HAMAKYOREX CO.,LTD. FY2027 Q1 Earnings Report

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Executive Summary

Improved utilization of the Logistics Center Business and profitability improvements in the Freight Motor Transportation Business resulted in higher revenue and earnings, accompanied by an improvement in the operating margin. Revenue was ¥41.43B (+10.8% YoY), Operating Income was ¥4.33B (+20.6%), Ordinary Income was ¥4.86B (+23.3%), and Net Income attributable to owners of the parent was ¥2.96B (+19.1%). Operating Income growth exceeded Revenue growth, confirming an improvement in profitability in addition to higher revenue.

Factors Affecting Business Performance

【Revenue】Revenue was ¥41.43B, up +10.8% YoY. The core Logistics Center Business led overall performance with revenue of ¥27.16B (65.6% of total, YoY +12.4%), while the Freight Motor Transportation Business followed with ¥14.27B (34.4% of total, YoY +7.9%). Both segments continued to record revenue growth, reflecting parallel progress in expanding logistics center outsourcing contracts and correcting volumes and pricing in the transportation business.

【Profit and Loss】Operating Income was ¥4.33B (YoY +20.6%), and the operating margin was 10.5%, improving by approximately 0.9pt from 9.6% in the previous year’s corresponding period. Segment profit was ¥3.63B for the Logistics Center Business (YoY +10.8%, margin 13.4%) and ¥0.69B for the Freight Motor Transportation Business (YoY +124.2%, margin 4.8%). In particular, improved profitability in the transportation business contributed to lifting the overall operating margin. Ordinary Income was ¥4.86B (YoY +23.3%); non-operating income of ¥0.70B, including ¥0.34B in subsidy income, provided an additional contribution, while non-operating expenses were contained at ¥0.17B. There were no extraordinary gains or losses during the period. The gain on negative goodwill of ¥0.036B associated with the acquisition of shares in the Freight Motor Transportation Business, which had been recorded in the previous year’s corresponding period as a temporary factor, fell out of the results; however, the increase in profit at the Ordinary Income level more than offset this effect. Net Income attributable to owners of the parent was ¥2.96B (YoY +19.1%), reflecting higher revenue and earnings.

Segment Analysis

The Logistics Center Business generated revenue of ¥27.16B (YoY +12.4%) and segment profit of ¥3.63B (YoY +10.8%), with a margin of 13.4%, making it the earnings pillar and accounting for 65.6% of total company revenue. The Freight Motor Transportation Business generated revenue of ¥14.27B (YoY +7.9%), while segment profit rose sharply by 124.2% YoY to ¥0.69B, improving its margin to 4.8%. Although the Logistics Center Business remains superior in terms of absolute profitability, the correction of profitability in the transportation business significantly boosted this period’s earnings growth, narrowing the gap in segment margins compared with the previous year.

Key Financial Indicators

【Profitability】The operating margin was 10.5%, improving from 9.6% in the previous year’s corresponding period, while the net margin based on Net Income attributable to owners of the parent was 7.2% (¥2.96B/¥41.43B). The gross margin was relatively low at 13.7%, despite the earnings structure being centered on the stock-type Logistics Center Business, indicating a structure in which cost absorption capacity depends on improvements at the Operating Income level.【Cash Quality】Accounts receivable were ¥18.81B (YoY +1.7%), below Revenue growth (+10.8%). The slower growth may reflect the timing of billing and collections rather than a shortening of the collection period. Days sales outstanding were approximately 166 days on an estimated annualized basis using quarterly Revenue, suggesting a structure in which working capital is relatively likely to remain tied up.【Investment Efficiency】ROE was 2.9% (based on Net Income attributable to owners of the parent). Tangible fixed assets of ¥111.63B accounted for 64.1% of total assets of ¥174.11B, indicating that the capital-intensive business structure weighs on capital efficiency.【Financial Soundness】The Equity Ratio remained high at 64.6%, while the current ratio was 142.7% (current assets of ¥50.49B/current liabilities of ¥35.38B), indicating sufficient short-term payment capacity. Interest-bearing debt totaled ¥25.88B, comprising short-term borrowings of ¥13.22B and long-term borrowings of ¥12.66B, while cash and deposits of ¥27.21B exceeded this amount. Net interest-bearing debt was therefore negative on a net basis.

Cash Flow Analysis

Because a statement of cash flows has not been disclosed, fund movements are assessed based on changes in the balance sheet. Cash and deposits were ¥27.21B, up ¥0.70B (+2.6%) from ¥26.51B at the end of the previous fiscal year, representing only moderate growth compared with Revenue growth (+10.8%). While accounts receivable were ¥18.81B (YoY +1.7%), below Revenue growth, tangible fixed assets increased gradually to ¥111.63B (YoY +0.9%), suggesting that capital investment has continued. Short-term borrowings increased to ¥13.22B (¥12.94B in the previous year), while long-term borrowings rose to ¥12.66B (¥11.87B in the previous year), indicating that financing to support asset growth has proceeded in parallel. The continued maintenance of cash and deposits above total interest-bearing debt indicates stability in near-term funding.

