SENKO Group Holdings Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥16.20B
• Net Income: ¥11.21B
• EPS: ¥50.99

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

SENKO Group Holdings (TSE:9069) reported FY2026 Q2 (cumulative) operating income of ¥16.199bn, down 3.8% YoY, with ordinary income at ¥15.389bn and net income at ¥8.721bn (−16.9% YoY). Revenue and gross profit were not disclosed in the dataset, limiting margin analysis; accordingly, reported gross and EBITDA margins in the feed show 0.0% by virtue of missing sales data rather than actual zeros. Despite the earnings decline, operating cash flow was strong at ¥21.612bn, implying an OCF/Net income ratio of 2.48x and supporting good cash earnings quality. Depreciation and amortization totaled ¥14.326bn, yielding an implied EBITDA of ¥30.525bn for the half-year, which together with interest expense of ¥1.443bn translates to an interest coverage of about 11.2x, indicating ample debt service capacity. Balance sheet scale remains sizable with total assets of ¥774.524bn and equity of ¥243.332bn; the implied equity ratio is approximately 31.4% (calculated as equity/total assets), though the feed lists 0% due to non-disclosure. Total liabilities were ¥475.523bn, corresponding to a debt-to-equity ratio of roughly 1.95x (as provided), consistent with a moderately leveraged profile for an asset-intensive logistics group. Liquidity appears sound with a current ratio of 124.1% and a quick ratio of 112.3%, supported by working capital of ¥44.547bn and inventories of ¥21.883bn. Ordinary income was lower than operating income, suggesting net non-operating costs (including interest and other items) of around ¥0.81bn in the period. Using ordinary income as a proxy for pre-tax profit, the implied effective tax rate is approximately 42.1% (¥6.472bn/¥15.389bn), though this is an estimate given limited disclosure of extraordinary items and minority interests. On capital intensity, D&A of ¥14.3bn in H1 underscores continued investment needs in logistics assets (warehouses, vehicles, systems). Financing cash flow of ¥13.272bn indicates active balance sheet management (debt or equity transactions, dividends, treasury actions), but the lack of detail due to non-disclosure of subcomponents tempers interpretation. Dividend metrics (DPS and payout) show as 0.00 in the feed, which should be treated as undisclosed rather than zero dividend; we therefore refrain from drawing conclusions on actual distributions. With cumulative EPS at ¥50.99 for H1, the company retains capacity to fund capex and potential shareholder returns, subject to cash demands and policy. Without revenue, DuPont margin and asset turnover cannot be computed; however, half-year ROA is roughly 1.13% (¥8.721bn/¥774.524bn) and half-year ROE is about 3.6% (¥8.721bn/¥243.332bn), which would annualize to low single-digit ROA and mid-to-high single-digit ROE if trends persist. Overall, the period shows resilient cash generation amid a modest profit decline and manageable leverage, but the absence of topline and segment data constrains assessment of demand trends, pricing power, and operating leverage. Key uncertainties include the trajectory of freight volumes, ability to pass through labor and fuel costs, and capex/lease commitments for logistics infrastructure. Data gaps (notably revenue, investing cash flows, cash and equivalents, and share count) limit precision; analysis therefore emphasizes available non-zero figures and prudent estimates where appropriate.

Profitability Analysis

ROE_decomposition: Full DuPont decomposition is constrained by missing revenue and average equity. Using available period-end figures, half-year ROE ≈ 3.6% (NI ¥8.721bn / Equity ¥243.332bn). Financial leverage is reported at 3.18x, consistent with an equity ratio near the low 30% range. Net profit margin and asset turnover cannot be computed without revenue; consequently, the reported calculated ROE of 0.00% in the feed reflects data omission rather than actual performance. margin_quality: Operating income declined 3.8% YoY to ¥16.199bn. Ordinary income (¥15.389bn) sits below operating income, indicating net non-operating expense of about ¥0.81bn, mainly interest (¥1.443bn) partly offset by other gains. The implied effective tax rate is ~42.1% using ordinary income as a proxy for pre-tax, suggesting either higher statutory tax burden and/or limited tax credits in the period. EBITDA of ¥30.525bn against undisclosed revenue prevents margin calculation but indicates substantial non-cash expense (D&A ¥14.326bn). operating_leverage: With revenue not disclosed and operating income down 3.8% YoY, we cannot quantify sensitivity of profits to sales. However, the sizable D&A and asset base imply a capital-intensive model where fixed costs are meaningful; in such structures, modest volume/mix changes can drive disproportionate EBIT movements. The decline in net income (−16.9% YoY) vs. operating income (−3.8% YoY) suggests additional pressure below the operating line (higher non-operating costs and/or taxes).

