Sakai Moving Service Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥60.72B
• Operating Income: ¥6.53B
• Net Income: ¥4.30B
• EPS: ¥105.81

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

Verdict: a resilient but slightly softer quarter with solid top-line growth offset by mild margin compression and lower net profit. Revenue rose 2.6% YoY to 607.24, while operating income declined 1.1% YoY to 65.31, and net income fell 5.2% YoY to 43.00. Gross profit reached 231.20, implying a gross margin of 38.1%, and operating margin stood at 10.8%. Based on disclosed YoY rates, we estimate prior-period revenue at roughly 591.0 and operating income at about 66.06, implying operating margin compressed by approximately 42 bps YoY (from ~11.18% to ~10.76%). Ordinary income margin also compressed by roughly 39 bps YoY (from ~11.39% to ~10.99%). Net margin declined by an estimated 59 bps YoY (from ~7.67% to ~7.08%), reflecting higher effective tax rate impacts (35.3%) and modest non-operating income net of expenses (+1.43). The balance sheet remains exceptionally conservative: current ratio 198.6%, quick ratio 198.6%, D/E 0.22x, and interest coverage 435x, underpinned by cash of 265.24. Working capital of 174.66 and cash plus receivables of ~309 exceed current liabilities (177.14), indicating low liquidity risk and no maturity mismatch concerns. Earnings quality cannot be fully assessed due to unreported operating cash flow and capex data; thus, cash conversion and free cash flow coverage of dividends are unknown. The calculated ROE is 4.4%, constrained by modest net margin (7.1%), moderate asset turnover (0.514), and low financial leverage (1.22x). Reported ROIC of 5.8% trails the 7–8% target range, suggesting room for capital efficiency improvement. Dividend payout ratio is high at 95.5%, which appears elevated relative to typical sustainability benchmarks and could be sensitive to earnings volatility. Forward-looking, the modest revenue growth amid margin pressure suggests pricing and cost management will be key, especially around labor and fuel costs in peak moving seasons. With ample liquidity and low leverage, the company has balance-sheet flexibility to invest or stabilize shareholder returns, but profitability enhancements will likely be required to lift ROE and ROIC. Non-operating items are small in absolute terms and do not mask the core operating trend. Overall, the company delivered steady sales with slightly weaker margins, high tax drag, and a cautious profitability profile against a very strong financial position.

Profitability Analysis

ROE decomposition (DuPont): ROE 4.4% = Net Profit Margin (7.1%) × Asset Turnover (0.514) × Financial Leverage (1.22x). The low ROE is primarily driven by moderate asset turnover and a conservative leverage profile, with additional drag from YoY margin compression (~59 bps at net level). Among components, net margin contracted the most YoY (vs. ordinary and operating margins), reflecting tax rate effects (35.3%) and slight operating softness. Business drivers likely include cost inflation (labor, fuel) and mix/seasonality effects in the moving business that limited operating leverage despite revenue growth. The change appears partly cyclical/seasonal rather than one-off; however, absent evidence of structural price increases or productivity gains, recapturing prior margins may require cost actions or yield management. Operating leverage was modestly negative this quarter: revenue grew 2.6% YoY while operating income declined 1.1% YoY, implying SG&A and/or cost of sales grew faster than revenue. With non-operating items small relative to operating income, core trends are visible in the operating line and indicate mild pressure on profitability.

Growth Assessment

Revenue grew 2.6% YoY to 607.24, indicating steady demand in the moving market. Operating income declined 1.1% YoY and ordinary income declined 0.9% YoY, signaling limited operating leverage and some cost pressure. Net income fell 5.2% YoY, larger than the decline in operating/ordinary profit, driven in part by a 35.3% effective tax rate. Non-operating income net of expenses added approximately 1.43, modestly cushioning ordinary income relative to operating income. With operating margin at ~10.8% and gross margin at 38.1%, profitability remains healthy but slightly below last year’s levels. Given the industry’s seasonality (spring relocation peak), sequential volatility is expected; sustaining full-year growth will depend on pricing, capacity utilization, and cost control. Outlook-wise, if demand remains stable and cost inflation normalizes, margins could stabilize; conversely, continued wage and fuel pressures could keep operating leverage muted.

