| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue | ¥233.5B | ¥221.3B | +5.5% |
| Operating Income | ¥24.2B | ¥20.1B | +20.7% |
| Ordinary Income | ¥18.6B | ¥15.9B | +17.1% |
| Net Income | ¥11.7B | ¥8.9B | +31.9% |
| ROE | 4.6% | 3.8% | - |
For the fiscal year ended March 2026, Revenue was ¥233.47B (YoY +¥12.16B +5.5%), Operating Income was ¥24.21B (YoY +¥4.15B +20.7%), Ordinary Income was ¥18.61B (YoY +¥2.72B +17.1%), and Net Income was ¥11.70B (YoY +¥2.83B +31.9%), delivering year-over-year increases across all profit levels. The core Transportation segment drove company-wide profitability, posting Revenue of ¥140.37B (YoY +7.8%) and Operating Income of ¥15.78B (YoY +71.9%). Operating margin improved to 10.4% (prior year 9.1%), a ~1.3pt improvement, reflecting cost-efficiency measures and improved Transportation profitability. Extraordinary items comprised Extraordinary Gains of ¥18.32B (mainly ¥3.31B gain on sale of fixed assets and construction contribution receipts) and Extraordinary Losses of ¥16.34B (including ¥1.33B impairment losses), which largely offset, resulting in a net positive contribution of approximately ¥1.98B. Net Income outperformed Operating Income growth (+31.9% YoY), with one-off factors accounting for roughly 30% of the increase. Operating Cash Flow (OCF) was strong at ¥38.40B (YoY +29.6%), Free Cash Flow (FCF) was ¥14.50B, and capital expenditures of ¥39.93B were funded from internal cash resources.
Revenue totaled ¥233.47B (YoY +5.5%), led by the Transportation segment at ¥140.37B (YoY +7.8%), representing 60.1% of total revenue; recovery in passenger demand and higher fare revenue drove growth. Real Estate revenue was ¥18.56B (YoY +4.2%), supported by stable rental income and contributions from property sales. The Retail segment declined slightly to ¥52.79B (YoY -1.1%) as price competition and weak store traffic weighed on sales. Other segments (Childcare, Health, Construction) performed well at ¥21.74B (YoY +9.3%), providing support to consolidated revenue. Revenue composition was Transportation 60.1%, Retail 22.6%, Other 9.3%, Real Estate 8.0%, with Transportation and Real Estate forming a stable revenue base.
Operating Income was ¥24.21B (YoY +20.7%), with Operating margin improving to 10.4% (prior year 9.1%), ~1.3pt better. By segment, Transportation recorded Operating Income of ¥15.78B (YoY +71.9%) and margin of 11.2%, reflecting strong recovery in demand, cost control, and fare revisions. Real Estate maintained high profitability with Operating Income of ¥7.93B (YoY -12.9%) and margin of 42.7%, but declined due to the absence of large sales recognized in the prior year. Retail suffered, with Operating Income of ¥0.24B (YoY -76.7%) and margin of 0.5%, pressured by higher costs and SG&A. SG&A was ¥28.52B, SG&A ratio 12.2%; SG&A growth was contained relative to Revenue growth (+5.5%), generating operating leverage. Ordinary Income was ¥18.61B (YoY +17.1%); non-operating income was ¥2.31B (including ¥0.46B dividend income) versus non-operating expenses of ¥7.92B (including interest expense of ¥7.01B), yielding net non-operating loss of ¥5.61B. Profit before tax was ¥20.59B; Extraordinary Gains ¥18.32B (gain on sale of fixed assets ¥3.31B; construction contribution receipts ¥15.00B, etc.) and Extraordinary Losses ¥16.34B (impairment losses ¥1.33B; construction contribution refunds ¥15.00B, etc.) largely offset, netting approximately ¥1.98B positive. Income taxes were ¥5.97B (effective tax rate 29.0%), resulting in Net Income of ¥11.70B (YoY +31.9%) and Net Margin 5.0% (prior year 4.0%). In conclusion, recovery in Transportation demand and cost-efficiency drove higher revenue and profit, and the net positive effect of extraordinary items further boosted Net Income.