Growth Assessment

revenue_sustainability: Top-line trends are not assessable due to non-disclosure of revenue. Segment or contract pipeline commentary is required to gauge sustainability of demand across 3PL, retail support, chemicals, and housing-related logistics. profit_quality: OCF/Net income at 2.48x supports the quality of earnings, indicating strong cash conversion and/or favorable working capital movements alongside the D&A add-back. Ordinary income trailing operating income points to manageable non-operating drag, chiefly interest. outlook: Absent revenue and segment data, a cautious base case is that H2 profit run-rate remains sensitive to freight volumes, pricing pass-through for fuel and labor, and warehouse utilization. If H1 trends persist, annualized ROE would likely sit in the mid-to-high single digits with stable interest coverage, but tax rate normalization and non-operating items could keep net profit growth constrained.

Financial Health

liquidity: Current ratio 124.1% and quick ratio 112.3% indicate adequate short-term coverage. Working capital stands at ¥44.547bn with inventories of ¥21.883bn, suggesting room to meet obligations without stressing cash, albeit cash and equivalents were undisclosed. solvency: Total liabilities ¥475.523bn vs. equity ¥243.332bn implies D/E of ~1.95x (as provided). Implied equity ratio ≈ 31.4% (calculated), consistent with a moderately leveraged logistics balance sheet. Interest coverage of ~11.2x (EBIT/interest) indicates comfortable debt service capacity. capital_structure: Financial leverage (DuPont) of 3.18x underscores reliance on liabilities to fund a large asset base (¥774.524bn). Financing CF of ¥13.272bn points to active capital structure management during H1, though the mix (debt vs. equity vs. dividends) is not disclosed.

Cash Flow Quality

earnings_quality: Operating cash flow of ¥21.612bn exceeds net income of ¥8.721bn (OCF/NI 2.48x), indicating strong cash realization and supportive working capital dynamics. D&A of ¥14.326bn is a major non-cash component, aligned with asset intensity. FCF_analysis: Investing cash flow was undisclosed (shown as 0), preventing calculation of free cash flow. Absent capex detail, true FCF coverage of obligations cannot be reliably assessed. working_capital: Given positive OCF alongside stable liquidity ratios, working capital likely contributed positively or remained well-managed in H1. Specific drivers (receivables, payables, inventory turns) are not available.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are shown as 0.00 in the feed but should be treated as undisclosed. With H1 EPS at ¥50.99 and solid OCF, capacity exists for distributions; however, actual policy and interim payout cannot be inferred from the provided data. FCF_coverage: FCF cannot be computed due to undisclosed investing cash flows; hence, dividend coverage by FCF is indeterminable. policy_outlook: Given sector norms, dividends are typically balanced against capex and M&A in logistics. The group’s leverage (D/E ~1.95x) and ongoing asset investments suggest a disciplined approach, but explicit guidance is required to assess trajectory.

Risk Assessment

Business Risks:

• Freight volume volatility tied to domestic consumption, industrial production, and e-commerce trends
• Labor shortages and wage inflation in logistics/driver workforce
• Fuel cost fluctuation and pass-through risk in contract pricing
• Capacity utilization risk in warehouses and distribution centers
• Execution risk in large-scale capex and automation projects
• Customer concentration and contract re-pricing cycles
• Regulatory changes in transport (e.g., overtime/workstyle reforms) impacting costs and capacity
• Supply chain disruptions and natural disaster risk affecting operations

Financial Risks:

• Moderate leverage (D/E ~1.95x) with exposure to interest rate increases
• Potential variability in effective tax rate (~42% implied) affecting net profit
• Working capital swings impacting OCF despite reported strength in H1
• Capex intensity and possible off-balance lease/usage commitments
• M&A-related integration and impairment risk (goodwill/intangibles not disclosed)

Key Concerns:

• Lack of disclosed revenue and segment data limits visibility on pricing and volume trends
• Undisclosed investing cash flows prevent assessment of free cash flow and capex sufficiency
• Ordinary income below operating income signals ongoing non-operating cost drag, including interest

Investment Implications

Key Takeaways:

• Operating profit declined 3.8% YoY to ¥16.199bn; net income fell 16.9% YoY to ¥8.721bn
• Cash conversion is strong with OCF/NI at 2.48x
• Interest coverage is ample at ~11.2x despite moderate leverage (D/E ~1.95x)
• Implied equity ratio ~31% indicates a balanced but geared capital structure
• Effective tax rate appears elevated (~42%), weighing on net profit
• Data gaps (revenue, investing CF, cash, share count) constrain precision on margins and FCF

Metrics to Watch:

• Revenue growth and operating margin by segment (once disclosed)
• Capex and investing cash flows to derive true FCF
• Net debt and net debt/EBITDA trajectory
• Working capital turns (DSO/DPO/DIO) and OCF/EBIT conversion
• Contract pricing pass-through for fuel and labor costs
• Tax rate normalization and minority interest impact

Relative Positioning: Within Japanese logistics peers, SENKO appears as a diversified 3PL with moderate leverage, solid interest coverage, and strong cash conversion in H1; however, the absence of disclosed revenue and capex limits direct comparison of margin profile and reinvestment intensity to larger peers.

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