| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue | ¥3324.2B | ¥3193.1B | +4.1% |
| Operating Income | ¥339.7B | ¥360.1B | -5.6% |
| Ordinary Income | ¥586.0B | ¥617.5B | -5.1% |
| Net Income | ¥400.8B | ¥694.0B | -42.2% |
| ROE | 7.0% | 13.2% | - |
For the fiscal year ended March 2026, Revenue was ¥3324.2B (YoY +¥131.1B +4.1%), Operating Income was ¥339.7B (YoY -¥20.4B -5.6%), Ordinary Income was ¥586.0B (YoY -¥31.5B -5.1%), and Net income attributable to owners of parent was ¥400.8B (YoY -¥293.2B -42.2%), representing a year of higher revenue but lower profit. Operating margin deteriorated to 10.2% from 11.3% a year earlier (-1.1pt), primarily because the Transportation segment, which accounts for 62% of revenue, could not absorb rising costs and saw its margin fall to 8.6% (YoY -1.7pt). Ordinary Income was supported by equity-method investment income of ¥251.2B (equivalent to 86% of non-operating income), while the large decline in Net Income reflects the absence of prior-year one-off gains (such as ¥531.6B gain on sale of subsidiary shares).
【Revenue】Revenue totaled ¥3324.2B (+4.1%), an increase. By segment, Transportation was ¥2050.9B (+4.4%) accounting for 61.7% of the total, driven by passenger demand recovery. Real Estate was ¥312.6B (+7.7%) with expansion in both leasing and sales; Construction was ¥180.9B (+6.8%) aided by increased order intake. Retail was ¥588.5B (+2.0%) with modest growth, and Leisure was ¥138.6B (+6.5%) maintaining solid performance. All segments posted revenue increases, indicating resilient topline growth.
【Profitability】Operating Income was ¥339.7B (-5.6%). Transportation Operating Income fell substantially to ¥175.9B (-12.9%), with margin deteriorating to 8.6% (from 10.3% the prior year, -1.7pt). Rising labor, electricity and maintenance costs outpaced fare pass-through, limiting operating leverage. Retail Operating Income fell to ¥2.5B (-42.8%), with margin declining to 0.4%, continuing a low-profit structure. Conversely, Real Estate maintained high profitability with Operating Income of ¥115.6B (+2.4%) and a 37.0% margin; Construction improved to ¥26.0B (+9.7%) with a 14.3% margin. Ordinary Income of ¥586.0B (-5.1%) partly offset operating decline due to equity-method investment income of ¥251.2B. Net Income declined sharply to ¥400.8B (-42.2%) as prior-year special gains of ¥588.0B (including ¥531.6B gain on sale of subsidiary shares) did not recur; this period recorded special gains of ¥46.9B and special losses of ¥48.1B, effectively offsetting each other and resulting in a large reduction from Ordinary Income to Net Income. In conclusion, the results show higher revenue but lower profit, driven by deterioration in core operating profitability and the disappearance of one-off items.
Transportation (Revenue ¥2050.9B +4.4%, Operating Income ¥175.9B -12.9%, Margin 8.6%) saw margin decline despite revenue growth, down 1.7pt from 10.3% due to increases in labor, electricity and maintenance costs exceeding fare pass-through and weak operating leverage. Retail (Revenue ¥588.5B +2.0%, Operating Income ¥2.5B -42.8%, Margin 0.4%) continues a low-profit structure. Real Estate (Revenue ¥312.6B +7.7%, Operating Income ¥115.6B +2.4%, Margin 37.0%) maintains high profitability with solid leasing and sales. Construction (Revenue ¥180.9B +6.8%, Operating Income ¥26.0B +9.7%, Margin 14.3%) saw margin improvement from increased construction orders. Leisure (Revenue ¥138.6B +6.5%, Operating Income ¥15.0B -2.1%, Margin 10.8%) had revenue growth with slight profit decline. The deterioration in Transportation margins, which account for the majority of corporate profit, is the main cause of consolidated operating profit decline, while Real Estate and Construction provide a buffer.
