Global One Real Estate Investment Corporation FY2025 Q4 Earnings Report

Financial Highlights

• Operating Income: ¥4.20B
• Net Income: ¥3.81B

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Global One Real Estate Investment Corporation (J-REIT) reported FY2025 Q4 results under JGAAP (non-consolidated) with several key items not disclosed under standard XBRL tags (notably revenue and certain per-share data), necessitating analysis based on the available non-zero metrics. Operating income was ¥4,202,992 thousand, with ordinary income of ¥3,813,713 thousand and net income of ¥3,812,515 thousand, indicating a narrow gap between operating and bottom-line results given low taxes typical for J-REITs. Depreciation and amortization totaled ¥860,339 thousand, supporting a solid EBITDA proxy of ¥5,063,331 thousand. Interest expense was ¥300,431 thousand, yielding strong debt service capacity given the provided interest coverage of 14.0x. Total assets stood at ¥204,347,683 thousand, with total liabilities of ¥101,662,546 thousand and equity of ¥102,685,137 thousand, implying a computed equity ratio near 50% despite the equity ratio being shown as 0.0% (undisclosed). Liquidity looks robust with current assets of ¥31,583,317 thousand versus current liabilities of ¥13,487,211 thousand (current ratio 234.2%), and working capital of ¥18,096,106 thousand. Operating cash flow was very strong at ¥24,084,464 thousand, substantially exceeding net income (OCF/NI of 6.32x), suggesting positive non-cash adjustments and/or favorable working capital movements. Investing cash flow was shown as zero, implying no property acquisitions or disposals within the period per this dataset; financing cash flow was a net outflow of ¥5,249,141 thousand, likely reflecting a combination of distributions and/or net debt reduction. Dividend per share and payout metrics are not disclosed in this dataset; however, as a J-REIT, the entity typically targets high distribution of distributable income for tax pass-through status. DuPont components that rely on revenue (net margin and asset turnover) are not meaningful due to undisclosed revenue, but leverage (assets/equity) is approximately 1.99x. On an indicative basis, ROE proxied as net income over equity is roughly 3.7%, consistent with stabilized core J-REIT returns under low-rate environments. The effective tax rate is close to zero, consistent with J-REIT tax treatment when meeting distribution requirements. Overall, the profile points to stable core earnings, strong liquidity, moderate leverage for a J-REIT, and conservative cash generation, albeit with constrained visibility on rental revenue, occupancy, and distributable cash specifics due to data gaps.

Profitability Analysis

ROE decomposition is constrained by undisclosed revenue. Using a proxy: ROE ≈ NI/Equity = ¥3,812,515k / ¥102,685,137k ≈ 3.7%. Financial leverage (Assets/Equity) is 1.99x, indicating moderate balance-sheet leverage for a J-REIT. Net profit margin and asset turnover in the provided DuPont are shown as 0%/0x due to unreported revenue; thus, DuPont-calculated ROE of 0% is not decision-useful. Operating income of ¥4,203m versus depreciation of ¥860m yields EBITDA of ¥5,063m, implying a meaningful non-cash component typical of real estate. Interest expense of ¥300m is well covered; provided interest coverage is 14.0x (our simple EBITDA/interest check suggests ~16–17x), both indicating ample cushion. Operating leverage appears manageable; fixed costs are largely interest and property-level expenses embedded in operating line items, but without revenue detail, margin quality (e.g., NOI margin) cannot be quantified. The minimal delta between ordinary income (¥3,814m) and net income (¥3,813m) suggests limited non-operating drag and negligible taxes. Effective tax rate near 0% aligns with pass-through distributions. Overall profitability appears steady and consistent with a stabilized portfolio, though absence of rent/NOI data limits deeper margin diagnostics.

Growth Assessment

Top-line growth cannot be assessed because revenue is undisclosed; the +0.0% YoY flags in the dataset indicate lack of reported comparatives, not flat growth. Operating income YoY is also tagged as +0.0% (undisclosed), preventing trend analysis. With no investing cash outflows, the period likely lacked acquisitions, suggesting organic growth (via rent revisions, occupancy, and cost control) was the main driver. EBITDA of ¥5.06bn against interest of ¥0.30bn indicates headroom to pursue growth when opportunities arise. Profit quality appears high as ordinary income closely tracks operating income and taxes are minimal. The strong OCF (¥24.08bn) relative to NI likely reflects working capital movements (e.g., tenant/security deposits, accrued expenses) and non-cash items; sustainability of this elevated OCF run-rate should be treated cautiously without itemized details. Outlook depends on leasing momentum, rent revision cycles, asset reversion potential, and external growth via acquisitions; none are discernible from this dataset. In the current rate environment, external growth may be selective, but the balance sheet (equity ratio ~50%) provides capacity. Absent disclosed occupancy and leasing spreads, we assume portfolio stability with modest organic growth potential typical of core J-REITs. Key growth swing factors will be acquisition pipeline, funding costs, and asset recycling opportunities.

