Japan Oil Transportation Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥17.89B
• Operating Income: ¥630M
• Net Income: ¥327M
• EPS: ¥153.41

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

Nippon Oil Transportation (9074) delivered a strong FY2026 Q2 performance, with revenue of ¥17.885bn (+4.7% YoY) and a sharp rebound in operating income to ¥0.63bn (+143.1% YoY). Gross profit of ¥1.53bn implies a gross margin of 8.6%, which is thin but consistent with asset-intensive transport/logistics businesses; the operating margin improved to 3.5%, reflecting significant operating leverage. Ordinary income of ¥0.752bn exceeded operating income, indicating positive non-operating contributions (net finance/other income), while net income reached ¥0.507bn (+55.0% YoY). The effective tax cash charge inferred from the statements is ¥0.145bn, with pre-tax profit implied at roughly ¥0.652bn, suggesting an extraordinary loss of about ¥0.1bn (difference versus ordinary income). DuPont metrics show a half-year ROE of 1.88%, composed of a 2.83% net margin, 0.403x asset turnover, and 1.64x leverage, indicating modest profitability on a sizable asset base. Cash generation was robust: operating cash flow was ¥1.883bn, implying OCF/NI of 3.71x and strong earnings quality. Financing cash outflows of ¥1.239bn suggest debt repayments and/or lease/dividend outflows; investing cash flows were not disclosed in the provided data. The balance sheet appears solid, with total assets of ¥44.369bn, equity of ¥27.040bn, and liabilities of ¥17.331bn; the computed equity ratio is approximately 61% (despite a reported 0.0% field), indicating conservative capitalization. Liquidity also looks sound: current assets of ¥12.111bn and current liabilities of ¥7.620bn translate to a current ratio of ~159% and working capital of ¥4.491bn. Interest coverage is healthy at 12.6x (operating income/interest expense), and the debt-to-equity ratio stands at 0.64x. EBITDA of ¥2.444bn (13.7% margin) highlights meaningful depreciation-heavy assets and cushions interest and tax obligations. Reported dividends and share data were not disclosed; payout metrics showing zero should be treated as unavailable rather than actual. Overall, the company exhibits improving profitability, strong cash conversion, and a robust balance sheet, though margin levels remain structurally low, and visibility on capex/FCF is limited due to undisclosed investing cash flows. The outlook hinges on sustaining utilization and pricing in petroleum/chemical logistics, maintaining safety and service levels, and managing capex cycles relative to cash generation.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 2.83%
• asset_turnover: 0.403
• financial_leverage: 1.64
• calculated_ROE: 1.88% (half-year basis) margin_quality: Gross margin of 8.6% and operating margin of 3.5% (¥0.63bn/¥17.885bn) remain thin but improved YoY given the substantial operating income growth. EBITDA margin at 13.7% reflects heavy depreciation (¥1.814bn), consistent with an asset-intensive fleet/logistics model. Ordinary income (¥0.752bn) surpassing operating income signals positive non-operating items; however, implied extraordinary losses (¥0.1bn) reduced pre-tax earnings to ~¥0.652bn. operating_leverage: Revenue grew 4.7% YoY while operating income surged 143.1% YoY, evidencing strong operating leverage from better utilization, mix, price discipline, and/or cost control. The step-up suggests improved route economics or cost normalization after prior headwinds; sustainability will depend on volume and rate stability.

Growth Assessment

revenue_sustainability: The 4.7% YoY revenue increase is steady, likely supported by stable petroleum/chemical transport demand and potential pricing or mix improvements. Given the sector’s contract nature, modest growth appears sustainable if industrial activity remains stable. profit_quality: Net income rose 55.0% YoY with OCF/NI at 3.71x, indicating high-quality earnings backed by cash. Margin expansion was driven by operating leverage rather than one-off gains, although a small extraordinary loss is implied. outlook: Key drivers include fleet utilization, contract renewals, fuel surcharge pass-through, and safety/quality performance. If demand in petrochemicals and related end-markets holds, operating margins may stabilize above prior levels; however, macro softness or fuel/rail cost pressures could cap incremental margin gains.

