JAPAN LOGISTIC SYSTEMS CORP. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥864M
• Net Income: ¥206M
• EPS: ¥409.31

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

日本ロジテム (TSE:9060) reported a sharp recovery in profitability in FY2026 Q2 on a consolidated JGAAP basis, despite limited disclosure on top-line items. Operating income rose to 864 million yen, up 147.7% YoY, indicating a substantial improvement in operating efficiency and/or pricing power. Ordinary income was 835 million yen, slightly below operating income due to net financial costs and non-operating items. Net income reached 554 million yen, up 173.9% YoY, reflecting the strong operating recovery with manageable tax and financial burdens. Depreciation and amortization were sizable at 1,174.7 million yen, suggesting a capital-intensive asset base, consistent with logistics operations. EBITDA therefore is approximately 2,038.7 million yen for the half, providing ample cushion relative to interest expense of 94.9 million yen. Interest coverage stands at 9.1x, indicating comfortable debt service capacity at current earnings levels. On the balance sheet, total assets are 49.6 billion yen and total equity is 15.4 billion yen; this implies an equity ratio of roughly 31.1% (despite the reported 0% placeholder), with financial leverage (assets/equity) of about 3.21x. Liquidity is tight: current assets of 16.0 billion yen versus current liabilities of 18.4 billion yen yields a current ratio of 87.3% and negative working capital of 2.33 billion yen. Operating cash flow was strong at 1,140.4 million yen, exceeding net income (OCF/NI of 2.06), signaling solid earnings quality with non-cash D&A and/or working-capital release. Investing cash flow was not disclosed (shown as zero), so free cash flow cannot be reliably determined; similarly, revenue and gross profit were not disclosed, so margin ratios derived from sales cannot be assessed. The dividend line shows zero DPS and zero payout ratio for the period; policy signals are therefore absent in the data. Overall, the quarter showcases a clear improvement in core profitability and resilient cash generation, offset by constrained liquidity and a moderately levered balance sheet. The lack of revenue disclosure limits DuPont margin and turnover analysis, but the combination of higher operating income and robust OCF suggests better underlying unit economics or improved contract terms. Key uncertainties remain around capex needs (given high D&A), the durability of cost/pass-through improvements, and the trajectory of working capital. Taken together, earnings momentum is positive, cash flow quality is good, and solvency is acceptable, while liquidity management and capex intensity warrant close monitoring. Data limitations (zeros indicating unreported figures) are material and temper confidence in full-ratio interpretation.

Profitability Analysis

ROE_decomposition: Full DuPont cannot be computed due to undisclosed revenue and thus net margin and asset turnover are not available. Financial leverage is approximately 3.21x (assets/equity = 49.633bn / 15.438bn). Using a prudential annualization of net income (2H assumed similar to 1H), annualized NI ≈ 1.11bn implies an estimated ROE ≈ 7.2% (1.108bn / 15.438bn), but this is sensitive to 2H seasonality. margin_quality: Operating income +147.7% YoY to 864m suggests improved operating margin or mix, though revenue is not disclosed. Ordinary income of 835m implies limited non-operating drag relative to operating profit. Tax expense of 131.9m versus ordinary income of 835m implies an effective tax rate near ~15.8% (estimate), potentially aided by credits/loss carryforwards. operating_leverage: The magnitude of YoY operating profit growth versus undisclosed sales implies positive operating leverage, potentially from better utilization, contract repricing, and cost control (labor/fuel pass-through). High D&A (1,174.7m) indicates sizeable fixed cost base; incremental volumes would typically scale margins in logistics.

Growth Assessment

revenue_sustainability: Revenue was not disclosed; thus, growth breadth cannot be validated. The surge in operating income indicates improved economics that could be sustainable if driven by structural contract resets and efficiency gains rather than one-off items. profit_quality: Net income growth of +173.9% YoY, together with OCF/NI of 2.06, supports quality. Interest coverage at 9.1x adds resilience. Absence of disclosed one-offs suggests operating-led growth, but lack of segment detail is a constraint. outlook: Assuming stable macro logistics demand and continued pass-through of costs, 2H earnings could remain solid. Watch for wage inflation, fuel cost volatility, and any reversal in working capital benefits that supported OCF in 1H.

