Sakai Moving Service (9039) FY2026 FY Earnings Report

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Executive Summary

Although revenue increased during the period, higher costs resulted in a decline in operating income and a slight deterioration in profitability, while financial soundness remained at a high level. Revenue was ¥1,247.4B (+3.1% year on year), operating income was ¥125.7B (down 2.7%), ordinary income was ¥132.3B (up 0.7%), and net income was ¥86.5B (down 2.6%). The main drivers of revenue growth were expansion in the core Moving Business and Reuse Business; however, the rate of increase in cost of sales exceeded revenue growth, resulting in a lower gross margin. Ordinary income increased slightly due to a boost from non-operating income, but net income fell below the previous year due to a higher tax burden.

Factors Affecting Performance

【Revenue】Revenue was ¥1,247.4B, representing a +3.1% year-on-year increase. The core Moving Business, which accounted for 84.5% of the revenue mix, increased 1.9% to ¥1,053.6B, while the Reuse Business achieved strong growth of 14.2% to ¥78.0B. Clean Services (+5.4%) and Electrical Work (+7.3%) also contributed to revenue growth, with all segments securing higher revenue.

【Profit and Loss】Operating income was ¥125.7B (down 2.7%), as cost of sales increased at a faster pace than revenue, causing the gross margin to decline from the previous year. Selling, general and administrative expenses increased by a relatively contained 2.8%, but this was insufficient to offset the increase in costs. Non-operating income of ¥7.7B, consisting of interest income and other items, contributed to ordinary income of ¥132.3B (up 0.7%), a slight increase; however, net income declined to ¥86.5B (down 2.6%) due to the impact of a higher effective tax rate. In conclusion, the Company achieved higher revenue but lower profit, and the cost absorption capacity of its core business remains a challenge.

Segment Analysis

Segment profit is based on ordinary income and therefore uses a different calculation basis from consolidated operating income; this distinction should be noted. The Moving Business recorded revenue of ¥1,053.6B (up 1.9%) and profit of ¥114.4B (down 0.3%), representing higher revenue but lower profit, with a profit margin of 10.9%. The Electrical Work Business recorded revenue of ¥49.8B (up 7.3%) and profit of ¥6.4B (down 3.3%), with a profit margin of 12.8%, also representing higher revenue but lower profit. The Clean Services Business recorded revenue of ¥57.7B (up 5.4%) and profit of ¥4.4B (down 5.6%), with a profit margin of 7.6%, indicating the strongest profitability pressure. The Reuse Business recorded revenue of ¥78.0B (up 14.2%) and profit of ¥2.3B (up 152.2%), a substantial profit increase; however, its profit margin remained low at 3.0%, meaning that its high growth could become a factor diluting the consolidated profit margin.

Key Financial Indicators

【Profitability】The operating margin was 10.1%, down approximately 60bp from 10.7% in the previous year, while the net profit margin was 6.9%, down from approximately 7.2% in the previous year. ROE was 8.7%, reflecting a low-leverage earnings structure comprising a 6.9% net profit margin, total asset turnover of 0.966x, and financial leverage of 1.30x. 【Cash Quality】Operating Cash Flow (OCF) was ¥93.0B, approximately 1.07 times net income of ¥86.5B, indicating that earnings were supported by cash generation. 【Investment Efficiency】Capital expenditures of ¥23.6B exceeded depreciation and amortization of ¥18.9B, indicating continued investment in replacement and growth. 【Financial Soundness】An equity ratio of 76.9% and cash and deposits of ¥295.3B support a net cash position, while interest-bearing debt is small and the interest burden is extremely limited.

Cash Flow Analysis

Operating Cash Flow was ¥93.0B, down 4.4% from ¥97.3B in the previous year. An increase in taxes and other payments of ¥49.1B was a factor weighing on OCF, while the impact of changes in working capital—inventory of △¥2.4B, trade receivables of △¥0.4B, and trade payables of +¥1.2B—was limited. Investing Cash Flow was an outflow of ¥30.5B, including capital expenditures of ¥23.6B and the acquisition of investment securities of ¥17.4B. Financing Cash Flow was an outflow of ¥67.5B, mainly due to dividend payments of ¥45.5B and share repurchases of ¥11.6B. Free Cash Flow, the sum of operating and investing cash flow, was positive at ¥62.5B. As shareholder returns were largely supported by internal funds, cash and cash equivalents decreased by ¥5.0B to ¥257.1B.