Financial Health

liquidity: Current assets ¥12.111bn vs. current liabilities ¥7.620bn yield a current ratio of ~158.9% and working capital of ¥4.491bn; inventories were not disclosed. Cash and equivalents were not disclosed in the provided line item. solvency: Total equity ¥27.040bn and total liabilities ¥17.331bn imply an equity ratio of ~60.9% (computed), despite a reported 0.0% placeholder. Debt-to-equity is 0.64x, and interest coverage is 12.6x, indicating comfortable solvency. capital_structure: Leverage is moderate with a solid equity base supporting asset-intensive operations. Financing cash outflow (¥1.239bn) suggests active liability management (debt/lease repayments and/or shareholder returns), but specifics are not provided.

Cash Flow Quality

earnings_quality: Operating cash flow of ¥1.883bn vs. net income of ¥0.507bn (OCF/NI 3.71x) denotes strong cash conversion, aided by non-cash depreciation (¥1.814bn) and likely disciplined working capital. FCF_analysis: Free cash flow cannot be reliably assessed because investing cash flow/capex was not disclosed; the reported FCF of 0 should be interpreted as unavailable rather than zero. Given the asset intensity, capex may be material and is the key determinant of true FCF. working_capital: With current assets comfortably exceeding current liabilities, working capital appears healthy. Detailed components (receivables, payables, inventories) were not disclosed, limiting granularity on cycle dynamics.

Dividend Sustainability

payout_ratio_assessment: Dividend per share and payout ratio were reported as 0.00, which should be treated as undisclosed. Therefore, payout sustainability cannot be directly assessed from this dataset. FCF_coverage: FCF coverage of dividends cannot be determined due to missing investing cash flow and undisclosed dividend amounts. policy_outlook: Given strong OCF and a robust balance sheet, the company likely has capacity for shareholder returns in a normal capex year, but sustainability hinges on capex intensity and policy decisions not provided here.

Risk Assessment

Business Risks:

• Demand cyclicality in petroleum and chemical logistics tied to industrial output
• Contract/pricing pressure at renewals and potential mix shifts
• Fuel and rail access/track costs and pass-through effectiveness
• Operational risks: safety incidents, hazardous material handling, service disruptions
• Regulatory and environmental compliance costs
• Competition from alternative transport modes and logistics providers

Financial Risks:

• Capex intensity and potential for negative FCF in reinvestment cycles
• Exposure to interest rate changes despite current strong coverage
• Potential extraordinary losses (asset disposals/impairments) affecting earnings volatility
• Working capital swings from receivables/contract terms

Key Concerns:

• Lack of disclosed investing cash flows limits visibility on true FCF and capex needs
• Dividend policy and payout not disclosed, constraining return profile assessment
• Thin structural margins heighten sensitivity to cost inflation and volume softness

Investment Implications

Key Takeaways:

• Material operating leverage: +4.7% revenue translated to +143% operating income YoY
• Healthy balance sheet: computed equity ratio ~61%, D/E 0.64x
• Strong cash conversion: OCF/NI 3.71x with sizable depreciation support
• Interest burden manageable: 12.6x coverage on half-year operating income
• Limited visibility on capex and FCF due to undisclosed investing cash flows
• Margins improved but remain structurally low (OPM ~3.5%, GM 8.6%)

Metrics to Watch:

• Capex and investing cash flows (fleet additions, maintenance)
• Utilization rates and yield/pricing by lane and customer segment
• OCF/NI and working capital efficiency (DSO/DPO trends)
• Operating margin and EBITDA margin trajectory
• Safety KPIs and incident rates (license to operate)
• Net debt/EBITDA and interest coverage

Relative Positioning: Within domestic logistics peers, the company shows conservative capitalization, improving profitability, and strong cash generation, albeit with structurally thin margins typical of the sector and visibility constraints on capex and dividends.

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