Area Quest (8912) FY2026 Q2 Earnings Report

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Executive Summary

The company reported Q2 FY2026 results with revenue of 1.233 billion yen (up 3.4% YoY), operating income of 113 million yen (up 27.2% YoY), ordinary income of 139 million yen (up 466.6% YoY), and net income of 74 million yen (up 1,544.0% YoY). Operating profitability improved with operating margin expanding to approximately 9.2% from 7.2% in the prior year period, driven by enhanced operational efficiency. Ordinary income surged significantly due to non-operating income contributions, though the effective tax rate remained elevated, moderating net income growth. Operating cash flow of 137 million yen exceeded net income by 1.85x, demonstrating healthy cash conversion. Total assets increased to 4.016 billion yen from 3.945 billion yen, while equity strengthened to 1.505 billion yen from 1.391 billion yen, reflecting retained earnings accumulation and share buyback execution.

Performance Drivers

Revenue increased 3.4% YoY to 1.233 billion yen, representing modest but stable top-line growth. The revenue expansion was achieved despite limited asset turnover of 0.307x, reflecting the company's significant asset base including investment securities of 815 million yen (20.3% of total assets) and fixed assets. Cost of sales grew at a slower pace than revenue, contributing to gross profit margin expansion. Selling, general and administrative expenses increased but at a controlled rate relative to sales growth, supporting operating leverage improvement. Operating income reached 113 million yen, up 27.2% YoY, with operating margin improving approximately 1.7 percentage points to 9.2%. This operational improvement demonstrates enhanced efficiency in core business execution. Ordinary income of 139 million yen showed a dramatic 466.6% increase, significantly exceeding operating income by 26 million yen, indicating meaningful non-operating income contributions. The gap between ordinary income and net income was substantial, with net income at 74 million yen representing only 53.2% of ordinary income, primarily due to high effective tax burden. Non-recurring factors were minimal, with core earnings driven by operational improvements. This represents a revenue up, profit up pattern with particularly strong leverage at the ordinary income level, though tax effects dampened the flow-through to net income.

Key Metrics

[Profitability] ROE of 4.9% reflects moderate profitability driven by net profit margin of 6.0%, asset turnover of 0.307x, and financial leverage of 2.67x equity multiplier. Operating margin of 9.2% improved 1.7 percentage points from 7.2% YoY, indicating enhanced operational efficiency. The DuPont analysis reveals that financial leverage and improving net profit margin are the primary ROE drivers, with asset efficiency remaining constrained. [Cash Quality] Cash and deposits of 918 million yen provide coverage of 6.42x against short-term liabilities, ensuring adequate immediate liquidity despite current ratio concerns. Operating cash flow of 137 million yen represents 1.85x net income, confirming strong cash-backed earnings quality. Working capital of negative 404 million yen creates a cash-generative operating model. [Investment Efficiency] Total asset turnover of 0.307x remains modest, reflecting the asset-intensive nature of the business with significant investment securities holdings. Capital expenditure of 3 million yen represents only 0.04x depreciation, indicating minimal reinvestment in fixed assets. [Financial Health] Total assets of 4.016 billion yen with equity of 1.505 billion yen yield an implied equity ratio of 37.5%. Current ratio of 58.7% falls below standard thresholds, warranting attention to short-term liquidity management. Debt-to-equity ratio of 0.11x (interest-bearing debt of 173 million yen) reflects conservative leverage, with interest coverage of 12.83x demonstrating strong debt servicing capacity.

Cash Flow Analysis

Operating cash flow of 137 million yen represents 1.85x net income of 74 million yen, confirming high-quality earnings with strong cash conversion. The accrual ratio of negative 1.6% indicates cash-based profitability exceeding accounting earnings. Working capital contributed positively to operating cash flow, with accounts payable declining 4 million yen (down 26.9%) reflecting efficient supplier payment management while maintaining operational flexibility. Investing cash flow generated 71 million yen primarily from minimal capital expenditure of 3 million yen, representing only 4% of depreciation and suggesting deferred asset renewal. Free cash flow of 208 million yen (operating CF plus investing CF) provided ample capacity for shareholder returns. Financing cash flow was negative 227 million yen, driven by share buybacks of 101 million yen and debt reduction including long-term borrowings down 66 million yen (down 37.2%) and short-term borrowings down 23 million yen (down 27.2%). Cash and deposits increased to 918 million yen, maintaining strong liquidity coverage despite the current ratio of 58.7%, as cash holdings provide 6.42x coverage of short-term liabilities.