【Profitability】Operating margin was 10.2%, down 1.1pt from 11.3% a year ago. Net profit margin fell to 12.1% (prior year 21.7%) largely due to the disappearance of special gains; Ordinary Income margin remained stable at 17.6%. ROE remained at 7.0%, which can be decomposed as Net profit margin 14.4% × Total asset turnover 0.28 × Financial leverage 2.05x, indicating room for improvement in both profitability and turnover. 【Cash Quality】Operating Cash Flow (OCF) was ¥414.5B, 1.03x Net Income, which is healthy, but corporate tax payments of ¥285.0B are heavy against OCF subtotal of ¥674.5B, and the cash conversion ratio (OCF/EBITDA) is only 61%. Accrual ratio was -0.6%, a good level. 【Investment Efficiency】Total asset turnover is low at 0.28x, reflecting the capital-intensive nature with a fixed asset ratio of 90.6%. Investing Cash Flow was -¥755.4B, executing investments at 2.2x depreciation of ¥341.6B, indicating a growth investment phase. 【Balance Sheet Health】Equity Ratio improved to 48.7% from 48.0% a year ago; Debt/EBITDA is 2.75x, within investment-grade range. However, Current Ratio is 43.1% and Quick Ratio 42.2%, extremely low, and Cash/Short-term debt is 0.13x, raising short-term liquidity concerns. EBITDA interest coverage is 19.9x, indicating strong interest resilience.
OCF was ¥414.5B (YoY +0.7%), effectively the level after deducting corporate tax payments of ¥285.0B from OCF subtotal of ¥674.5B. OCF/Net Income is 1.03x, which is healthy, but cash conversion ratio relative to OCF subtotal is 61% owing to tax burden and working capital movements. Investing Cash Flow was a large outflow of -¥755.4B, primarily for acquisition of tangible fixed assets of ¥840.1B (railway equipment, real estate development, etc.). Construction burden receipts of ¥126.1B partially offset investments, but net investment reached 2.2x depreciation of ¥341.6B, indicating aggressive spending on both renewal and growth. As a result, Free Cash Flow was negative at -¥340.9B. Financing Cash Flow was +¥169.5B, funded by long-term borrowings of ¥262.8B and bond issuance of ¥99.5B, while long-term borrowings repayments of -¥258.9B and dividend payments of -¥116.7B were made. Cash and cash equivalents decreased by -¥171.4B from ¥513.7B at the beginning of the period to ¥342.3B at the end, with expanded investments and tax payments depleting the cash buffer. Given the thin short-term liquidity (Current Ratio 43.1%, Cash/Short-term debt 0.13x), smoothing investment levels and strengthening OCF will be key to stabilizing funding.
Of Ordinary Income ¥586.0B, Operating Income accounted for ¥339.7B, and equity-method investment income of ¥251.2B was added at the ordinary stage, representing 86% of non-operating income of ¥290.7B. Financial income is limited (interest income ¥5.5B, dividend income ¥7.0B), so support for Ordinary Income depends on the earnings performance of affiliates. Special gains and losses largely offset each other (gains ¥46.9B, losses ¥48.1B), including gains on sale of investment securities ¥0.1B, impairment losses ¥18.1B, and loss on retirement of fixed assets ¥15.9B. Last year’s special gains of ¥588.0B (including ¥531.6B gain on sale of subsidiary shares) significantly boosted Net Income, but their absence this year caused Net Income to converge to the level after an effective tax rate of approximately 31.5% applied to Ordinary Income. OCF of ¥414.5B is 1.03x Net Income and OCF/EBITDA is 61%, indicating average cash realization, but increases in working capital (inventory -¥15.2B, etc.) and tax payments suppressed cash conversion. Recurring earnings derive from operating and equity-method income and are therefore sustainable; one-off effects concentrated in the prior year, and this year’s earnings quality is stable.
Full year forecast: Revenue ¥3598.0B, Operating Income ¥310.0B (-8.8%), Ordinary Income ¥505.0B (-13.8%), Net income attributable to owners of parent ¥393.0B. Versus results (Revenue ¥3324.2B, Operating Income ¥339.7B, Ordinary Income ¥586.0B, Net Income ¥400.8B), the company expects Revenue growth of +8.2% but plans a conservative decline in Operating Income. Progress rates show Operating Income at 109.6% (already exceeded), Ordinary Income 116.0%, and Net Income 102.0%, indicating targets have effectively been met. The company’s plan likely incorporates continued cost increases in H2 and smoothing of equity-method investment income. Revenue progress is 92.4%, somewhat low, so H2 demand recovery and Real Estate/Construction revenue buildup are key to achieving guidance. EPS forecast is ¥81.49 versus actual ¥99.59; dividend forecast is ¥11.00 versus interim ¥9 and year-end ¥12 for a total of ¥21, so on a realized basis results exceeded forecasts and the plan appears conservative.
