds to Ordinary Income of ¥35.43B, and improvement in loss-making segments is key to further companywide earnings expansion.

Key Financial Metrics

[Profitability] Operating margin 55.0% (prior year 39.8%, +15.2pt) rose sharply due to SG&A efficiency (SG&A ratio 45.0%) and improved underwriting profitability. ROE 6.7% (prior year 11.2%) declined despite higher Net Income because of an increase in shareholders’ equity (¥289.4B, prior year ¥280.7B). Loss ratio 58.1%, expense ratio 32.3%, combined ratio 90.4% in the non-life insurance business indicate healthy underwriting. [Cash Quality] Operating Cash Flow (OCF) ¥48.2B is 2.5x Net Income ¥19.3B, yielding good cash conversion. From OCF subtotal ¥58.0B, corporate tax payments of ¥17.6B were deducted to secure OCF. [Investment Efficiency] Total asset turnover 0.049x (prior year 0.035x) improved despite asset base expansion, but remains low given insurance company characteristics. Increase in tangible fixed assets to ¥64.2B (prior year ¥30.7B, +109.1%) reflects expanded capital investment in veterinary hospitals and the like. Goodwill ¥21.6B (7.5% of equity) stems from past M&A, and amortization ¥2.6B (12.7% of Operating Income) weighs on profits. [Financial Soundness] Equity Ratio 37.7% (prior year 38.9%) edged down but remains at an appropriate level. Current ratio 100.3% (current assets ¥55.2B / current liabilities ¥55.0B) and quick ratio 100.3% are tight; with cash of ¥14.9B vs. 1-year redeemable corporate bonds ¥50.0B, short-term liquidity is constrained. Interest-bearing debt totaling ¥150.0B (corporate bonds ¥50.0B, 1-year redeemable corporate bonds ¥50.0B, short-term borrowings ¥50.0B) is covered to some extent by OCF ¥48.2B, but increasing the liquidity buffer remains a challenge.

Cash Flow Analysis

OCF was ¥48.2B (prior year ¥64.0B, -24.7%); from OCF subtotal ¥58.0B, corporate tax payments ¥17.6B were deducted to secure OCF. Year-on-year decline was impacted by cash outflows from working capital changes (increase in policyholder reserves ¥29.1B, increase in unpaid losses ¥5.8B, etc.). Investing Cash Flow was -¥166.7B (prior year -¥50.9B), a significant outflow. Breakdown includes acquisition of short-term investment securities -¥218.2B (prior year -¥75.2B), capital expenditures -¥49.2B (prior year -¥5.9B), payments for business transfers -¥2.2B, acquisition of shares of subsidiaries and affiliates -¥0.5B, etc., driven by accumulation of invested assets and accelerated growth investment. Financing Cash Flow was -¥16.7B (prior year +¥2.7B), with bond redemptions -¥50.0B, share buybacks -¥10.2B, dividend payments -¥6.4B as cash outflows, partially offset by bond issuance +¥49.7B. Free Cash Flow was -¥118.5B (OCF + Investing CF), reflecting an investment expansion phase. Cash decreased by -¥135.2B during the period from beginning balance ¥226.1B to ending balance ¥90.9B (reconciled as cash and deposits on the balance sheet ¥14.9B plus asset-account cash INS ¥133.9B). Short-term liquidity is heavily constrained with cash ¥14.9B vs. 1-year redeemable corporate bonds ¥50.0B, and sale of investment securities or continued OCF generation are prerequisites for refinancing.

Quality of Earnings

Of Ordinary Income ¥35.4B, Operating Income ¥20.5B was earned from core operations, and investment income ¥16.4B was a major recurring incremental factor at the ordinary level. Non-operating expenses ¥1.1B (interest expense ¥0.9B, other ¥0.1B) reflect interest burden on interest-bearing debt. Special Losses ¥3.3B (impairment losses ¥2.3B, loss on disposal of fixed assets ¥0.5B) are one-time items; the impairments relate to reassessments of fixed assets such as veterinary hospital assets. Comprehensive income ¥25.1B comprises Net Income ¥19.3B plus net unrealized gains on securities ¥3.1B, with valuation differences lifting equity. Non-operating income ¥0.2B and Special Gains ¥0.0B were limited, so the bulk of profit is based on core business and investment income. Accrual (Net Income - OCF) is -¥28.9B, indicating a healthy structure where cash flow exceeds profit. Equity-method losses ¥0.5B reflect limited-scale contributions to losses from affiliates.

