Sakai Moving Service (9039) FY2026 Q3 Earnings Report

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Executive Summary

The cumulative results for Q3 of FY2026 reflected higher revenue but lower earnings, with deterioration in profitability due to rising costs determining the quality of performance. Revenue was ¥872.5B (¥847.8B in the previous year, YoY+2.9%), Operating Income was ¥76.6B (¥80.0B in the previous year, YoY-4.3%), Ordinary Income was ¥79.0B (down -3.2%), and Net Income was ¥51.2B (down -5.7%). While the core Moving Services Business increased revenue, the rate of increase in cost of sales (+4.0%) exceeded the revenue growth rate, and the declines in gross profit margin and Operating Income margin from the same period of the previous year were the primary causes of lower earnings.

Factors Driving Performance Changes

【Revenue】Revenue increased +2.9% year on year to ¥872.5B, and external revenue exceeded the previous year in all reported segments. The Moving Services Business generated ¥730.2B (+2.3%), accounting for 83.7% of consolidated revenue, followed by the Electrical Construction Business at ¥37.9B (+5.6%), the Cleaning Services Business at ¥43.6B (+5.6%), and the Reuse Business at ¥54.8B (+5.6%). The company’s high dependence on its core Moving Services Business creates a structure in which the sustainability of consolidated growth is determined by that business.

【Profit and Loss】Operating Income declined 4.3% to ¥76.6B, Ordinary Income declined 3.2% to ¥79.0B, and Net Income declined 5.7% to ¥51.2B. Cost of sales increased +4.0%, exceeding the revenue growth rate, while the gross profit margin declined 64bp to 37.1% (37.7% in the previous year). Since the SG&A ratio was largely unchanged at 28.3%, the primary cause of deteriorating profitability was on the cost side. Non-operating items were slightly negative on a net basis, with Extraordinary Income of ¥0.2B versus Extraordinary Losses of ¥0.4B, and therefore did not represent a temporary factor supporting Net Income. Higher revenue but lower earnings.

Segment Analysis

The Moving Services Business was the largest contributor to profit, generating external revenue of ¥730.2B (+2.3%) and segment profit of ¥65.0B (-3.4%), with its profit margin declining from 9.4% to 8.9%. The Electrical Construction Business generated revenue of ¥37.9B (+5.6%) and profit of ¥5.9B (-3.0%); its profit margin declined from 17.0% to 15.6%, but remained the highest among the reported segments. The Cleaning Services Business generated revenue of ¥43.6B (+5.6%) and profit of ¥3.6B (-10.5%), showing the largest deterioration, with its profit margin declining from 9.7% to 8.2%. The Reuse Business generated revenue of ¥54.8B (+5.6%) and profit of ¥0.9B (+1.1%), but its profit margin remained low at 1.7%. Although all segments increased revenue, profit margins declined across all segments, highlighting the challenge that expansion of peripheral businesses has not directly translated into improved profitability.

Key Financial Indicators

【Profitability】The Operating Income margin was 8.8%, down 66bp from 9.4% in the same period of the previous year, while the Net Income margin also declined 54bp to 5.9% (6.4% in the previous year). The gross profit margin was 37.1% (37.7% in the previous year), with rising costs being the primary cause of deteriorating profitability.【Cash Quality】Interest coverage was extremely high relative to interest expense of ¥0.2B, indicating that interest costs were not a constraint on profitability. The effective tax rate was approximately 35.0%.【Investment Efficiency】ROE (annualized) was 7.1%; among the three components—Net Income margin, total asset turnover, and financial leverage—the deterioration in profitability was the primary cause of the decline in ROE.【Financial Soundness】The Equity Ratio was extremely high at 84.0%, while current assets of ¥303.0B substantially exceeded current liabilities of ¥150.4B. Cash and deposits of ¥225.7B significantly exceeded interest-bearing debt (short-term borrowings of ¥17.0B and long-term borrowings of ¥12.0B), indicating a conservative financial foundation.

Cash Flow Analysis

Individual data from the cash flow statement were outside the scope of disclosure; however, movements in funds can be inferred from changes in the balance sheet. Cash and deposits were ¥225.7B, down from ¥300.1B in the same period of the previous year. At the same time, accounts receivable declined substantially to ¥37.7B (from ¥113.0B in the previous year), while accounts payable also declined substantially to ¥35.3B (from ¥75.7B in the previous year), indicating that collection of trade receivables and reduction of trade payables progressed in parallel. Property, plant and equipment increased to ¥735.2B (¥725.5B in the previous year), suggesting that investment outlays continued. Interest-bearing debt was small at ¥29.0B, and the Debt/Capital ratio was low at 2.9%, indicating limited external dependence for financing.