Earnings Quality

Ordinary Income of ¥4.86B was almost identical to Profit Before Tax of ¥4.86B, and there were no extraordinary gains or losses during the period, indicating that earnings quality was close to income generated at the Ordinary Income level. Non-operating income of ¥0.70B, equivalent to 1.7% of Revenue, consisted mainly of subsidy income of ¥0.34B and dividends received of ¥0.07B, and was not large enough to materially distort core earnings. In the previous year’s corresponding period, a gain on negative goodwill of ¥0.036B associated with the acquisition of shares in the Freight Motor Transportation Business had been recorded as an extraordinary gain. Since no such temporary boost was present during the current period, the increase in profit at the Ordinary Income level more closely reflects an improvement in underlying earnings power. The difference between Net Income attributable to owners of the parent of ¥2.96B and comprehensive income attributable to owners of the parent of ¥2.98B was small, at approximately ¥0.02B, indicating a limited accrual impact from valuation differences on securities and adjustments related to retirement benefits. Meanwhile, the fact that accounts receivable growth was below Revenue growth suggests that a certain time lag may exist between cash-basis monetization and accounting recognition of revenue. Working capital trends therefore remain an item requiring continued monitoring.

Earnings Forecasts and Guidance

Progress toward the full-year forecast was 25.0% for Revenue (¥41.43B/¥165.50B), 26.6% for Operating Income (¥4.33B/¥16.30B), 28.3% for Ordinary Income (¥4.86B/¥17.20B), and 27.4% for Net Income (¥2.96B/¥10.80B). All exceeded the simple quarterly run-rate of 25%, with progress particularly ahead at the Ordinary Income and Net Income levels. No revisions were made to the earnings or dividend forecasts as of the end of the quarter. Against the full-year forecast growth rates for Revenue and Operating Income of +6.4% and +10.4%, respectively, actual growth rates as of Q1 of +10.8% and +20.6% were tracking above these levels.

Shareholder Returns

The full-year dividend forecast is ¥23 per share. Based on the weighted-average number of shares outstanding during the period of 74,027,882 shares, total annual dividends are calculated at approximately ¥1.70B. The Payout Ratio against the full-year forecast of Net Income attributable to owners of the parent of ¥10.80B is approximately 15.8% (total dividends of ¥1.70B ÷ forecast Net Income of ¥10.80B), representing a conservative level. No revision was made to the dividend forecast as of the end of the quarter. Given cash and deposits of ¥27.21B and an Equity Ratio of 64.6%, the company has an adequate financial basis for funding dividends.

Risk Factors

1. Working capital concentration risk: Accounts receivable were ¥18.81B (YoY +1.7%), corresponding to a relatively long collection period of approximately 166 days based on days sales outstanding. If Revenue growth (+10.8%) continues, additional working capital investment could pressure cash flow.

2. Composition of short-term liabilities: Of total interest-bearing debt of ¥25.88B, short-term borrowings accounted for ¥13.22B, representing more than half. Although cash and deposits of ¥27.21B exceed total interest-bearing debt and provide sufficient repayment capacity for the time being, the structure involves a relatively high frequency of refinancing short-term funds.

3. Earnings sensitivity arising from the low gross margin: The gross margin is relatively low at approximately 13.7%, creating a structure in which a slowdown in Revenue is likely to have a relatively large impact on Operating Income. The margin of the Freight Motor Transportation Business is 4.8%, and the difference between segments should be noted. Profitability in this business is also susceptible to external factors such as driver labor costs and fuel expenses.

Industry Benchmark (Reference; Company Analysis)

Industry Benchmark (transport)

Profitability and Returns

Both the operating margin and net margin exceed the industry median, placing the company in the upper tier of the industry in terms of profitability.

Growth and Capital Efficiency

Revenue growth substantially exceeds the industry median but remains broadly within the upper bound of the IQR (11.2%).

Source: Company compilation

Key Earnings Highlights

1. Q1 recorded higher revenue and earnings, with the operating margin improving by approximately 0.9pt YoY. Operating Income in the Freight Motor Transportation Business recovered sharply, increasing +124.2% YoY. The progress made in correcting profitability and its contribution to lifting the overall operating margin are key features of the results.

2. Progress toward the full-year forecast was 25.0% for Revenue, 26.6% for Operating Income, 28.3% for Ordinary Income, and 27.4% for Net Income, all exceeding the quarterly run-rate of 25%. No revisions were made to the earnings or dividend forecasts.

3. Days sales outstanding were relatively long at approximately 166 days, indicating a structural time lag in cash conversion relative to Revenue growth. The financial base, including an Equity Ratio of 64.6% and cash and deposits exceeding total interest-bearing debt, provides capacity to absorb this working capital burden.

Theoretical Share Price (Reference Value)

This is a reference range mechanically calculated solely from publicly disclosed data using a residual income model (Ohlson-type model 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: ¥1,499–¥1,589 at ±1% for the cost of equity, and ¥1,542–¥1,544 at ±0.1 for ω.

Notes:

• Net assets as of the end of the quarter are used (there is a timing difference from 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: 2026-06 / 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 report 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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