Keihan Holdings Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥22.12B
• Net Income: ¥16.18B
• EPS: ¥156.60

Income Statement

Balance Sheet

Cash Flow Statement

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

Keihan Holdings (TSE: 9045) reported FY2026 Q2 consolidated results under JGAAP with operating income of ¥22.1bn, down 2.8% YoY, while net income increased 1.2% YoY to ¥15.8bn, indicating resilient bottom-line performance despite softer operating profit. Ordinary income was ¥21.1bn, suggesting limited non-operating headwinds given interest expense of ¥1.0bn. Using period-end equity, an indicative ROE is approximately 4.9% (¥15.8bn / ¥325.7bn), while ROA is about 1.8% (¥15.8bn / ¥879.4bn). Financial leverage stands at 2.70x (assets/equity), pointing to a moderately levered balance sheet typical for railway and real estate-heavy operators. Operating cash flow was solid at ¥29.6bn, translating to an OCF/Net income ratio of 1.87x, which supports good earnings cash conversion in the half. EBITDA was ¥32.6bn (operating income ¥22.1bn plus D&A ¥10.5bn), and interest coverage was strong at 22.4x (EBIT/interest), underscoring comfortable debt service capacity. The effective tax rate computed from disclosed income tax expense (¥6.5bn) and pre-tax income (≈¥22.3bn) is about 29%, not 0% as in the auto-calculated metrics that rely on missing fields. Liquidity is adequate with current assets of ¥235.3bn and current liabilities of ¥182.8bn, yielding a current ratio of 128.7% and working capital of ¥52.4bn. Total liabilities are ¥545.4bn against equity of ¥325.7bn, implying a debt-to-equity ratio of 1.67x; solvency appears manageable given robust coverage and positive OCF. Revenue and several common line items (e.g., inventories, investing cash flows, cash balance) are undisclosed in this dataset, so margin rates and free cash flow cannot be reliably computed. Despite these data gaps, the combination of modest operating softness and stable net profit suggests cost controls, non-operating gains, or tax mix helped sustain earnings. DuPont decomposition is limited by absent sales and asset turnover figures, but the observed ROA and leverage explain the indicative ROE. The capital intensity remains evident with D&A at ¥10.5bn in the half, consistent with a rail/real estate asset base, implying ongoing maintenance and development needs. Dividend metrics are not disclosed here (DPS and payout show as zero/unreported), preventing an assessment of distribution policy from this dataset alone. Overall, fundamentals in the half show stable profitability, strong cash conversion, and comfortable coverage, tempered by modest growth and the need for continued capex discipline. Data limitations notably restrict margin analytics and free cash flow assessment; conclusions are therefore based on the available non-zero disclosures.

Profitability Analysis

Indicative ROE is approximately 4.9% (¥15.8bn net income / ¥325.7bn equity, using period-end equity as a proxy), and ROA is about 1.8% (¥15.8bn / ¥879.4bn). Financial leverage is 2.70x (assets/equity), consistent with a capital-intensive model. Net profit margin and asset turnover cannot be calculated due to undisclosed revenue; however, ROE ≈ ROA × leverage holds (1.8% × 2.70 ≈ 4.9%). Operating income declined 2.8% YoY to ¥22.1bn, while net income rose 1.2% to ¥15.8bn, implying some support from non-operating items, lower tax rate, or mix. EBITDA of ¥32.6bn and interest expense of ¥1.0bn result in a strong interest coverage of ~22.4x, indicating healthy operating earnings relative to financing costs. D&A of ¥10.5bn highlights significant asset base amortization; operating leverage appears contained as small operating declines did not translate into outsized net declines. Effective tax rate recalculated at ~29% (¥6.49bn / pre-tax ≈ ¥22.29bn) suggests a normalizing tax burden. Margin quality assessment is constrained by missing sales and gross profit; however, positive OCF relative to earnings supports the quality of reported profit.

Growth Assessment

Top-line growth cannot be assessed due to undisclosed revenue. Operating income decreased 2.8% YoY to ¥22.1bn, indicating mild profit pressure at the operating level. Net income increased 1.2% YoY to ¥15.8bn, implying favorable below-the-line effects (non-operating items or taxes) and/or cost management that offset operating softness. With EBITDA at ¥32.6bn, the earnings base remains solid; however, the sustainability of net profit growth will depend on recovering operating trends and disciplined expenses. Without segment data, it is not possible to parse the contribution of transportation, real estate, or leisure/hotel businesses. The outlook hinges on traffic demand, occupancy and leasing metrics, and development project timing—none of which are disclosed here. Given the capital intensity and D&A level, continued maintenance and project execution will influence medium-term growth and margin resilience.