Earnings Quality

Ordinary income of 139 million yen versus operating income of 113 million yen reflects net non-operating income contribution of approximately 26 million yen, representing 2.1% of revenue. Non-operating income composition includes financial income from the company's investment securities portfolio of 815 million yen, which generated returns through interest, dividend income, and equity method gains. The non-operating contribution, while significant in percentage terms relative to operating income (23% uplift), remains modest as a revenue percentage, suggesting earnings are primarily operationally driven. Operating cash flow of 137 million yen exceeding net income of 74 million yen by 1.85x indicates healthy earnings quality with minimal accrual risk. The accrual ratio of negative 1.6% confirms cash-backed profitability. Comprehensive income of 164 million yen exceeded net income by 90 million yen, with the difference attributable to valuation gains on investment securities, representing unrealized gains not yet reflected in net income. This demonstrates the material influence of investment portfolio valuations on total economic performance, though core recurring earnings remain operationally generated.

Guidance Update

Full-year guidance projects revenue of 2.5 billion yen, operating income of 230 million yen, ordinary income of 240 million yen, and net income of 144 million yen with annual dividend of 3.0 yen per share. Current quarterly performance shows progress rates of 49.3% for revenue (slightly below the standard 50% at H1), 49.1% for operating income (on track), 57.9% for ordinary income (ahead of pace), and 51.4% for net income (slightly ahead). The full-year forecast implies YoY changes of plus 0.9% for revenue, minus 21.0% for operating income, and plus 27.9% for ordinary income. The divergence between operating income decline forecast and ordinary income increase forecast suggests expected non-operating income gains offsetting operational headwinds in the full-year outlook. Current quarterly results with operating income up 27.2% YoY significantly outperform the full-year operating income decline forecast, indicating either conservative guidance or anticipated second-half challenges. The ordinary income surge of 466.6% in Q2 versus full-year guidance of plus 27.9% suggests substantial non-recurring or front-loaded non-operating gains. Progress rates indicate the company is tracking reasonably against targets, though the operating income forecast warrants monitoring given current outperformance.

Shareholder Returns

The company plans an annual dividend of 3.0 yen per share for the full fiscal year, with no interim dividend declared for Q2. Based on full-year forecasted EPS of 8.96 yen and dividend of 3.0 yen, the prospective payout ratio is 33.5%. However, based on current quarterly net income of 74 million yen and the dividend commitment, the implied payout ratio against quarterly earnings run-rate is approximately 69.5%, reflecting higher distribution relative to current earnings. Share buyback activities totaling 101 million yen were executed during the period, representing significant capital return alongside dividends. The total return ratio combining dividends and buybacks against net income is elevated, indicating aggressive shareholder return policy. Free cash flow of 208 million yen provides 4.05x coverage of the quarterly dividend obligation, suggesting current sustainability, though the combination of high dividends and share buybacks consuming 149 million yen (72% of FCF) leaves limited margin for sustained capital allocation at current earnings levels. The shareholder return policy reflects management confidence in cash generation, though sustainability warrants monitoring given minimal reinvestment (CapEx of only 3 million yen) and high distribution rates.

Risk Factors

Liquidity risk emerges from current ratio of 58.7%, indicating current liabilities of 1.433 billion yen exceed current assets of 576 million yen by 857 million yen. While cash holdings of 918 million yen provide 6.42x coverage of short-term debt, the structural liquidity mismatch requires careful working capital management to ensure operational flexibility and meet short-term obligations without asset liquidation.

Capital allocation sustainability risk stems from the combination of high shareholder returns (dividends plus 101 million yen buybacks) totaling 72% of free cash flow, coupled with minimal reinvestment as evidenced by CapEx-to-depreciation ratio of only 0.04x. This raises questions about long-term asset base maintenance and growth capacity, particularly if earnings decline or non-recurring income sources diminish.

Revenue growth and asset efficiency constraints are reflected in modest 3.4% revenue growth and low asset turnover of 0.307x. The significant investment securities holdings (20.3% of assets) and fixed asset base generate returns through non-operating income but limit operational asset efficiency, potentially constraining ROE expansion and revenue scaling without improved turnover or asset redeployment.