Earnings Quality

OCF of ¥93.0B exceeded net income of ¥86.5B, indicating limited concern regarding accrual-driven earnings quality. The divergence between ordinary income and net income was primarily attributable to the tax burden, with an effective tax rate of approximately 34.5%. As one-time factors, a gain on the sale of fixed assets of ¥0.3B and impairment losses of ¥0.0B were recorded; however, both were small and had a limited impact on profit and loss. Non-operating income of ¥7.7B was mainly composed of interest income, rental income, and other items, and has a nature close to recurring income. Comprehensive income was ¥89.9B, slightly exceeding net income of ¥86.5B, mainly due to a ¥3.4B increase in valuation difference on securities. The divergence from net income was not material.

Earnings Forecast and Guidance

The full-year earnings forecast is revenue of ¥1,300.1B (up 4.2% year on year), operating income of ¥130.5B (up 3.8%), ordinary income of ¥133.7B (up 1.0%), and net income of ¥76.4B (down 0.5%). Against this forecast, actual results for the current period reached progress rates of 95.9% for revenue, 96.0% for operating income, and 98.9% for ordinary income. The next-period forecast assumes higher operating income but anticipates a slight decline in net income; the key issue going forward is whether the Company can absorb fluctuations in its tax burden and one-time factors.

Shareholder Returns

The annual dividend for the current period totaled 98 yen, comprising an interim dividend of 30 yen and a year-end dividend of 68 yen. The payout ratio, using dividends alone as the numerator, was 45.9%. Including share repurchases of ¥11.6B, the total return ratio was approximately 66.0%. Dividend payments of ¥45.5B represented coverage of approximately 1.4x against free cash flow of ¥62.5B, a level indicating that dividends can be funded through internal resources. The forecast dividend for the next period is 117 yen, an increase of +19 yen from the previous period, and the payout ratio against forecast EPS of 215.8 yen is expected to be approximately 54.2%.

Risk Factors

1. Concentration in the core business and stagnant profit: The Moving Business accounts for 84.5% of revenue. Although revenue in this business increased 1.9% year on year, segment profit declined 0.3%. If the Company remains unable to sufficiently pass higher costs through to prices, recovery in the overall profit margin may be delayed.

2. Decline in gross margin: As the rate of increase in cost of sales exceeded the revenue growth rate, the operating margin declined by approximately 60bp from 10.7% in the previous year to 10.1%. The trend in cost absorption capacity should be monitored through future developments in the gross margin.

3. High growth in a low-profitability segment: The Reuse Business is growing rapidly, with revenue up 14.2% and profit up 152.2%; however, its profit margin of 3.0% is substantially below that of the core business at 10.9%. Accelerated growth could become a factor diluting the consolidated profit margin.

Industry Benchmark (For Reference; Compiled by the Company)

Industry Benchmark (transport)

Profitability and Return

The Company’s operating margin and net profit margin both substantially exceed the industry median, placing its profitability at a high level within the industry.

Growth and Capital Efficiency

The revenue growth rate exceeds the industry median but does not reach the IQR upper bound of 9.4%, placing the Company’s growth profile between the middle and upper ranges of the industry.

※Source: Compiled by the Company

Key Points from the Earnings Results

1. Despite higher revenue, the gross margin declined by approximately 67bp from the previous year, resulting in lower operating income. The cost absorption capacity of the core Moving Business will be key to restoring profitability.

2. The Reuse Business is achieving strong growth in both revenue and profit, but its profit margin is low at 3.0%. The impact of growth quality—namely, improvement in profit margin—on consolidated profitability should be closely monitored.

3. Against the backdrop of financial soundness, including an equity ratio of 76.9% and a net cash position, the Company is implementing shareholder returns consisting of a 45.9% payout ratio and approximately 66.0% total return ratio within the scope of free cash flow.

Theoretical Share Price (Reference Value)

Sensitivity: ¥2,368–¥2,502 at ±1% for the cost of equity, and ¥2,432–¥2,434 at ±0.1 for ω.

Notes:

• Amortization of goodwill of 0.8 yen per share has been added back to profit (as a non-cash expense and to improve comparability with IFRS companies).
• Because forecast ROE is below the cost of equity, the theoretical value is below book value per share.

(Calculation model: Residual Income Model (Ohlson-type, explicit 5-year fade) / Interest rate reference month: 2026-07 / Mechanically calculated value based solely on publicly disclosed data; this is not a forecast of the market share price or a recommendation of any specific investment action, and does not forecast or guarantee future share prices.)

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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 a professional as necessary.

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