These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.
| Metric | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥5237.4B | ¥4710.8B | +11.2% |
| Operating Income | ¥108.4B | ¥433.2B | -75.0% |
| Profit Before Tax | ¥99.1B | ¥408.6B | -75.8% |
| Net Income | ¥56.1B | ¥281.1B | -80.0% |
| ROE | 0.4% | 2.1% | - |
Although revenue increased in Q1, profit declined substantially due to higher costs and an increase in the effective tax rate. Revenue secured double-digit growth at ¥5,237.4B (¥4,710.8B in the same period last year, YoY+11.2%), while Operating Income fell substantially to ¥108.4B (¥433.2B in the same period last year, YoY-75.0%), Profit Before Tax to ¥99.1B (down 75.8%), and Net Income attributable to owners of the parent to ¥53.5B (¥270.8B in the same period last year, YoY-80.2%). The Operating Income margin declined to 2.1%, down 7.1 points from 9.2% in the same period last year, primarily because operating expenses (+18.7%) increased faster than revenue. The main Full-Service Carrier (FSC) Business fell into a segment loss, which was the central factor compressing earnings.
【Revenue】Revenue was ¥5,237.4B (YoY+11.2%), with the FSC Business, which accounts for 78.2% of the revenue mix, leading overall growth at ¥4,097.3B (YoY+14.7%). The Mileage / Financial and Commerce Business increased slightly to ¥378.5B (YoY+11.6%), while the LCC Business rose modestly to ¥281.0B (YoY+4.1%). Other Businesses declined to ¥480.5B (YoY-9.3%).
【Profit and Loss】Operating expenses increased to ¥5,168.5B (YoY+18.7%), outpacing revenue growth, and the operating expense ratio rose to 98.7% (92.4% in the same period last year). Personnel expenses were ¥1,007.5B (YoY+6.4%, 19.2% of revenue). Although the growth rate itself was slower than revenue growth, personnel expenses were insufficient to offset the overall increase in costs, including fuel expenses. On a segment profit basis (Profit Before Financial and Corporate Income Taxes), the FSC Business fell into a loss of △¥8.1B (a profit of ¥307.2B in the same period last year), while the LCC Business also fell into a loss of △¥1.3B (a profit of ¥42.4B in the same period last year). The Mileage / Financial and Commerce Business increased profit to ¥120.5B (¥102.4B in the same period last year), supporting company-wide earnings. Profit Before Tax remained at ¥99.1B (YoY-75.8%), while the increase in the effective tax rate to 43.4% (31.2% in the same period last year) also contributed to the compression of Net Income. The conclusion is higher revenue but lower profit: this quarter saw higher costs and tax burdens significantly erode profits relative to the quality of revenue growth.
Segment profit (based on Profit Before Financial and Corporate Income Taxes) varied significantly across businesses. The FSC Business generated revenue of ¥4,097.3B (78.2% of the total) but recorded a segment loss of △¥8.1B, falling into the red from a profit of ¥307.2B in the same period last year and becoming the primary cause of the deterioration in company-wide earnings. The LCC Business also failed to maintain profitability, recording a segment loss of △¥1.3B on revenue of ¥281.0B (¥42.4B in the same period last year). In contrast, the Mileage / Financial and Commerce Business secured higher profit of ¥120.5B on revenue of ¥378.5B (¥102.4B in the same period last year). Although its revenue scale is small, its relative contribution to profit has increased. Other Businesses, including the travel business, increased profit to ¥26.7B on revenue of ¥480.5B (¥13.6B in the same period last year). By business, the focus going forward will be how far stable mileage- and finance-related earnings can offset the deterioration in profitability of the two core segments responsible for passenger transportation.
【Profitability】The Operating Income margin was 2.1%, down 7.1 points from 9.2% in the same period last year, while the Net Income margin based on Net Income attributable to owners of the parent also declined to 1.0% (5.8% in the same period last year). ROE remained at 0.4% (quarterly basis), with the compression of Profit Before Tax and the increase in the effective tax rate (43.4%) being the main downward factors. 【Cash Flow Quality】Operating Cash Flow was ¥978.5B, approximately 18 times Net Income attributable to owners of the parent of ¥53.5B, indicating sound cash backing for earnings. 【Investment Efficiency】Total asset turnover was approximately 0.16x, reflecting the asset-intensive business model. Investments in equity-method affiliates expanded to ¥629.1B (¥335.3B at the end of the previous fiscal year), creating potential for future contributions from equity-method earnings. 【Financial Soundness】The Equity Ratio improved to 42.9%, up 2.6 points from 40.3% at the end of the previous fiscal year, while total interest-bearing debt declined to ¥8,279.2B (¥8,759.2B at the end of the previous fiscal year). Interest paid was ¥42.97B against Operating Income of ¥108.4B, resulting in interest coverage of approximately 2.5x; the recovery of earnings remains a point of attention from the perspective of financial resilience.
