TOKYU CORPORATION FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥58.88B
• Net Income: ¥50.19B
• EPS: ¥98.14

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

Tokyu Corporation (9005) reported FY2026 Q2 consolidated results under JGAAP with operating income of JPY 58.88 billion (−9.9% YoY), ordinary income of JPY 70.15 billion, and net income attributable to owners of the parent of JPY 56.24 billion (+13.7% YoY). Revenue, gross profit, and cash flow line-items were not disclosed in the provided XBRL mapping, so margin and cash conversion metrics based on sales or OCF cannot be assessed from this dataset. Despite a softer operating line, ordinary income exceeded operating income by approximately JPY 11.27 billion, indicating sizable non-operating gains (e.g., equity-method income, dividends, and/or other financial income) that more than offset interest expense of JPY 4.30 billion. Net income grew double digits YoY, suggesting improved below-operating-line contributions and/or lower exceptional charges compared to the prior year. The company’s balance sheet remains substantial with total assets of JPY 2.761 trillion and total equity of JPY 906.40 billion, implying an equity ratio of roughly 32.8% (calculated), as the reported 0.0% equity ratio is a non-disclosure placeholder. Current assets were JPY 459.50 billion versus current liabilities of JPY 719.73 billion, resulting in a current ratio of 0.64x and negative working capital of JPY −260.23 billion—typical for railway-and-real-estate conglomerates that operate with large deferred revenues and stable cash generation. Financial leverage (assets/equity) stands at about 3.05x, consistent with the capital-intensive nature of rail and real estate operations. Interest coverage is solid at approximately 13.7x, calculated as operating income divided by interest expense, indicating healthy ability to service debt. EPS was JPY 98.14; based on net income, this implies roughly 573 million average shares outstanding, though the share count was not explicitly disclosed in this dataset. Tax expense was JPY 17.64 billion; because income before taxes was not provided, the effective tax rate cannot be reliably derived from the available figures. Cash flow statements were not disclosed (all zeros are placeholders), preventing an assessment of operating cash flow and free cash flow trends for the period. Dividend data are also not available in this extract; consequently, payout ratios and FCF coverage cannot be evaluated. Overall, Tokyu delivered resilient bottom-line growth despite lower operating profit, supported by robust non-operating contributions and manageable financial risk metrics. Key monitoring points include the sustainability of non-operating gains, trajectory of operating recovery in core transport and real estate segments, and liquidity management given negative working capital and ongoing capex needs. Data limitations in revenue and cash flows constrain margin, cash conversion, and DuPont decomposition analysis, so conclusions are necessarily provisional.

Profitability Analysis

ROE_decomposition: A full DuPont analysis is constrained by missing revenue and average equity. Using period-end equity as a rough proxy, semiannual ROE ≈ 56.24 / 906.40 ≈ 6.2%; annualized this implies ~12–13%, conditional on H2 performance. Financial leverage is approximately 3.05x (assets/equity). Net margin and asset turnover cannot be computed due to undisclosed revenue. margin_quality: Operating income declined 9.9% YoY to JPY 58.88b, but net income rose 13.7% YoY to JPY 56.24b, indicating that below-OP items (non-operating gains, lower special losses) improved. Ordinary income exceeded OP by ~JPY 11.27b even after JPY 4.30b interest expense, evidencing healthy non-operating contributions. Gross margin and EBITDA margin cannot be assessed from the dataset. operating_leverage: The decline in operating income despite net income growth suggests mixed operating leverage in H1. Without revenue, we cannot quantify sensitivity; however, transport and real estate typically exhibit high fixed costs, so demand recovery or leasing progress materially impacts OP. The positive delta between ordinary and operating income cushions leverage cyclicality.

Growth Assessment

revenue_sustainability: Revenue was not disclosed in this dataset, limiting assessment of topline trajectory. Tokyu’s diversified base (rail, bus, retail, real estate, hotels) typically provides multi-pillar revenue; sustainability hinges on commuter traffic normalization, inbound tourism, and property leasing/sales. profit_quality: YoY NI growth despite OP decline points to reliance on non-operating items in H1 FY2026. Ordinary income outperformance (OI to OI gap ~JPY 11.27b) suggests recurring financial/associate income played a strong role; sustainability depends on the persistence of equity-method and financial gains. outlook: Assuming steady mobility demand and stable real estate conditions, H2 should benefit seasonally. Key swing factors are passenger volumes, hotel occupancy/ADR, and real estate handovers. Non-operating tailwinds may moderate, so OP recovery will be important to maintain FY momentum.