Financial Health

liquidity: Current assets 16.04bn vs current liabilities 18.37bn => current ratio 0.87x; quick ratio similar (no inventories disclosed). Working capital is -2.33bn, indicating tight short-term liquidity and reliance on revolving facilities or steady OCF. solvency: Total liabilities 33.23bn; equity 15.44bn; implied equity ratio ~31.1% and D/E 2.15x. Interest expense 94.9m with operating income 864m => 9.1x coverage, acceptable for the sector. capital_structure: Leverage is moderate-to-high for a mid-cap logistics operator, consistent with asset-heavy operations (warehouses/vehicles). Refinancing risk appears manageable given coverage, but liquidity metrics warrant close oversight.

Cash Flow Quality

earnings_quality: OCF of 1,140.4m exceeds NI of 554.0m (OCF/NI 2.06), indicating strong conversion supported by non-cash D&A (1,174.7m) and likely working-capital movements. FCF_analysis: Investing CF is undisclosed (shown as zero). Given high D&A, maintenance and growth capex are likely significant; thus, true FCF cannot be assessed from provided data. If capex approximates D&A, indicative FCF would be meaningfully below OCF, but this is a placeholder assumption. working_capital: Negative working capital (-2.33bn) and a sub-1.0x current ratio point to dependence on supplier credit and short-term financing. The OCF strength suggests no immediate stress, but any reversal in payables timing could pressure cash.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are reported as zero for the period, offering no policy signal. Based on annualized NI, capacity exists for distributions, but policy is unknown in this dataset. FCF_coverage: FCF cannot be calculated without investing cash flows. OCF is robust, but capex needs (implied by high D&A) may constrain distributable cash. policy_outlook: Without disclosure of DPS guidance or historical policy, sustainability and direction of dividends cannot be opined on. Monitoring future filings for capex and policy statements is essential.

Risk Assessment

Business Risks:

• Fuel and utility cost volatility affecting contract profitability if pass-through lags
• Labor cost inflation and driver shortages pressuring margins
• Demand cyclicality in key end-markets (manufacturing, retail) impacting volumes
• Contract repricing risk and customer concentration typical in logistics
• Operational disruptions (accidents, weather, supply chain shocks)

Financial Risks:

• Tight liquidity (current ratio 0.87x; negative working capital)
• Moderate-to-high leverage (D/E 2.15x; equity ratio ~31%)
• Refinancing and interest rate risk despite current 9.1x coverage
• Potentially high ongoing capex needs given D&A of 1.17bn per half
• Cash flow volatility from working capital swings

Key Concerns:

• Undisclosed revenue and investing cash flows limit visibility on margins and FCF
• Capex intensity and its impact on free cash flow
• Sustainability of the sharp YoY profit improvement into 2H

Investment Implications

Key Takeaways:

• Core profitability improved significantly with operating income up 147.7% YoY to 864m
• Cash conversion is strong (OCF/NI 2.06) and interest coverage is comfortable (9.1x)
• Liquidity is tight (current ratio 0.87x; working capital -2.33bn) and leverage is notable (D/E 2.15x)
• High D&A underscores capex intensity; FCF is uncertain without investing CF
• Data gaps (revenue, COGS, investing CF, cash balance) constrain full-ratio analysis

Metrics to Watch:

• Disclosure of revenue and gross margin trajectory in upcoming quarters
• Capex and investing cash flows to gauge true FCF
• Net debt and cash & equivalents levels to assess liquidity buffer
• Working capital metrics (DSO/DPO) and OCF sustainability
• Interest expense trend and refinancing terms
• Wage and fuel cost pass-through in contract renewals

Relative Positioning: Compared with domestic mid-cap logistics peers, profitability momentum appears favorable and coverage metrics are solid, but the company exhibits tighter short-term liquidity and potentially higher capex intensity; visibility on margins and FCF is currently below peers with fuller disclosure.

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
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