Industry Benchmark (Reference - Proprietary Data)

[Industry Position] (Reference - Proprietary Analysis) The company's operating margin of 9.2% for FY2026 demonstrates operational efficiency with 1.7 percentage point improvement from the prior year. Net profit margin of 6.1% reflects moderate profitability after tax effects. Revenue growth of 3.4% YoY indicates steady but modest expansion relative to asset base. While industry-wide median benchmarks are limited in the available data, the company's historical trend shows stable operating margin maintenance in the 9% range with consistent single-digit revenue growth. The profitability profile suggests a mature business model with emphasis on efficiency optimization rather than aggressive expansion. The company's capital structure with equity multiplier of 2.67x and conservative interest-bearing debt of 173 million yen positions it as financially stable within its operating context. Asset intensity reflected in low turnover of 0.307x suggests capital-intensive or investment-heavy business characteristics, requiring continued focus on asset productivity to drive return improvement. (Industry: Reference data from company historical periods, Comparison: Year-over-year and multi-period trend, Source: Proprietary analysis)

Key Takeaways from Earnings

Operating efficiency improvement driving 27.2% operating income growth despite modest 3.4% revenue growth demonstrates the company's ability to extract margin expansion through cost discipline and operational leverage. The operating margin improvement of 1.7 percentage points to 9.2% represents a significant profitability inflection that could sustain if structural cost improvements are maintained, though the full-year guidance forecasting operating income decline suggests management anticipates normalization or second-half pressures.

Cash generation quality is evidenced by operating cash flow of 1.85x net income and positive free cash flow of 208 million yen, enabling aggressive shareholder returns of 101 million yen in buybacks while reducing debt. However, minimal capital expenditure of 3 million yen (4% of depreciation) raises questions about long-term asset base sustainability and growth investment adequacy, potentially limiting future revenue scaling and requiring eventual CapEx normalization that would pressure free cash flow.

Liquidity structure and capital allocation present a mixed picture with strong cash holdings of 918 million yen providing 6.42x short-term debt coverage, offset by current ratio of 58.7% indicating working capital deficit. The combination of high payout commitments (69.5% payout ratio on quarterly run-rate basis), share buybacks consuming significant FCF, and deferred capital investment creates execution dependency on sustained cash flow performance and working capital efficiency to maintain both shareholder returns and operational flexibility.

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This report was automatically generated by AI analyzing XBRL earnings data as an earnings analysis tool. This is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled from publicly available earnings data. Please make investment decisions at your own responsibility and consult professionals as needed.

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AI Financial Analysis

Executive Summary

FY2026 Q2 performance was solid, with modest revenue growth translating into materially stronger operating and pre-tax earnings and positive operating cash generation. Revenue rose 3.4% YoY to ¥1.233bn. Gross profit increased 11.2% YoY to ¥345m, exceeding the pace of revenue growth. Gross margin expanded by approximately 200bp to 28.0% from 26.0% in the prior-year period. Operating income increased 27.2% YoY to ¥113m. Operating margin improved by approximately 169bp to 9.2% from 7.5%, placing profitability within the stated good-range benchmark. SG&A increased only 4.8% YoY to ¥232m, broadly in line with revenue and well below gross-profit growth, demonstrating positive operating leverage. Ordinary income rose sharply to ¥139m, supported by higher operating income, non-operating income of ¥57m, and a substantial reduction in non-operating expenses to ¥31m from ¥81m. Net income was ¥74.8m, compared with ¥4.5m in the prior-year period, despite an extraordinary loss of ¥17m. The extraordinary loss included ¥9m of loss on fixed-asset sales and retirement, which restrained reported net income but was not large enough to alter the underlying earnings recovery. The effective tax rate was relatively high at 39.0%, resulting in a tax burden of 0.604. Operating cash flow of ¥137m exceeded net income by 1.85x, supporting the cash realization of earnings. Reported free cash flow was ¥208m, although this includes a ¥71m investing cash inflow and should not be treated entirely as recurring free cash generation. The balance sheet remains asset-heavy, with non-current assets representing 85.6% of total assets and investment securities accounting for 20.3%. Liquidity is the principal balance-sheet constraint: the current ratio and quick ratio were both 58.7%, with working capital negative ¥404m. Conversely, interest-bearing debt was modest at ¥173m, equal to 0.97x EBITDA, and cash covered short-term loans by 6.42x. Full-year forecast progress is broadly on track, with Q2 revenue and operating-income progress near 50% and ordinary-income progress ahead of the normal halfway point. The FY2026 full-year plan nevertheless implies lower operating income than the prior fiscal year, so maintaining the current operating-margin improvement will be important. The proposed full-year dividend of ¥3.00 per share implies a manageable forecast payout ratio of approximately 33.5%.