Financial Health

liquidity: Current assets JPY 459.50b vs current liabilities JPY 719.73b implies a current ratio of 0.64x and quick ratio of ~0.63x (inventories are small at JPY 9.36b). Negative working capital (−JPY 260.23b) is typical for the sector and manageable if operating cash inflows remain stable. solvency: Total assets JPY 2.761t; total equity JPY 906.40b → equity ratio ≈ 32.8% (calculated). Debt-to-equity is shown as 2.02x (likely total liabilities/equity proxy). Interest coverage is robust at ~13.7x, indicating healthy capacity to service interest. capital_structure: Leverage at ~3.05x assets/equity reflects capital intensity. Interest-bearing debt split and maturity ladder were not disclosed here; refinancing risk should be monitored amid interest-rate normalization. Equity base appears solid relative to asset scale.

Cash Flow Quality

earnings_quality: In the absence of disclosed OCF, we cannot validate accrual quality or OCF/NI conversion. The divergence between OP (down) and NI (up) highlights reliance on non-operating items in H1; recurring cash generation from core operations remains the key indicator to track. FCF_analysis: Investing and financing cash flows were not disclosed. Capex intensity for rail infrastructure and real estate is typically high; FCF is sensitive to development cycles and rail renewal capex. Without data, FCF coverage of obligations cannot be assessed. working_capital: Negative working capital (−JPY 260.23b) is consistent with advance receipts/deferred revenue structures. Inventory is modest (JPY 9.36b), suggesting limited exposure to obsolescence; receivables and payables detail is not provided.

Dividend Sustainability

payout_ratio_assessment: Annual DPS and payout ratio are not disclosed in this dataset. Based on EPS of JPY 98.14 for H1, annualized earnings capacity appears healthy, but actual dividend policy cannot be inferred from these figures alone. FCF_coverage: OCF and FCF are undisclosed; therefore, dividend coverage by FCF cannot be evaluated. Historically for major private railways, dividends target stability; confirmation requires management guidance and full cash flow statements. policy_outlook: Given net income growth and solid interest coverage, capacity exists to maintain distributions, but the absence of CF data and formal guidance in this extract necessitates caution. Monitor full-year results and capital allocation updates.

Risk Assessment

Business Risks:

• Passenger volume sensitivity to macro conditions, remote work, and demographic trends
• Tourism and hotel demand volatility affecting non-commuter and hospitality earnings
• Real estate sales timing and leasing conditions impacting earnings recognition
• Construction cost inflation and supply chain constraints affecting project margins
• Regulatory changes in transportation fares or safety requirements
• Natural disasters and accidents disrupting operations and incurring restoration costs

Financial Risks:

• Refinancing and interest rate risk amid rising or volatile rates
• High capital expenditure requirements for rail maintenance and property development
• Reliance on non-operating income (equity-method, financial) to support earnings
• Negative working capital necessitating careful liquidity management
• Potential impairment risk on property/transport assets in downturns

Key Concerns:

• Operating income declined 9.9% YoY despite net income growth
• Revenue and cash flow data not disclosed, limiting visibility on core margin and cash conversion
• Ordinary income dependence on non-operating gains may not be fully sustainable

Investment Implications

Key Takeaways:

• Net income rose 13.7% YoY to JPY 56.24b despite a 9.9% YoY decline in operating income
• Ordinary income exceeded operating income by ~JPY 11.27b, underscoring strong non-operating contributions
• Interest coverage is healthy at ~13.7x; leverage (A/E ~3.05x) is typical for the sector
• Calculated equity ratio ~32.8% indicates a solid capital base
• Liquidity metrics show negative working capital (−JPY 260.23b), consistent with sector norms
• Limited disclosure on revenue and cash flows constrains margin and FCF analysis

Metrics to Watch:

• Full revenue and segment OP trends (transport, real estate, hotel/retail)
• Operating cash flow and capex to assess FCF sustainability
• Non-operating income components (equity-method earnings, financial income) and durability
• Passenger traffic volumes, hotel occupancy/ADR, and real estate leasing/sales progress
• Interest-bearing debt, average funding cost, and maturity profile
• Guidance revisions and dividend policy updates for FY2026

Relative Positioning: Within Japan’s private railway and urban development peers, Tokyu typically benefits from strong urban rail corridors and meaningful real estate exposure; leverage and liquidity metrics are in line with sector norms, and ordinary income resilience appears solid this half, though visibility on core margin recovery is constrained by disclosure gaps.

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