Forecasts & Guidance

Full-year guidance projects Ordinary Income ¥50.0B (prior year ¥49.4B, +1.2%), Net Income attributable to owners of the parent ¥32.5B, and EPS ¥44.43. The current period Ordinary Income ¥35.4B represents 70.9% of the full-year forecast, indicating roughly steady progress. Net Income ¥19.3B is 59.4% of the full-year forecast ¥32.5B, assuming profit accumulation in H2. The full-year outlook implies Ordinary Income up +41.1% YoY, premised on maintaining underwriting profitability and stable investment income. Dividend forecast is ¥0, indicating a cut from last period’s ¥9 and suggesting a reduced distribution policy. Achieving the full-year targets will require restraint in loss ratio and expense ratio in H2 and reduction of losses in deficit segments (Veterinary Hospital Operations and Health Innovation).

Shareholder Returns

A year-end dividend of ¥9 per share (Payout Ratio 20.2%) was paid. Total dividends ¥6.4B correspond to 33.2% of Net Income ¥19.3B, and the payout ratio is at an appropriate level. Share buybacks of ¥10.2B were executed, resulting in total shareholder returns of ¥16.6B and Total Return Ratio 86.0% (dividends ¥6.4B + buybacks ¥10.2B / Net Income ¥19.3B). Free Cash Flow was -¥118.5B, insufficient to cover dividends and buybacks, so total returns rely on either restraining Investing CF or financing via bond issuance/borrowings. Full-year dividend guidance is ¥0, indicating a potential dividend reduction in H2. Under liquidity constraints with cash ¥14.9B and 1-year redeemable corporate bonds ¥50.0B, balancing shareholder returns with growth investments is a key issue.

Risk Factors

1. Short-term liquidity risk: With cash ¥14.9B vs. 1-year redeemable corporate bonds ¥50.0B and current ratio 100.3%, the liquidity buffer is thin. Sale of short-term investment securities or continued OCF generation are preconditions for refinancing; adverse market conditions could create funding risks.

2. Earnings pressure from loss-making segments: Veterinary Hospital Operations recorded a loss of ¥7.2B and Health Innovation recorded a loss of ¥3.1B, diluting companywide profits. Expanded capital expenditures (depreciation ¥12.3B, prior year ¥8.5B) increase fixed cost burdens, leading to continued cash outflows until break-even is reached.

3. Underwriting profitability fluctuation risk: Although loss ratio 58.1% and combined ratio 90.4% are currently favorable, frequent natural disasters or epidemics could push loss ratio higher and rapidly worsen underwriting profits. Investment income ¥16.4B is also exposed to interest rate and market fluctuations, so the stability of Ordinary Income depends on macro risks.

Industry Benchmark (Reference, Company Survey)

Profitability & Returns

Both operating margin and net margin substantially exceed the industry median, highlighting a high-return structure focused on pet insurance.

Growth & Capital Efficiency

Revenue growth rate outperforms the industry median by 46.4pt, driven by underwriting expansion and growth in new businesses.

※Source: Company aggregation

Key Points from the Financial Results

1. Sustained good underwriting profitability and high operating profitability at the operating level (Operating margin 55.0%, Combined ratio 90.4%) provide a foundation for medium-term earnings expansion, supported by growth potential in the pet insurance market. Stable contribution from investment income ¥16.4B is also a supporting factor.

2. Short-term liquidity constraints (current ratio 100.3%, cash ¥14.9B vs. 1-year redeemable corporate bonds ¥50.0B) and continued losses in deficit segments (Veterinary Hospital -¥7.2B, Health Innovation -¥3.1B) introduce uncertainty to the growth scenario. Timing of reductions in Investing CF and improvement in loss-making businesses will determine sustainability of capital efficiency (ROE 6.7%) and shareholder returns.

3. Comprehensive income ¥25.1B includes net unrealized gains on securities ¥3.1B, so market valuation movements of invested assets affect equity. Given seasonality of loss ratios and sensitivity to interest rate environment, monitoring quarterly performance is important.

---

This report is an AI-generated financial analysis document produced by 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 public financial statements. Investment decisions are your own responsibility; consult a professional advisor as needed before making investment decisions.

---End of Report---