Quality of Earnings

Non-operating income was ¥3.2B, equivalent to only 0.4% of revenue, and consisted mainly of items such as dividends received of ¥0.5B; its contribution in lifting Ordinary Income above Operating Income was limited. Extraordinary Income was ¥0.2B from gains on the sale of fixed assets, while Extraordinary Losses were ¥0.4B, resulting in a slightly negative net impact on Profit Before Tax. Against Ordinary Income of ¥79.0B, Net Income was ¥51.2B, representing a divergence rate of 35.2%, primarily due to the ¥27.6B burden of income taxes. Since the contribution from non-recurring gains and losses was limited, current-period earnings reflect a recurring earnings structure close to the underlying strength of the core business.

Earnings Forecast and Guidance

The full-year company plan remains unchanged at Revenue of ¥1254.8B (YoY+3.7%), Operating Income of ¥130.9B (YoY+1.2%), and Ordinary Income of ¥133.7B (YoY+1.7%). The Q3 cumulative progress rates were 69.5% for Revenue, 58.5% for Operating Income, and 59.1% for Ordinary Income, below the standard 75% level. Operating Income progress was particularly delayed by 16.5 points, and achieving the plan will require approximately ¥54.3B of Operating Income in Q4, equivalent to an Operating Income margin of approximately 14.2%. This is substantially above the cumulative margin of 8.8%, making improved profitability during the peak season, when moving demand is concentrated, a prerequisite for achieving the plan.

Shareholder Returns

The Q2 dividend was ¥30.00 per share, and the cumulative Payout Ratio, using dividends alone as the numerator, was 24.8%. The full-year dividend forecast is ¥98.00 per share, and the forecast Payout Ratio calculated from the full-year EPS forecast of ¥219.68 is approximately 44.6%, below the generally regarded sustainability benchmark of 60%. Retained earnings of ¥906.1B and net assets of ¥962.3B provide substantial balance-sheet capacity to continue dividend payments. However, as progress toward the full-year earnings plan remains at 57.5% (Net Income), the accumulation of earnings in Q4, which underpins the dividend forecast, will be important.

Risk Factors

1. Dependence on the core business: The Moving Services Business accounts for 83.7% of external revenue, creating a structure in which residential relocation demand and operating conditions during the fiscal year-end peak season have a significant impact on consolidated performance.

2. Rising costs and price pass-through: Cost of sales increased +4.0%, exceeding the +2.9% revenue growth rate, and the gross profit margin declined 64bp. The ability to absorb labor shortages and increases in outsourcing and fuel costs will determine future profit margins.

3. Dependence on Q4 to achieve the full-year plan: The progress rate for Operating Income was only 58.5%, and achieving the plan will require an Operating Income margin of approximately 14.2% in Q4. Failure to achieve the targeted profitability during the peak season could exert downward pressure on the earnings and dividend plans.

Industry Benchmark (For Reference; Company Analysis)

Industry Benchmark (transport)

Profitability and Return

The Operating Income margin exceeds the industry median, while the Net Income margin is relatively low within the industry.

Growth and Capital Efficiency

The revenue growth rate is below the industry median, positioning the company’s growth pace as relatively moderate within the industry.

※Source: Company analysis

Key Points from the Earnings

1. While revenue growth has been maintained, the decline in the gross profit margin and Operating Income margin year on year due to rising costs is the structural characteristic of the current-period results.

2. The conservative financial position, including an Equity Ratio of 84.0%, a Debt/Capital ratio of 2.9%, and cash and deposits of ¥225.7B, demonstrates resilience against performance fluctuations.

3. Although the full-year company plan remains unchanged, the 58.5% progress rate for Operating Income assumes the realization of high profitability in Q4, making profitability during the peak season the key determinant of whether the plan will be achieved.

Theoretical Share Price (Reference Value)

Sensitivity: ¥2,318–¥2,451 at ±1% for the cost of equity, and ¥2,383–¥2,383 at ±0.1 for ω.

Notes:

• Since forecast ROE is below the cost of equity, the theoretical value is below book value per share.
• Net assets as of the quarter-end are used (there is a timing difference from the full-year forecast).
• Since net assets include non-controlling interests, the theoretical value may be calculated somewhat higher.

（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; it 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 discretion and responsibility, after consulting with a professional as necessary.

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