FUJI KYUKO CO.,LTD. FY2027 Q1 Earnings Report

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Executive Summary

Revenue and profit increased, driven by growth in the Leisure & Services segment, the largest of the four segments; however, the decline in Transportation profitability limited the rate of profit growth. Revenue was ¥128.2B (¥123.4B in the same period of the previous year, YoY +3.9%), Operating Income was ¥16.8B (up +0.5%), Ordinary Income was ¥17.3B (up +1.1%), and Net Income attributable to owners of the parent was ¥10.76B (¥10.73B in the previous year, YoY +0.3%). The Operating Margin declined to 13.1% from 13.6% in the previous year, a decrease of 0.5pt, indicating that earnings growth has not kept pace with the increase in revenue.

Factors Affecting Performance

【Revenue】Revenue was ¥128.2B (YoY +3.9%). Leisure & Services generated ¥60.7B (up +8.8%), accounting for the largest share of company-wide revenue (47.3%) and driving overall performance. Transportation recorded ¥49.5B (down -1.4%), representing a decline in revenue; Real Estate recorded ¥5.4B (down -4.1%), also representing a decline; and Other Businesses recorded ¥12.6B (up +6.9%), representing an increase.

【Profit and Loss】Operating Income was ¥16.8B (YoY +0.5%), and the Operating Margin declined to 13.1% from 13.6% in the previous year, a decrease of 0.5pt. While Operating Income in the Transportation segment fell significantly to ¥9.2B (down -29.5%), Leisure & Services posted substantial profit growth to ¥5.6B (up +214.8%), supporting company-wide earnings. Net extraordinary losses were -¥1.04B, primarily due to a ¥1.32B loss on disposal of fixed assets, temporarily weighing on Profit Before Tax; however, the impact was small and limited to a nonrecurring factor. Although revenue and profit increased, the rate of profit growth was limited, with the decline in Transportation’s margin serving as the primary constraint.

Segment Analysis

The composition of segment profit (pre-adjustment total of ¥17.0B) was Transportation 54.1%, Leisure & Services 33.1%, Real Estate 7.6%, and Other Businesses 5.2%. Compared with the revenue composition (Transportation 38.6% and Leisure & Services 47.3%), Transportation’s contribution to profit was relatively high. Transportation’s Operating Income was ¥9.2B (YoY -29.5%), with a profit margin of 18.6%. Although it remained the second-highest-margin business after Real Estate (23.8%), its level declined significantly from the previous year. Leisure & Services had a relatively low profit margin of 9.3%, but Operating Income recorded the strongest growth among the three periods (YoY +214.8%), reflecting the effects of pricing policies and improved utilization rates. Real Estate recorded revenue of ¥5.4B (YoY -4.1%) and Operating Income of ¥1.3B (YoY -1.4%), representing slight declines in both revenue and profit, while maintaining the highest profit margin among all segments at 23.8%. Company-wide profit is most sensitive to margin fluctuations in Transportation, the largest segment by scale.

Key Financial Indicators

【Profitability】The Operating Margin was 13.1% (13.6% in the previous year), down 0.5pt, while the Net Profit Margin, based on net income attributable to owners of the parent, was 8.4%, nearly unchanged from 8.7% in the previous year. 【Cash Quality】Comprehensive Income was ¥17.78B, ¥6.82B higher than consolidated Net Income of ¥10.96B, primarily due to a ¥6.63B valuation difference on investment securities. 【Investment Efficiency】ROE was 2.5%; on a quarterly basis, the low asset turnover ratio, together with the lack of growth in the profit margin, acted as a constraint. 【Financial Soundness】The Equity Ratio was 40.2% (40.7% in the previous year), and the Current Ratio was 164.8% (current assets of ¥286.6B ÷ current liabilities of ¥173.9B), indicating a sound level of short-term payment capacity.

Cash Flow Analysis

Cash and deposits were ¥133.3B, an increase of ¥9.1B from ¥124.2B in the previous year, indicating that the company’s liquidity cushion has been maintained. Accounts receivable were ¥29.7B, down 35.3% from ¥45.95B in the previous year, suggesting progress in the collection of receivables during the period. Meanwhile, inventories were ¥10.4B, up 14.9% from ¥9.0B in the previous year, indicating inventory accumulation ahead of the demand season. Accounts payable were ¥23.5B, down 16.8% from ¥28.2B in the previous year, suggesting that the reduction in trade payables may have acted as a use of cash. Long-term borrowings were ¥307.2B, up 5.1% from ¥292.4B in the previous year, while construction in progress was ¥30.5B, up 21.1% from ¥25.2B in the previous year, indicating that capital investment continues to progress. Overall, the company is characterized by the coexistence of improved collection of operating assets and the use of funds for investment and trade payables.

