Tokyo Tatemono Co.,Ltd. FY2025 Q3 Earnings Report

Financial Highlights

• Operating Income: ¥50.60B
• Net Income: ¥36.47B
• EPS: ¥141.81

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

Tokyo Tatemono (8804) reported FY2025 Q3 (cumulative) consolidated results under JGAAP with operating income of ¥50.6bn, down 17.9% YoY, and net income of ¥29.5bn, down 17.0% YoY, indicating a softening in profitability versus the prior year. Revenue and gross profit were not disclosed in the provided XBRL extract, limiting margin analysis; however, the deterioration at the operating line suggests either weaker development contributions, timing effects on completions/handover, or pressure in leasing/asset sales. Ordinary income of ¥41.5bn sits ¥9.1bn below operating income, implying ¥9.1bn of net non-operating expense, of which ¥6.9bn is interest expense; the residual roughly ¥2.3bn likely reflects other net non-operating losses (e.g., FX, equity-method, or other financial items). Income tax expense of ¥17.2bn plus net income of ¥29.5bn implies income before taxes of roughly ¥46.7bn, exceeding ordinary income by about ¥5.3bn, suggesting the presence of net extraordinary gains or adjustments below ordinary income. EPS stands at ¥141.81; back-solving implies an average share count in the vicinity of ~208 million shares, acknowledging potential differences between basic/diluted and minorities. Balance sheet strength appears adequate: total assets are ¥2.23tn, equity ¥565.6bn, implying an equity ratio of about 25.4% (despite the reported 0.0% field being undisclosed) and financial leverage (A/E) of ~3.94x. Liquidity looks solid with current assets of ¥730.7bn and current liabilities of ¥297.8bn, yielding a current ratio of ~2.46x and working capital of ¥432.9bn. Debt-to-equity of 2.71x is elevated but not atypical for a diversified developer; interest coverage at 7.4x provides a cushion against rate and credit cycles. Cash flow statement line items are not disclosed, limiting assessment of operating cash generation, investment outflows, and free cash flow. Dividend data are not disclosed here; payout ratios and coverage cannot be assessed from the extract. Overall, profitability is under pressure YoY, but solvency and liquidity remain manageable, and the capital structure is consistent with sector norms. The mix between operating, ordinary, and pretax results highlights meaningful non-operating and special items, which should be monitored for sustainability. Given real estate cyclicality, results may be influenced by handover timing, asset sales cadence, and leasing trends heading into Q4. Data limitations (notably revenue, cash flow, inventories, and dividends) constrain a full DuPont and cash-based quality assessment. Key watchpoints include Q4 handover schedules, leasing occupancy/rent spreads, refinancing progress and rates, and the pipeline for asset rotations. On balance, the company shows decent financial resilience but faces profit normalization risks amid higher financing costs and project timing effects.

Profitability Analysis

ROE_decomposition: A full DuPont decomposition is constrained by undisclosed revenue and average equity. Using end-period figures: financial leverage (A/E) is 3.94x (¥2,229.9bn / ¥565.6bn). Net profit margin and asset turnover are not derivable due to undisclosed revenue. Point-estimate ROE cannot be reliably computed without average equity and full-year net income; however, NI of ¥29.5bn over period-end equity implies a non-annualized ROE proxy of 5.2% for 9M, not directly comparable to annual ROE. margin_quality: Operating income declined 17.9% YoY to ¥50.6bn; revenue and gross profit weren’t disclosed, so we cannot observe gross or operating margin trends. The step-down from operating income to ordinary income (−¥9.1bn) is largely explained by interest expense (¥6.9bn) plus other non-operating net costs (¥2.3bn). Below ordinary, pretax appears to benefit from net special gains (¥5.3bn), partially offsetting operating pressure. operating_leverage: The 17.9% YoY decline in operating income suggests negative operating leverage versus last year, potentially stemming from softer development recognition, fewer asset sales, or cost inflation in construction. Without revenue, we cannot quantify incremental margins, but the absolute decline indicates profit sensitivity to volume/timing typical in real estate developers.