Financial Health

Liquidity is strong: current ratio 198.6% and quick ratio 198.6% comfortably exceed benchmarks. Cash (265.24) plus receivables (43.77) total ~309.01, well above current liabilities (177.14), indicating low short-term refinancing risk. Leverage is conservative: D/E 0.22x and long-term loans of 13.10 with short-term loans of 17.00 against abundant cash. Interest coverage is extremely strong at 435.4x, and no covenant stress is evident. There is no warning on Current Ratio (<1.0) or D/E (>2.0). Maturity mismatch risk is low given cash balances relative to short-term borrowings. No off-balance sheet obligations are disclosed in the provided data; however, potential lease obligations typical for logistics networks are not reported here.

Cash Flow Quality

Operating cash flow data are unreported, so OCF/Net Income and free cash flow sustainability cannot be assessed from this dataset. As such, we cannot evaluate cash conversion (OCF/NI) versus the 0.8–1.0+ benchmarks or the coverage of dividends and capex. Working capital appears ample (174.66), and cash is high relative to liabilities, which provides a buffer even if near-term OCF is softer. No clear signs of working capital manipulation can be assessed without inventory, payables detail beyond the headline figure, or OCF. We note that receivables (43.77) are modest relative to revenue scale, but days outstanding cannot be calculated from the available data.

Dividend Sustainability

The calculated payout ratio is 95.5%, which is elevated versus a typical sustainable range (<60%) and suggests limited room for dividend growth unless earnings improve or one-off distributions were included. Free cash flow coverage is not calculable due to unreported OCF and capex, so we cannot confirm cash-based sustainability. Balance sheet liquidity is strong, which could temporarily support dividends even with a high payout; however, reliance on the balance sheet is not a long-term solution. Policy clarity is limited in this dataset (no DPS breakdown reported), so investors should monitor full-year guidance and capital allocation commentary for dividend policy direction.

Risk Assessment

Business Risks:

• Margin pressure from labor wage inflation and driver shortages in the moving/logistics sector
• Fuel cost volatility impacting cost of sales and pricing power
• Seasonality and demand concentration around spring relocation season leading to utilization swings
• Competitive pricing dynamics in the domestic moving market affecting yield management

Financial Risks:

• High payout ratio (95.5%) reduces buffer against earnings volatility
• Potential lease and facility obligations not disclosed here could constrain flexibility
• Tax rate sensitivity (35.3% effective rate) can amplify net profit swings

Key Concerns:

• YoY compression in operating, ordinary, and net margins (~42–59 bps) despite revenue growth
• ROE at 4.4% and ROIC at 5.8% are below common targets, indicating capital efficiency headroom
• Limited visibility on cash flow generation due to unreported OCF and capex data

Investment Implications

Key Takeaways:

• Top-line grew 2.6% YoY, but operating income declined 1.1% and net income fell 5.2%
• Operating margin compressed ~42 bps YoY to ~10.8%
• Net margin compressed ~59 bps YoY to ~7.1%, with a 35.3% effective tax rate
• Balance sheet is robust: current ratio ~199%, D/E 0.22x, cash 265.24
• Interest burden is negligible; coverage ~435x
• ROE 4.4% constrained by moderate margins, asset turnover 0.514, and low leverage (1.22x)
• ROIC 5.8% suggests room for efficiency gains
• Dividend payout ratio 95.5% appears high versus typical sustainability benchmarks
• Non-operating items are small; core performance is reflected in operating income

Metrics to Watch:

• Price per move and volume mix around peak seasons
• Labor cost per hour/employee and staffing availability (driver shortages)
• Fuel cost trends and fuel surcharges
• Operating cash flow and capex (to assess FCF and dividend coverage)
• Effective tax rate and any structural tax changes
• Unit economics: operating margin trajectory and SG&A discipline relative to revenue growth

Relative Positioning: Versus domestic logistics/moving peers, the company exhibits a very conservative balance sheet and strong liquidity, with healthy but slightly compressing margins and sub-target capital efficiency (ROE/ROIC). Its financial resilience is a differentiator, while profitability improvement and cash flow visibility are key areas to close the gap with best-in-class efficiency.

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