Sakai Moving Service Co.,Ltd. FY2027 Q1 Earnings Report

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Executive Summary

Sakai Moving Service’s Q1 of the fiscal year ending March 2027 was characterized by higher revenue and income, driven by the expansion of its core Moving Business and Electrical Construction Business, with Net Income increasing by double digits due to an improvement in the tax burden. Revenue was ¥35.31B (+4.5% YoY), Operating Income was ¥5.55B (+3.6%), Ordinary Income was ¥5.67B (+4.0%), and Net Income was ¥3.81B (+9.3%). Revenue growth was driven by solid demand in the Moving Business and strong growth in the Electrical Construction Business, while income growth benefited from an improved SG&A ratio and a lower effective tax rate.

Factors Affecting Financial Results

【Revenue】Revenue was ¥35.31B, up +4.5% YoY. The core Moving Business, which accounted for 85.4% of the revenue mix, delivered stable growth of ¥30.21B (+4.0%), while the Electrical Construction Business achieved strong growth of ¥2.85B (+12.7%), driving overall growth. Clean Services (¥1.57B, +3.3%) and Reuse (¥1.78B, +0.6%) maintained revenue growth despite their smaller scale.

【Profit and Loss】The gross margin was 40.7%, down from the previous year, but the SG&A ratio improved to 25.0%, and this efficiency improvement offset the decline in the gross margin. Operating Income increased 3.6% to ¥5.55B, while Ordinary Income increased 4.0% to ¥5.67B, representing almost the same rate of growth. However, Net Income rose substantially by 9.3% to ¥3.81B. The fact that Net Income growth exceeded that of Operating Income and Ordinary Income was attributable to the absence this period of the ¥0.065B loss on valuation of investment securities recorded in the previous year and a decline in the effective tax rate from approximately 35% to 32.8%. Revenue and income increased.

Segment Analysis

The Moving Business generated revenue of ¥30.21B (+3.9%) and segment profit of ¥4.96B (+2.2%), with a profit margin of 16.5%. It is the core business, accounting for approximately 88% of total segment profit. The Electrical Construction Business generated revenue of ¥2.85B (+20.7%) and segment profit of ¥0.33B (+10.1%), achieving the highest profitability among the segments with a profit margin of 20.2%. Although small in scale, it is serving as a growth driver. Clean Services posted revenue of ¥1.57B (+2.4%), but segment profit declined 16.3% to ¥0.12B, resulting in a lower profit margin of 8.1%. The Reuse Business was almost flat, with revenue of ¥1.78B (+0.5%), but segment profit improved significantly from the previous year to ¥0.09B, indicating progress in improving profitability. Across the segments, the high profitability of the Electrical Construction Business contrasts with the low profitability of Clean Services and Reuse, and changes in the business portfolio mix could affect the Company-wide margin going forward.

Key Financial Indicators

【Profitability】The Operating Income margin was 15.7%, remaining almost flat from the previous year, while the Net Income margin improved to 10.8%. Although the gross margin declined to 40.7%, the improvement in the SG&A ratio to 25.0% offset this decline, and, together with the effect of revenue growth, supported profit growth.【Cash Quality】Non-operating income was ¥0.13B, remaining below 0.4% of revenue, while extraordinary gains and losses were immaterial, consisting solely of a ¥0.01B gain on the sale of fixed assets. Accordingly, earnings were derived almost entirely from the core business.【Capital Efficiency】ROE was 3.8%, with improvements in total asset turnover and the Net Income margin contributing to the result, while the high Equity Ratio served to expand the denominator.【Financial Soundness】The Equity Ratio was extremely high at 81.8%, and the Company was in a net cash position, with cash and deposits of ¥29.60B substantially exceeding interest-bearing debt. Liquidity was also ample, with current assets of ¥37.29B against current liabilities of ¥18.64B.

Cash Flow Analysis

Because a cash flow statement was not disclosed, the movement of funds can be assessed from changes in the balance sheet. Cash and deposits were ¥29.60B, remaining almost unchanged from ¥29.53B in the same period of the previous year. Accounts receivable and notes receivable declined substantially to ¥4.20B from ¥11.35B in the previous year, suggesting progress in collections. Meanwhile, accounts payable and notes payable also declined to ¥3.23B from ¥7.63B, indicating progress in reducing trade payables. Short-term borrowings decreased to ¥0.70B from ¥1.70B, and the reduction of interest-bearing debt continued. These changes indicate lower working-capital volatility and conservative financial management that reduces liabilities while maintaining liquidity on hand.