The Transportation segment reported Revenue of ¥140.37B (YoY +7.8%) and Operating Income of ¥15.78B (YoY +71.9%), a significant profit increase with margin improving to 11.2% (prior year 7.0%), +~4.2pt. Comprised of Railway, Bus, and Taxi businesses, the segment benefited from passenger demand recovery, fare revisions, and cost optimization. The Operating Income increase of ¥6.60B YoY was approximately 1.6x the consolidated Operating Income increase of ¥4.15B, making Transportation the core earnings driver. Real Estate posted Revenue of ¥18.56B (YoY +4.2%) and Operating Income of ¥7.93B (YoY -12.9%) with margin 42.7% (prior year 46.3%); high profitability was maintained but decreased due to the prior-year large land/building sale. Rental operations remain stable and underpin future earnings. Retail reported Revenue of ¥52.79B (YoY -1.1%) and Operating Income of ¥0.24B (YoY -76.7%), with margin falling to 0.5% (prior year 1.9%); intensified price competition, higher cost of goods sold, and labor cost increases pressured profitability, leaving structural low margins. Other segments (Childcare, Health, Construction) posted Revenue of ¥21.74B (YoY +9.3%) and Operating Income of ¥0.31B (YoY -47.5%); while revenue expanded, margins remained low.
Profitability: Operating margin was 10.4% (prior year 9.1%), ~1.3pt improvement, supported by Transportation demand recovery and cost efficiency. Net margin was 5.0% (prior year 4.0%), ~1.0pt higher, driven by operating profit growth and net positive extraordinary items. ROE was 4.6% (prior year 3.8%), ROA 1.3% (prior year 1.0%)—improved but still with room to enhance capital efficiency versus industry norms. EBITDA margin was 19.9% (EBITDA ¥46.52B = Operating Income ¥24.21B + Depreciation ¥22.31B), indicating solid pre-interest earnings power.
Cash quality: OCF/Net Income multiple was 3.28x (¥38.40B ÷ ¥11.70B), a high level indicating strong cash generation. OCF/EBITDA was 0.83x, with interest payments (¥7.01B) and working capital movements partially constraining cash conversion.
Investment efficiency: Capex/Depreciation was 1.79x (¥39.93B ÷ ¥22.31B), indicating ongoing renewal and enhancement investments expected to support future service levels and ROIC improvement. Total asset turnover was 0.25x (¥233.47B ÷ ¥934.93B), low due to the capital-intensive nature of railway and real estate operations (fixed asset ratio 93.1%), making structural improvement in turnover difficult.
Financial soundness: Equity Ratio was 27.0% (prior year 26.0%)—slightly improved—but D/E ratio remained high at 2.70x (interest-bearing debt ¥538.99B ÷ equity ¥199.80B). Current ratio was 23.1% (current assets ¥64.52B ÷ current liabilities ¥279.41B), and quick ratio 22.6%, extremely low; short-term borrowings ¥199.94B versus cash and deposits ¥13.24B (cash/short-term liabilities ratio 0.07x) indicate a thin liquidity buffer. Interest coverage was 3.45x on an EBIT basis (¥24.21B ÷ ¥7.01B) and 6.64x on an EBITDA basis; short-term interest payment capacity is secured, but Debt/EBITDA of 11.6x is high, leaving risk if interest rates rise.