Annual dividend is ¥21 (interim ¥9, year-end ¥12), an increase of ¥3 from ¥18 a year earlier. Payout Ratio is 14.6%, conservatively set relative to earnings, providing substantial dividend capacity. Note a 3-for-1 stock split effective January 1, 2025; before split, interim dividend equated to ¥27 and year-end to ¥36. Free Cash Flow was negative at -¥340.9B, so dividend payments of ¥116.7B are not covered by FCF, but OCF of ¥414.5B is 3.6x the dividend and together with cash equivalents of ¥342.3B provides capacity to continue dividends. There were no share buybacks; capital allocation prioritizes dividends and active investment, with Total Return Ratio currently equal to the Payout Ratio of 14.6% only. Next year’s dividend forecast of ¥11 implies a cut, but this reflects normalization after stock split adjustment and is not a substantive reduction. Sustainable dividend levels depend on improvement in OCF and FCF, but given solvency and payout ratio, maintaining current levels is feasible.
Short-term liquidity risk: Current Ratio 43.1%, Quick Ratio 42.2%, Cash/Short-term debt 0.13x are extremely low, with cash of ¥343.9B versus short-term debt of ¥2,574.5B indicating a large shortfall. Negative working capital of -¥1,465.7B indicates maturity mismatch; failure to roll over short-term borrowings of ¥722.5B or CP ¥230.0B or interest rate hikes could strain liquidity. Non-current assets such as investment securities of ¥2812.1B comprise 90.6% of total assets, so monetization in emergencies takes time; securing revolving facilities and committed lines is essential.
Transportation segment margin deterioration risk: Operating Income ¥175.9B (-12.9%), margin 8.6% (YoY -1.7pt) shows substantial decline. Labor, energy and maintenance cost increases have outpaced fare pass-through, limiting operating leverage. Continued wage increases or prolonged high energy costs could further compress margins and weigh on consolidated results. Recovery in demand and fare revision progress are critical, but regulatory and competitive factors could delay improvement.
Investment recovery uncertainty: Investing Cash Flow was -¥755.4B, executing investments at 2.2x depreciation, and Construction in progress stood at ¥966.7B (up 26.2% from ¥765.8B). Large-scale investments in real estate development and railway equipment are underway, but delays in commissioning or unmet demand assumptions could yield returns below expected IRR and prolong FCF deficits. Progress management of projects and responsiveness to market changes are crucial.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 10.2% | 6.3% (3.7%–8.5%) | +3.9pt |
| Net Profit Margin | 12.1% | 2.7% (1.6%–4.7%) | +9.3pt |
Profitability significantly exceeds the transportation industry median, with the high-margin Real Estate segment (37.0% margin) lifting the company average.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 4.1% | 5.0% (-0.4%–9.4%) | -0.9pt |
Revenue growth is slightly below the industry median but within the range and at a standard level.
※Source: Company compilation
Restoring Transportation margins is the top priority: Transportation, which accounts for 62% of revenue, saw Operating Margin decline to 8.6% (YoY -1.7pt), driving consolidated operating profit decline. Fare revisions, sustained demand recovery, and progress on cost reduction initiatives are key to margin recovery; monitoring pricing policy and regulatory developments is important. Equity-method investment income of ¥251.2B, representing 43% of Ordinary Income, indicates high dependence on affiliates’ performance, so the earnings stability of equity-method investees materially underpins consolidated results.
Balancing the investment cycle with liquidity management: Investing Cash Flow of -¥755.4B equals 2.2x depreciation, and Construction in progress has risen to ¥966.7B, indicating a growth investment phase. While real estate and railway infrastructure development are expected to boost future earnings, Free Cash Flow of -¥340.9B and low Current Ratio 43.1% and Cash/Short-term debt 0.13x call for attention to short-term financing. Smoothing investment levels, improving OCF (cash conversion ratio 61%), and securing revolving facilities are keys to stabilizing liquidity.
Dividend capacity and expectations for capital efficiency improvement: Payout Ratio of 14.6% is conservative, and OCF of ¥414.5B is 3.6x the dividend of ¥116.7B, indicating capacity to continue dividends. ROE of 7.0% is relatively low, but as investments come online and Transportation margins recover, mid-term ROE improvement and dividend growth are possible. Post-split dividend policy indicates a stable dividend orientation, and in a recovery phase, dividend increases are likely.
This report is an AI-generated financial analysis document produced by analyzing XBRL earnings release data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by our firm from public financial statements. Investment decisions are your responsibility; consult a professional advisor as needed.