Profitability Analysis

The reported annualized ROE is 9.8%, derived through the three-factor DuPont framework from a 6.0% net profit margin, 0.614x annualized asset turnover, and 2.67x financial leverage. The largest contributor to the period-on-period earnings improvement was margin expansion rather than top-line growth: revenue increased 3.4%, while gross profit rose 11.2% and operating income increased 27.2%. Gross-margin expansion to 28.0% from approximately 26.0% indicates improved revenue mix, pricing, project economics, or cost absorption. Operating-margin expansion to 9.2% from approximately 7.5% further indicates that SG&A was controlled relative to gross-profit growth. SG&A rose 4.8% YoY, slightly above sales growth but substantially below the 11.2% increase in gross profit; this is not indicative of adverse operating deleverage. Directors' compensation was ¥31m and commission fees were ¥49m, representing material components of the cost base. The annualized asset turnover of 0.614x remains moderate, reflecting a balance sheet concentrated in property-related fixed assets, lease and guarantee deposits, and investment securities. Financial leverage of 2.67x supports ROE, but it also means returns remain sensitive to asset valuations and the efficiency of the large non-current asset base. The five-factor analysis shows a 9.2% EBIT margin, a favorable interest burden of 1.084, and a tax burden of 0.604. The interest burden above 1.0 reflects net non-operating income rather than financial strain, while interest expense was contained at ¥9m. EBITDA was ¥178m and the EBITDA margin was 14.5%, providing a stronger view of operating cash earnings than the 9.2% EBIT margin. There was no reported goodwill amortization effect within EBITDA, and intangible assets were only 1.6% of total assets, limiting JGAAP goodwill-accounting distortion. The current profitability profile is improved, but ordinary-income growth is materially amplified by non-operating items and should not be extrapolated solely from the 466.6% YoY increase.

Growth Assessment

Revenue growth of 3.4% YoY was moderate, but the conversion of revenue into gross profit and operating income improved significantly. The company generated ¥41m of incremental gross profit on ¥41m of additional revenue, highlighting a favorable change in gross-profit generation during the period. Operating income increased by ¥24m YoY, with the operating margin improving by 169bp. Ordinary income rose by ¥115m YoY, exceeding operating-income growth because non-operating income increased by ¥41m while non-operating expenses declined by ¥50m. Accordingly, the improvement in ordinary income is less recurring in character than the operating-margin expansion. Net income of ¥74.8m was supported by the higher ordinary-income base but reduced by ¥17m of extraordinary losses and a 39.0% effective tax rate. Full-year revenue guidance is ¥2.500bn, and Q2 cumulative revenue represents 49.3% of the annual target, broadly consistent with the standard 50% Q2 progress rate. Q2 operating income represents 49.1% of the ¥230m full-year operating-income forecast, also essentially in line with normal seasonal progress. Ordinary income represents 57.9% of the ¥240m full-year forecast, 7.9 percentage points ahead of the standard Q2 pace. Net income attributable to owners represents 51.4% of the ¥144m full-year forecast, modestly ahead of the 50% benchmark. The company forecasts FY2026 revenue growth of 0.9% and operating-income decline of 21.0% for the full year, implying a more demanding second-half operating environment than the first-half margin trend suggests. The second half therefore needs to sustain the gross-margin improvement while avoiding a reversal in the favorable non-operating-income and expense balance.