Quality of Earnings

Non-operating income was ¥1.93B compared with non-operating expenses of ¥1.50B, resulting in only a modest net positive contribution. Interest and dividend income of ¥1.58B exceeded interest expense of ¥1.34B. Extraordinary income was ¥0.59B versus extraordinary losses of ¥1.63B, primarily due to a ¥1.32B loss on disposal of fixed assets. The net extraordinary loss of -¥1.04B temporarily reduced Profit Before Tax, and the difference between Ordinary Income of ¥17.28B and Profit Before Tax of ¥16.25B was primarily attributable to this nonrecurring factor. The effective tax rate was 32.6% (income taxes of ¥5.29B ÷ Profit Before Tax of ¥16.25B), a standard level that did not materially distort the difference between Ordinary Income and Net Income. From an accruals perspective, accounts receivable declined 35.3% from the previous year, suggesting that the timing of revenue recognition and cash collection may be progressing in a consistent direction.

Earnings Forecast and Guidance

Q1 progress toward the full-year forecasts (Revenue of ¥565.0B, Operating Income of ¥89.5B, and Ordinary Income of ¥86.2B) was 22.7% for Revenue, 18.8% for Operating Income, and 20.0% for Ordinary Income. All were below the standard quarterly progress benchmark of 25%. Operating Income in particular showed a gap of -6.2pt, and the decline in the Transportation segment’s margin appears to have contributed to the delayed progress. The company has made no revisions to either its earnings forecasts or dividend forecasts, and no changes to its assumptions have been indicated at this time.

Shareholder Returns

The full-year dividend forecast is ¥33, representing a ¥1 increase from the previous fiscal year’s actual dividend of ¥32. The Payout Ratio against forecast EPS of ¥108.29 is approximately 30.5%, remaining at a conservative level. Given the cash and deposits balance of ¥133.3B, there is a reasonable basis supporting the achievement of the dividend forecast.

Risk Factors

1. Decline in Transportation Segment Profitability: Operating Income in Transportation decreased significantly to ¥9.2B (YoY -29.5%), while its profit margin also declined to 18.6%. As the segment accounts for the largest share of company-wide profit at 54.1%, margin trends in this segment will continue to affect overall performance.

2. Delayed Full-Year Earnings Progress: The full-year progress rate for Operating Income was 18.8%, 6.2pt below the standard quarterly benchmark of 25%. Even after taking seasonality into account, the extent to which earnings recovery is achieved in the second half will determine the overall achievement of the earnings plan.

3. Financial Expenses and Interest-Bearing Debt: The company has ¥307.2B in long-term borrowings and ¥50.0B in bonds outstanding, while interest expense increased to ¥1.34B from ¥1.15B in the previous year. Given the high balance of non-current liabilities, the impact of future changes in the interest-rate environment on financial expenses warrants close monitoring.

Industry Benchmark (Reference; Compiled by the Company)

Industry Benchmark (transport)

Profitability and Returns

Profitability exceeds the industry median for both the Operating Margin and Net Profit Margin, and the company continues to maintain relatively high profitability within the industry.

Growth and Capital Efficiency

The Revenue Growth Rate is slightly above the industry median but remains within the range of industry dispersion (IQR 0.2%–7.6%).

※Source: Compiled by the Company

Key Takeaways from the Earnings Results

1. Operating Income in Leisure & Services grew substantially by YoY +214.8%, expanding its contribution to company-wide profit as the core business accounting for 47.3% of the revenue mix.

2. Operating Income in the Transportation segment declined significantly by YoY -29.5%. As the segment accounts for 54.1% of the profit mix, its margin trend is directly linked to full-year earnings progress (Operating Income progress rate of 18.8%, -6.2pt versus the standard benchmark).

3. While financial soundness remains stable, with an Equity Ratio of 40.2% and a Current Ratio of 164.8%, ROE remains at 2.5%, making trends in both profitability and asset efficiency key monitoring points.

Theoretical Share Price (Reference Value)

This is a reference range mechanically calculated solely from publicly disclosed data using a residual income model (Ohlson-type with an explicit five-year fade). It is not a forecast of the market share price or a recommendation of any specific investment action.

Sensitivity: ¥889–¥942 at ±1% for the cost of equity, and ¥912–¥919 at ±0.1 for ω.

Notes:

• Net assets as of the quarter-end were used (there is a timing difference relative to the full-year forecast).
• Because net assets include non-controlling interests, the theoretical value may be calculated somewhat on the high side.

(Calculation model: Residual Income Model / Interest Rate Reference Month: 2026-07 / This value does not predict or guarantee the future share price)

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This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting with professionals as necessary.

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