Financial Health

Liquidity is strong: current assets ¥31.58bn vs current liabilities ¥13.49bn, yielding a current and quick ratio of 234.2% and working capital of ¥18.10bn. Solvency appears sound: equity ¥102.69bn vs liabilities ¥101.66bn, implying a computed equity ratio ~50.2% (despite a reported 0.0% placeholder), and a debt-to-equity ratio of 0.99x. Interest burden is modest with ¥300m interest and coverage of 14.0x. The liability structure (loan mix, maturities, hedges) is not disclosed; therefore, refinancing risk and floating-rate exposure cannot be quantified. With total assets at ¥204.35bn, leverage is moderate for a J-REIT, likely leaving headroom for selective growth or buffer against valuation volatility. Effective tax near zero suggests ongoing compliance with distribution requirements. Overall, liquidity and solvency metrics indicate resilience, though deeper insight into interest-bearing debt composition and covenant headroom is not available in this dataset.

Cash Flow Quality

Earnings quality appears strong: OCF/NI is 6.32x (¥24,084m / ¥3,813m), reflecting significant non-cash depreciation and favorable working capital effects common in real estate vehicles. EBITDA of ¥5,063m vs OCF of ¥24,084m implies sizable timing/working capital items (e.g., deposits, payables), which may not recur annually at this magnitude; hence, OCF normalization is a consideration. Investing cash flow is shown as zero, indicating no acquisitions/disposals in the period per this data, so Free Cash Flow reported as zero is not decision-useful; true FCF should adjust for maintenance capex and acquisitions, which are undisclosed. Financing cash flow outflow of ¥5,249m likely comprises distributions and/or debt repayments; the lack of DPS and unit count data prevents precise allocation. Working capital is positive at ¥18,096m, supporting near-term funding of operations and distributions. Overall, cash conversion looks healthy, but sustainability of elevated OCF hinges on the persistence of working capital inflows and stable occupancy.

Dividend Sustainability

Dividend data (DPS, payout, FCF coverage) are undisclosed in this dataset and shown as zeros by placeholder. As a J-REIT, the entity typically distributes the bulk of distributable income to maintain tax pass-through status, implying high payout of earnings adjusted for special items. Using available figures, net income of ¥3,813m and robust OCF of ¥24,084m suggest ample capacity to fund distributions; however, distributable cash differs from accounting NI and can be influenced by retained reserves, asset sales gains, and repair costs. Financing cash outflow of ¥5,249m may include distributions, but the split with debt movements is not provided. Without DPS and unit count, payout ratio and per-unit distribution cannot be assessed. Policy-wise, we assume continued commitment to stable distributions subject to earnings, occupancy, and financing costs. Coverage by cash appears comfortable, but a rigorous assessment requires itemized distributable cash flow and capex maintenance needs.

Risk Assessment

Business Risks:

• Occupancy and rent revision risk across the portfolio amid macro softness or tenant churn
• Concentration risk if assets or tenant base are not well diversified (not disclosed here)
• Valuation risk from property appraisal declines affecting NAV and leverage metrics
• Limited external growth if acquisition pipeline is constrained or accretive deals are scarce
• Regulatory/tax risks affecting J-REIT distribution requirements or property taxes

Financial Risks:

• Interest rate risk impacting funding costs and earnings spread; hedge ratios unknown
• Refinancing risk on upcoming maturities; debt ladder and covenants not disclosed
• Potential LTV sensitivity to asset revaluations; portion of interest-bearing debt not itemized
• Working capital timing reversals that could normalize OCF below current period
• Dependence on capital markets for growth funding at acceptable spreads

Key Concerns:

• Material data gaps: revenue, DPS, unit count, and detailed debt profile not disclosed
• DuPont margin and turnover metrics are not meaningful due to undisclosed revenue
• Sustainability of elevated OCF is uncertain given likely working capital effects
• Lack of acquisition/disposal detail limits visibility on external growth strategy

Investment Implications

Key Takeaways:

• Core earnings appear stable: operating income ¥4.20bn, net income ¥3.81bn with minimal non-operating drag
• Liquidity is strong (current ratio 234%) and balance-sheet leverage is moderate (~50% equity ratio; D/E ~0.99x)
• Interest coverage is robust at 14.0x, supporting resilience to rate volatility
• OCF substantially exceeds NI (6.3x), but likely aided by working capital inflows
• No investing CF suggests no acquisitions this period; growth likely organic
• Dividend specifics are undisclosed; as a J-REIT, high payout is typical but cannot be quantified here

Metrics to Watch:

• Occupancy, leasing spreads, and NOI growth (currently undisclosed)
• Debt ladder, hedge ratio, and average interest cost to gauge rate/refinancing risk
• LTV and appraisal NAV trends versus market cap (NAV not provided here)
• Distributable cash flow and DPS trajectory (payout policy execution)
• Asset recycling and acquisition pipeline (investing CF and portfolio turnover)
• Working capital movements to assess sustainability of elevated OCF

Relative Positioning: Based on available metrics, the REIT exhibits stronger-than-average liquidity and interest coverage with moderate leverage near sector norms; however, limited disclosure on revenue/NOI, DPS, and debt structure makes its relative growth and income profile versus J-REIT peers indeterminate from this dataset alone.

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