Financial Health

Financial health is mixed: leverage based on interest-bearing debt is low, but short-term liquidity is weak. The current ratio was 58.7% and the quick ratio was also 58.7%, both materially below 1.0x and below the healthy benchmarks. This is an explicit liquidity warning because current assets of ¥575m did not cover current liabilities of ¥979m, resulting in negative working capital of ¥404m. Current liabilities include ¥443m of other accounts payable and ¥213m of other current liabilities, making the company reliant on ongoing cash inflows and the stability of these operating or contractual liabilities. Cash and deposits were ¥396m, equivalent to 6.42x short-term loans of ¥62m. Cash also provides coverage for current portions of long-term borrowings and bonds, although the low current ratio remains a maturity-mismatch risk when assessed against total current liabilities. Interest-bearing debt was ¥173m, comprising ¥62m of short-term loans and ¥111m of long-term loans, before considering bonds and lease obligations. Debt/EBITDA was a conservative 0.97x, debt/capital was 10.3%, and EBITDA interest coverage was strong at 20.24x. EBIT interest coverage was also adequate at 12.83x. The reported debt-to-equity ratio of 1.67x is below the 2.0x aggressive-leverage warning threshold, although the ratio reflects broader liabilities rather than only financial debt. Total liabilities represented 62.5% of assets, while equity represented 37.5%, up from 35.1% in the prior-year period. Short-term loans declined 27.2% YoY to ¥62m and long-term loans declined 37.2% YoY to ¥111m, reflecting debt reduction and improving the financial-debt profile. Investment securities increased ¥120m YoY to ¥815m and represented 20.3% of total assets, increasing exposure to market-value movements. Positive securities valuation differences of ¥82m increased accumulated other comprehensive income and contributed to total equity of ¥1.505bn. Lease obligations totaled approximately ¥50m, representing an additional fixed payment obligation alongside borrowings and bonds.

Notable B/S Changes

Investment securities: +¥120m (+17.2%) to ¥815m, representing 20.3% of total assets; greater exposure to securities-market valuation movements, with positive valuation differences supporting equity during the period. Long-term loans: -¥66m (-37.2%) to ¥111m; debt repayment improved long-term financial leverage and refinancing exposure. Short-term loans: -¥23m (-27.2%) to ¥62m; reduced short-term borrowing supports the debt profile, although overall current-ratio liquidity remains weak. Accounts payable: -¥3m (-26.9%) to ¥9m; lower trade payables did not provide a material source of operating-cash-flow support. Total equity: +¥117m (+8.4%) to ¥1.505bn; net income and positive securities valuation differences improved the equity base and capital adequacy. Accumulated other comprehensive income: improved from -¥8m to +¥82m; the ¥90m swing was principally associated with securities valuation changes and increases sensitivity of equity to market prices.

Cash Flow Quality

Cash-flow quality was favorable in the first half. Operating cash flow was ¥137m, or 1.85x net income of ¥74.8m, comfortably above the 0.8x earnings-quality warning threshold. The negative accruals ratio of -1.6% also indicates that reported earnings were supported by cash conversion rather than by aggressive accrual accumulation. Cash conversion, measured as operating cash flow divided by EBITDA, was 0.77x; this is below the 0.9x excellent benchmark but remains above the 0.7x concern threshold. Trade receivables decreased by ¥11m in the operating cash-flow statement, contributing to cash generation rather than indicating receivables-led earnings. Trade payables decreased by ¥3m, meaning operating cash flow was not dependent on a material extension of supplier payment terms. Taxes paid were ¥38m and interest paid was ¥9m, both absorbed within positive operating cash generation. Capital expenditure was only ¥3m, equal to 0.04x depreciation and amortization of ¥65m. This is an explicit underinvestment warning: the company is replenishing only a very small portion of the depreciation charge through current-period capital spending. In a property-related business with ¥1.346bn of property, plant and equipment, prolonged capex below depreciation can defer maintenance, refurbishment, systems renewal, or asset renewal needs. Reported free cash flow of ¥208m was boosted by ¥71m of investing cash inflow. The investing inflow included ¥10m of proceeds from property sales and recoveries of loans receivable, while property and intangible-asset purchases totaled only ¥4m. A more conservative operating free-cash-flow measure of operating cash flow less capital expenditure was approximately ¥134m and remained positive. Financing cash flow was negative ¥227m, mainly reflecting ¥80m of long-term loan repayments, ¥23m of short-term loan reduction, ¥20m of bond redemption, ¥48m of dividend payments, and other financing outflows. Cash decreased by ¥18m overall, a modest decline given the scale of debt repayment and shareholder distributions.