Earnings Quality

The Company’s earnings for the period consisted almost entirely of core operating income, and earnings quality can therefore be assessed as high. Non-operating income was ¥0.13B, a small amount equivalent to less than 0.4% of revenue, consisting mainly of ¥0.02B in dividend income and ¥0.09B in other non-operating income. Extraordinary income consisted solely of a ¥0.01B gain on the sale of fixed assets, and no extraordinary loss was recorded. In contrast, a ¥0.065B loss on valuation of investment securities was recorded as an extraordinary loss in the same period of the previous year. The elimination of this non-recurring factor pushed the YoY increase in Net Income (+9.3%) above the growth in underlying Operating Income (+3.6%). Comprehensive Income was ¥3.81B, almost in line with Net Income, while the change in the valuation difference on other securities (-¥0.01B) was small, limiting the divergence between Net Income and Comprehensive Income.

Earnings Forecast and Guidance

Progress against the Full-Year forecast was 27.1% for Revenue, 42.5% for Operating Income, 42.4% for Ordinary Income, and 43.6% for Net Income, with profit progress substantially outpacing revenue progress. This reflects a front-loaded earnings structure arising from the seasonality of Q1, when demand associated with new lifestyles is concentrated. Neither the earnings forecast nor the dividend forecast was revised. The Full-Year forecast calls for Revenue of ¥130.01B (+4.2%), Operating Income of ¥13.05B (+3.8%), and Ordinary Income of ¥13.37B (+1.0%). The fact that the projected growth rate for Ordinary Income is lower than those for Revenue and Operating Income suggests that the Company may be conservatively estimating the full-year non-operating environment and tax burden.

Shareholder Returns

The Company’s forecast annual dividend is ¥117 per share, indicating a policy of increasing the dividend on a Full-Year basis from the previous year’s actual dividend of ¥30 (quarterly portion). Based on the average number of shares outstanding during the period of 40,260 thousand shares, total dividends are calculated at approximately ¥4.71B, resulting in a Payout Ratio of approximately 54% against the Full-Year Net Income forecast of ¥8.74B. Given the Company’s financial position, with cash and deposits of ¥29.60B substantially exceeding interest-bearing debt and resulting in a net cash position, this Payout Ratio can be assessed as sustainable relative to cash holdings and earnings levels.

Risk Factors

1. Business concentration risk: The Moving Business accounts for 85.4% of Revenue and approximately 88% of segment profit, indicating a high degree of dependence on a single business. Fluctuations in demand and price competition in this business can therefore have a direct impact on Company-wide results.

2. Cost pass-through risk: The gross margin declined to 40.7% from the previous year, suggesting that increases in costs such as labor and fuel expenses may not have been fully passed through to prices. The improvement in the SG&A ratio to 25.0% is currently absorbing this impact, and whether this structure can continue will be important to monitor.

3. Seasonality-related uneven progress: The profit progress rate in Q1 was high, in the 42% range, reflecting the seasonality of concentrated demand associated with new lifestyles. Results are expected to normalize from Q2 onward, and the Full-Year margin level may change.

Industry Benchmark (Reference; Company Research)

Industry Benchmark (transport)

Profitability and Returns

Both the Operating Income margin and Net Income margin substantially exceeded the industry median, placing the Company among the industry leaders in terms of profitability.

Growth and Capital Efficiency

The Revenue growth rate exceeded the industry median but did not reach the upper bound of the IQR (7.6%), placing the Company’s growth profile in the middle to upper range of the industry.

※Source: Company research

Key Points in the Earnings Results

1. In addition to higher revenue and income, the high profit progress rate in the 42% range against the Full-Year forecast reflects the seasonality of concentrated demand associated with new lifestyles in Q1 and should be interpreted in light of normalization over the Full Year.

2. The improvement in the SG&A ratio to 25.0% absorbed the decline in the gross margin to 40.7%, maintaining an Operating Income margin of 15.7%. This demonstrates the efficiency of cost management. At the same time, the declining trend in the gross margin warrants continued monitoring of the cost environment, including labor and fuel expenses, as well as pricing policy.

3. The net cash financial position, in which cash and deposits of ¥29.60B exceed interest-bearing debt, together with the high Equity Ratio of 81.8%, provides a foundation supporting the shareholder return policy with a Payout Ratio of approximately 54%.

Theoretical Share Price (Reference Value)

Sensitivity: ¥2,416–¥2,553 at ±1% for the Cost of Equity, and ¥2,482–¥2,483 at ±0.1 for ω.

Notes:

• Because Net Income progress against the Full-Year forecast (44%) exceeds the standard level (25%), forecast EPS has been adjusted upward within a maximum range of +10% (because companies with progress ahead of schedule tend to outperform forecasts; adjustments may be excessive for businesses with strong seasonality).
• Because forecast ROE is below the Cost of Equity, the theoretical value is below Book Value per Share.
• Net assets as of the end of the quarter are used (there is a timing mismatch with the Full-Year forecast).
• Because 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; this is not a forecast of the market share price or a recommendation of any specific investment action, and does not forecast 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 summary 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 professionals as necessary.

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