Growth Assessment

revenue_sustainability: Revenue was not disclosed; thus, we cannot assess top-line growth or mix. Given the sector, revenue is likely driven by development handovers, leasing rents, and asset sales, which can be lumpy across quarters. profit_quality: Ordinary income of ¥41.5bn trails operating income by ¥9.1bn due to financing and other non-operating costs, indicating a meaningful reliance on debt financing. The implied pretax uplift (~¥5.3bn) from extraordinary items suggests non-recurring contributions that may not persist. outlook: Heading into Q4, profit trajectory will hinge on the handover schedule of development projects, leasing occupancy/rent revisions, and the cadence of planned asset sales. Financing costs (¥6.9bn interest in 9M) are a headwind; sustaining operating income would likely require stable leasing NOI and timely development recognitions.

Financial Health

liquidity: Current assets ¥730.7bn vs current liabilities ¥297.8bn imply a current ratio ~2.46x and working capital of ¥432.9bn, indicating solid liquidity and near-term funding flexibility. solvency: Total liabilities of ¥1,533.7bn vs equity of ¥565.6bn yield a debt-to-equity (liabilities/equity) of 2.71x. Equity ratio is ~25.4% (equity/total assets), which is moderate for the sector. Interest coverage at ~7.4x (operating income/interest expense) is acceptable but exposed to rate increases. capital_structure: Asset-to-equity leverage is ~3.94x. The ordinary-to-operating income gap highlights meaningful financial costs; refinancing terms and debt maturity ladder will be important given the interest expense run-rate.

Cash Flow Quality

earnings_quality: Cash flow statements were not disclosed, preventing reconciliation of accrual earnings to cash. The presence of special items below ordinary income suggests that a portion of 9M earnings may be non-recurring. FCF_analysis: Operating CF and investing CF were not reported; hence, free cash flow cannot be computed. For a developer, FCF can be volatile due to land acquisition and construction spend; absent data, we cannot judge FCF sustainability. working_capital: Inventories were undisclosed, limiting analysis of development WIP and pre-sale dynamics. Nevertheless, positive working capital of ¥432.9bn supports near-term liquidity, albeit composition (cash vs receivables vs inventory) is unknown.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio were not disclosed in this extract. With EPS at ¥141.81 for 9M, theoretical payout capacity exists, but actual policy and full-year earnings are needed to assess sustainability. FCF_coverage: Free cash flow data were not provided; FCF coverage of dividends cannot be assessed. In real estate, FCF can be negative in growth phases despite accounting profits. policy_outlook: No guidance or policy details provided here. Historically, developers balance dividends with investment needs and leverage targets; absent data, we assume a prudent stance subject to cash generation and leverage.

Risk Assessment

Business Risks:

• Project timing risk in development handovers affecting quarterly earnings
• Leasing market risk: occupancy, rent renewals, and tenant credit
• Asset sale dependence and market liquidity for property disposals
• Construction cost inflation and contractor availability
• Regulatory and zoning changes impacting pipeline and asset values
• Condominium pre-sale pace and cancellation risk
• Competition for land acquisitions compressing development margins

Financial Risks:

• Interest rate risk raising financing costs (¥6.9bn interest expense in 9M)
• Refinancing and debt maturity concentration risk given 2.71x liabilities/equity
• Valuation risk on investment properties impacting non-cash P&L and covenants
• Cash flow volatility due to investment cycles and lumpy asset rotations
• Potential reliance on extraordinary gains to support pretax earnings

Key Concerns:

• 17.9% YoY decline in operating income signals weaker core profitability
• Non-operating costs materially reduce ordinary income vs operating income
• Earnings uplift from special items (~¥5.3bn) may be non-recurring
• Limited disclosure (revenue, cash flows, inventories, dividends) constrains visibility

Investment Implications

Key Takeaways:

• Core profitability softened: operating income ¥50.6bn (-17.9% YoY) and net income ¥29.5bn (-17.0% YoY)
• Leverage and liquidity are within sector norms: equity ratio ~25.4%, current ratio ~2.46x, interest coverage ~7.4x
• Non-operating and special items meaningfully influence bottom line; quality of earnings warrants scrutiny
• Data gaps (revenue, CFS, DPS) limit full margin, FCF, and payout analysis

Metrics to Watch:

• Q4 development handover schedule and booked unit margins
• Leasing KPIs: occupancy, passing rents vs ERV, and rent reversion
• Debt maturity profile, average interest cost, and hedging ratio
• Asset rotation progress and gains on sales
• Construction cost trends and land acquisition discipline

Relative Positioning: Within Japanese diversified developers, Tokyo Tatemono shows moderate equity buffer (~25%) and manageable coverage (~7x), with profitability currently trending below prior year and earnings partially supported by non-operating/special items.

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