OCF was ¥38.40B (YoY +29.6%). EBITDA before working capital changes (profit before tax ¥20.59B + depreciation ¥22.31B) totaled ¥50.17B. In working capital, increase in accounts payable (+¥3.98B) supported OCF, while increases in accounts receivable (-¥1.62B) and inventories (-¥0.51B) partly offset. Corporate tax payments were ¥5.27B; interest and dividend receipts were ¥0.49B; interest paid was ¥7.00B, resulting in net financial outflow of -¥6.51B which weighed on OCF. Investing cash flow was -¥23.90B, mainly due to purchases of tangible fixed assets (-¥39.93B), partly offset by construction contribution receipts (+¥11.09B) and proceeds from sale of fixed assets (+¥6.66B). FCF was positive at ¥14.50B (OCF ¥38.40B + Investing CF -¥23.90B), sufficient to cover dividend payments of ¥1.58B, share buybacks of ¥0.01B, and net repayment of interest-bearing debt of ¥11.81B financed from cash operations. Financing CF was -¥11.81B, driven by long-term borrowings of ¥109.50B and repayments of ¥110.40B, net decrease in short-term borrowings of ¥4.46B, and lease liability repayments of ¥4.84B. Cash and cash equivalents at period-end improved to ¥13.22B (YoY +¥2.70B +25.6%), but remain a thin liquidity cushion against short-term borrowings of ¥199.94B. OCF/EBITDA was 0.83x, below 0.9, with interest payments and working capital movements dampening cash conversion, though there were limited signs of excessive working capital manipulation.
With Ordinary Income of ¥18.61B and Net Income of ¥11.70B, the Net Income/Ordinary Income ratio was 0.63x, a larger-than-usual gap partly due to the net positive extraordinary items of approximately ¥1.98B and corporate taxes of ¥5.97B (effective tax rate 29.0%). Non-operating results were -¥5.61B, with interest expense of ¥7.01B reducing earnings quality. Extraordinary items comprised Extraordinary Gains of ¥18.32B (gain on sale of fixed assets ¥3.31B; construction contribution receipts ¥15.00B, etc.) and Extraordinary Losses of ¥16.34B (impairment losses ¥1.33B; construction contribution refunds ¥15.00B, etc.), netting ~¥1.98B positive. Construction contribution receipts and refunds largely offset in accounting and have limited net cash impact, while the ¥3.31B gain on sale of fixed assets is a one-time item with low likelihood of recurrence. From an accrual perspective, OCF ¥38.40B is 3.28x Net Income ¥11.70B, indicating cash-backed earnings. Comprehensive income was ¥19.06B (Net Income ¥11.70B + Other Comprehensive Income ¥4.44B), including valuation gains on securities ¥2.66B, actuarial adjustments related to retirement benefits ¥1.77B, and land revaluation difference -¥0.98B; valuation gains exceeded Net Income. Overall, operating-income-based earnings are solid and recurring quality shows improvement, but Net Income has been elevated by extraordinary and comprehensive income items; evaluating the company on Operating and Ordinary Income levels is important for assessing underlying performance next fiscal year.
Full-year guidance forecast Revenue ¥233.20B, Operating Income ¥24.10B, Ordinary Income ¥17.20B, Net Income ¥11.90B. Actuals were Revenue ¥233.47B (vs. guidance +0.12%), Operating Income ¥24.21B (+0.46%), Ordinary Income ¥18.61B (+8.20%), and Net Income ¥14.62B (+22.86%; note: guidance Net Income ¥11.90B vs. reported Net Income ¥11.70B and Net Income attributable to owners of the parent ¥14.62B). Operating results were in line with forecasts, while Ordinary Income and Net Income exceeded guidance. Operating Income progress rate was 100.5%, slightly above plan due to stronger-than-expected Transportation demand recovery and cost containment. Upside in Ordinary Income reflected net positive extraordinary items and differences in assumed interest burden. Achievement versus full-year guidance was high. Key focus items for next fiscal year include sustainability of Transportation demand, interest rate environment, and progress on profitability measures in the Retail business. EPS came in at ¥184.83 (guidance ¥150.41), and dividends were ¥25 at year-end (interim ¥0) versus guidance of ¥0.
A year-end dividend of ¥25 (interim ¥0) was paid, representing a return to dividends versus the prior year (year-end ¥0, interim ¥0). Payout Ratio was 13.9% (total dividends ¥1.58B ÷ Net Income ¥11.70B; on Net Income attributable to owners of the parent ¥14.62B basis, the ratio is 10.8%), a conservative level; dividend coverage by FCF is 9.18x, providing ample cushion. Share buybacks were modest at ¥0.01B, total shareholder distributions were ¥1.59B, and Total Return Ratio was 14.0% (based on Net Income ¥11.70B), indicating a dividend-centric return policy. Given cash and deposits ¥13.24B versus short-term borrowings ¥199.94B and weak liquidity, dividend setting was cautious and balanced with retained earnings. Going forward, management intends to prioritize continued OCF generation and staged reduction of interest-bearing debt while gradually raising the payout ratio as earnings grow. Dividend sustainability depends on FCF levels, interest burden, and progress of capex plans; at current levels, dividends are considered sustainable.