Financial Health

Total assets are ¥879.4bn with equity of ¥325.7bn and liabilities of ¥545.4bn, yielding a leverage profile of assets/equity 2.70x and liabilities/equity 1.67x. Liquidity is adequate: current assets ¥235.3bn vs current liabilities ¥182.8bn, producing a current ratio of 1.29x and working capital of ¥52.4bn. Quick ratio equals current ratio in this dataset because inventories are undisclosed; actual quick ratio may be slightly lower. Interest coverage is strong at ~22.4x, signaling comfortable service of debt costs. The effective tax rate is about 29%, consistent with standard corporate tax levels in Japan. The equity ratio appears as 0% in the dataset due to disclosure gaps; based on available numbers, the equity ratio by assets is approximately 37.0% (¥325.7bn / ¥879.4bn). Overall solvency appears sound, pending confirmation of debt maturity profile and off-balance commitments not provided here.

Cash Flow Quality

Operating cash flow of ¥29.6bn versus net income of ¥15.8bn yields an OCF/NI ratio of 1.87x, indicating strong cash conversion and limited accrual build in the half. Free cash flow cannot be calculated because investing cash flows are undisclosed (shown as zero), and capex is not provided. D&A of ¥10.5bn implies meaningful maintenance and investment needs typical for rail/real estate assets; thus, capex could materially consume OCF depending on project timing. Working capital details are not disclosed beyond current assets and liabilities totals; however, the positive OCF suggests no adverse working capital swing in aggregate during the period. Without cash and cash equivalents data, we cannot comment on cash buffer or net debt dynamics.

Dividend Sustainability

Dividend data are not disclosed in this dataset (DPS and payout appear as zero/unreported), so payout ratio and dividend coverage cannot be assessed from the provided information. With OCF of ¥29.6bn and positive earnings, internal cash generation is supportive in principle; however, the absence of capex and investing CF data prevents a free cash flow coverage analysis. Keihan’s dividend policy, payout targets, and any interim distributions are not available here; therefore, we cannot infer trajectory or sustainability for FY2026. Confirmation from official disclosures is necessary to evaluate payout versus earnings and free cash flow.

Risk Assessment

Business Risks:

• Demand volatility in core transportation operations affecting passenger revenue
• Exposure to real estate and hospitality cycles impacting occupancy, leasing, and ADR/RevPAR
• High capital intensity requiring ongoing maintenance and development capex
• Project execution and timing risk for development pipelines
• Regulatory and fare-setting constraints in transportation
• Natural disasters and extreme weather disrupting operations and assets, especially in rail corridors
• Competitive dynamics in leisure, retail, and hotel segments

Financial Risks:

• Leverage of 1.67x liabilities/equity and ongoing funding needs for capex
• Interest rate risk on floating-rate debt or future refinancings
• Refinancing and liquidity risk tied to debt maturity concentrations (not disclosed)
• Potential impairment risk in real estate/hospitality assets during downturns
• Pension and other long-term obligations (not disclosed here) that could affect cash flows

Key Concerns:

• Operating income decline (-2.8% YoY) despite positive net income growth
• Lack of disclosed revenue and segment data limits assessment of margin drivers
• Unknown investing cash flows and capex obscure free cash flow and funding needs
• Dividend information absent, preventing payout sustainability analysis

Investment Implications

Key Takeaways:

• Net income grew 1.2% YoY to ¥15.8bn despite a 2.8% YoY decline in operating income, indicating resilient bottom-line support
• Indicative ROE ~4.9% and ROA ~1.8% with leverage of 2.70x reflect a moderate return profile typical of asset-heavy operators
• OCF/NI of 1.87x shows strong earnings cash conversion in the half
• Interest coverage ~22.4x underscores ample capacity to service debt
• Data gaps (revenue, investing CF, cash balance, dividend) limit margin and FCF analysis

Metrics to Watch:

• Revenue and segment operating income to gauge margin trajectory
• Capex and investing cash flows to derive true free cash flow and funding needs
• Net debt, cash balance, and debt maturity profile for solvency assessment
• OCF/NI sustainability and working capital movements
• EBITDA and interest coverage as rates normalize
• Effective tax rate and non-operating items’ impact on net income
• Equity ratio and asset revaluations impacting leverage

Relative Positioning: Within Japan’s private railway and integrated urban development peers, Keihan appears moderately leveraged with solid coverage and cash conversion but shows modest profitability in the half; the absence of revenue data obscures margin comparisons, though the balance sheet and coverage metrics suggest a stable financial position relative to sector norms.

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