Dividend Sustainability

No Q2 dividend was declared. The full-year forecast specifies a ¥3.00 dividend per share. Against forecast EPS of ¥8.96, the implied dividend payout ratio is approximately 33.5%, below the 60% sustainability benchmark. Using approximately 16.0 million average shares, the indicated annual cash dividend would be about ¥48m. This is broadly comparable with ¥48m of cash dividends paid during the first half. Operating cash flow of ¥137m exceeded the cash dividend paid by approximately 2.9x. Conservative operating free cash flow after capital expenditure was approximately ¥134m, also covering the indicated annual dividend amount. The balance-sheet liquidity position remains a constraint on capital allocation because working capital was negative ¥404m and the current ratio was 58.7%. However, low interest-bearing debt, strong interest coverage, and ongoing operating cash generation support the current dividend framework. The sustainability of dividends will depend on retaining positive operating cash flow and avoiding a substantial increase in maintenance or renewal capital expenditure after the current period's exceptionally low capex.

Risk Assessment

Business risks include Real-estate and property-market sensitivity: the asset base includes ¥1.346bn of PPE, including land of ¥527m and buildings and structures of ¥745m, making earnings and asset values sensitive to property-market conditions, construction costs, tenant demand, and property transaction activity., Investment-security valuation risk: investment securities increased to ¥815m, or 20.3% of total assets. Securities valuation gains supported other comprehensive income during the period, and a market reversal could reduce equity and comprehensive income., Earnings-mix risk: ordinary-income growth was materially assisted by a ¥41m increase in non-operating income and a ¥50m decline in non-operating expenses. This contribution may be less repeatable than the improvement in operating profit., Asset-maintenance risk: capex of ¥3m versus ¥65m of depreciation, a 0.04x ratio, raises the risk that maintenance, refurbishment, technology, or asset-renewal needs are deferred., Industry-specific interest-rate risk: higher interest rates can increase property financing costs, pressure asset values, and weaken transaction or tenant demand even though current interest coverage is strong..

Financial risks include Low liquidity: the current and quick ratios were both 0.59x, with negative working capital of ¥404m. Current assets do not fully cover current liabilities., Maturity mismatch risk: current liabilities of ¥979m materially exceed cash and deposits of ¥396m, requiring dependable operating cash inflows and liability management., Capital-market risk: the company's 37.5% equity ratio has improved, but liabilities still account for 62.5% of assets and investment-security valuation movements can affect capital., Fixed payment obligations: borrowings, bonds, and lease liabilities create contractual payment requirements, although debt/EBITDA of 0.97x and EBITDA interest coverage of 20.24x currently provide substantial headroom..

Key concerns include Highest priority — liquidity: the sub-1.0x current ratio is the most immediate financial constraint despite ample cash coverage of short-term loans., High priority — capital renewal: capex/depreciation of 0.04x is materially below the 0.7x underinvestment threshold and needs to be evaluated against the condition and investment needs of the property and operating asset base., Medium priority — sustainability of ordinary-income outperformance: Q2 ordinary-income progress is ahead of plan, but non-operating factors explain a meaningful portion of the YoY improvement., Medium priority — second-half margin delivery: operating-income progress is near 50%, while full-year guidance implies a 21.0% operating-income decline, making the outlook dependent on management's assumptions for the second half..

Investment Implications

Key takeaways include First-half operating execution improved, with revenue up 3.4%, gross margin up approximately 200bp, and operating margin up approximately 169bp., Cash realization was strong: operating cash flow was ¥137m and 1.85x net income., Financial debt metrics are conservative, with debt/EBITDA of 0.97x and EBITDA interest coverage of 20.24x., Liquidity is weaker than solvency, as reflected in a 58.7% current ratio and negative working capital of ¥404m., The full-year ¥3.00 per-share dividend appears covered by forecast earnings and current operating cash flow, but liquidity discipline and future capex requirements remain relevant..

Metrics to watch include Current ratio, quick ratio, cash balance, and the composition of other accounts payable and other current liabilities, Operating margin and gross margin in the second half, Recurring operating income relative to non-operating income and expenses, Operating cash flow relative to EBITDA and net income, Capex/depreciation and property-asset renewal requirements, Investment-security valuation changes and their impact on accumulated other comprehensive income and equity, Progress toward full-year operating-income guidance of ¥230m and net-income guidance of ¥144m.

Regarding relative positioning, The company combines good-range operating profitability and strong financial-debt serviceability with below-benchmark short-term liquidity. Its annualized ROE of 9.8% is below the 10-15% good-range benchmark but above the sub-8% concern level, while the EBITDA margin of 14.5% and low debt/EBITDA compare favorably with highly leveraged property businesses. The principal relative weakness is liquidity management and unusually low reinvestment relative to depreciation.