Liquidity Risk: Current ratio 23.1%, cash/short-term liabilities ratio 0.07x—extremely low—cash and deposits ¥13.24B versus short-term borrowings ¥199.94B means a thin liquidity buffer. Certainty of refinancing and rollover is critical to ongoing operations; maintaining strong relationships with financial institutions and secured credit lines is essential. In an environment of rising interest rates or deteriorating credit conditions, funding costs could rise and financial burden increase.
High Leverage and Interest Burden: D/E ratio 2.70x and Debt/EBITDA 11.6x indicate sustained high leverage; interest expense ¥7.01B accounts for 29.0% of Operating Income ¥24.21B. Interest coverage is 3.45x on an EBIT basis, indicating near-term interest payment capacity, but rising interest rates would increase interest expense and compress Net Income. Management of interest terms and maturity composition of long-term borrowings (¥339.05B) is important.
Dependence on Transportation Segment and Structural Risks: The company depends on Transportation for 60.1% of Revenue and 65.2% of Operating Income; fluctuations in passenger demand (economic downturns, infectious disease outbreaks, disasters, etc.) directly affect consolidated results. The Retail segment’s low structural margin (Operating margin 0.5%) persists, and cost increases and intense competition make profitability improvement difficult. Real Estate remains highly profitable but is volatile year-to-year depending on large transactions. Segment imbalance reduces earnings stability; mid-term priorities include restructuring Retail and diversifying revenue sources.
Revenueability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 10.4% | 6.3% (3.7%–8.5%) | +4.1pt |
| Net Margin | 5.0% | 2.7% (1.6%–4.7%) | +2.3pt |
Both Operating and Net margins exceed industry medians, reflecting Transportation demand recovery and cost efficiency, placing the company among higher-performing peers on profitability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 5.5% | 5.0% (-0.4%–9.4%) | +0.5pt |
Revenue growth is roughly in line with the industry median, sustained by Transportation demand recovery and stable Real Estate growth.
※ Source: Company aggregation
Transportation segment momentum is favorable, delivering Operating margin 10.4% well above the industry median 6.3%. Passenger demand recovery, fare revisions, and cost optimization resulted in Operating Income growth of +71.9% YoY. Sustaining demand and continuing fare and cost control will be key to maintaining growth. Real Estate maintains high margin (42.7%) and functions as a stable earnings source.
Liquidity risk is the most notable concern: Current ratio 23.1%, cash/short-term liabilities ratio 0.07x are extremely low, making refinancing/rollover of short-term borrowings ¥199.94B critical to business continuity. OCF ¥38.40B and FCF ¥14.50B are solid, but high leverage (D/E 2.70x, Debt/EBITDA 11.6x) and interest burden (interest expense ¥7.01B) must be reduced to improve financial soundness. Capex/Depreciation 1.79x indicates ongoing renewal investment which should improve safety and service levels, but monitoring investment payback and ROIC improvement is necessary.
Net positive extraordinary items of approximately ¥1.98B raised Net Income ¥11.70B by roughly 17%; therefore, analyzing Operating and Ordinary Income is important for assessing core performance next fiscal year. Retail remains structurally low-margin (Operating margin 0.5%), and competitive pressures and rising costs make recovery difficult. Dividend resumed at year-end ¥25, with Payout Ratio 13.9% conservative; FCF coverage 9.18x supports sustainability. Priority axes for medium-term evaluation are Retail restructuring, revenue diversification, and staged reduction of interest-bearing debt to improve capital efficiency.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in specific securities. Industry benchmarks are reference information aggregated by the Company from publicly disclosed financial statements. Investment decisions are your responsibility; please consult a professional advisor as needed.