Operating Cash Flow increased to ¥978.5B (¥810.3B in the same period last year, +20.8%), with an increase of ¥449.7B in contract liabilities, including advance fares, and an increase of ¥196.5B in operating liabilities boosting cash inflows. Investing Cash Flow was -¥665.7B, consisting of -¥432.0B for the acquisition of property, plant and equipment, as well as a new outflow item of -¥294.5B for the acquisition of investments in equity-method affiliates. Financing Cash Flow was +¥1,141.1B, primarily reflecting proceeds of ¥1,936.4B from the issuance of shares, which exceeded bond redemptions of -¥300.0B, dividend payments of -¥206.9B, lease payments of -¥56.3B, and other items. As a result, Free Cash Flow, the sum of Operating Cash Flow and Investing Cash Flow, was ¥312.9B, comfortably covering dividend payments. Cash and cash equivalents accumulated to ¥1,1574.2B at period-end (¥1,101.9B at the end of the previous fiscal year), with equity financing and strong Operating Cash Flow creating substantial liquidity.
Against Net Income attributable to owners of the parent of ¥53.5B, comprehensive income attributable to owners of the parent was a loss of -¥159.4B, while consolidated comprehensive income was a loss of -¥167.0B, representing a significant divergence from recurring earnings capacity. The primary cause of this divergence was deterioration in Other Comprehensive Income (OCI), particularly the negative ¥186.4B valuation difference on cash flow hedges, which pushed down comprehensive income. As a temporary factor in the income statement, gains (losses) on disposal of property, plant and equipment were a positive -¥3.1B (compared with -¥35.9B in the same period last year), narrowing from the previous year; the special profit and loss impact was limited. Equity-method investment income contributed a positive ¥5.96B, and its contribution may change going forward as investments in equity-method affiliates expand. From an accrual perspective, the substantial increase in contract liabilities (+¥449.7B) represents cash received in advance and revenue recognized after cash collection, and therefore has a healthy quality-of-earnings characteristic. Conversely, the increase in inventories (-¥80.1B) and the increase in trade receivables (-¥29.9B) tied up funds in working capital.
Against the full-year revenue forecast of ¥2,0950B, Q1 actual revenue was ¥5,237.4B, representing progress of 25.0% and tracking a simple pro rata pace. In contrast, against the full-year Net Income forecast of ¥1,100B (attributable to owners of the parent), Q1 Net Income attributable to owners of the parent was only ¥53.5B, representing a low progress rate of 4.9%. This gap reflects both the business characteristic of demand being weighted toward the second half and the sharp decline in the Operating Income margin in Q1 (2.1%); achieving the full-year plan presupposes normalization of profitability from Q2 onward. Neither the earnings forecast nor the dividend forecast was revised as of this quarter.
The full-year dividend forecast remains unchanged at ¥96 per share, with no revision as of this quarter. Based on the period-average number of shares outstanding of 429,827,706 shares, the estimated annual dividend total is approximately ¥412.6B, resulting in an estimated Payout Ratio of approximately 37.5% against the full-year Net Income forecast of ¥1,100B. Dividends paid in Q1 amounted to ¥206.9B, corresponding to the year-end dividend based on the results for the previous fiscal year (FY ended March 2026). No share buybacks were conducted during the quarter (¥0B), and shareholder returns consisted solely of dividends. Given cash on hand of ¥1,1574.2B and strong Operating Cash Flow, the financial backing for the dividend is secure.
Deterioration in the profitability of the core FSC Business: Segment profit (Profit Before Financial and Corporate Income Taxes) fell into a loss of ¥8.1B, a significant deterioration from a profit of ¥307.2B in the same period last year. The decline in earning power of this core business, which accounts for 78.2% of the revenue mix, has a significant impact on company-wide earnings.
Lower resilience to interest burdens: Interest paid was ¥42.97B against Operating Income of ¥108.4B, leaving interest coverage at approximately 2.5x. Although interest-bearing debt declined to ¥8,279.2B from the end of the previous fiscal year, the relative burden of interest expenses increases when earnings are low.
Volatility in Other Comprehensive Income (OCI): The valuation difference on cash flow hedges was significantly negative at -¥186.4B, and consolidated comprehensive income turned into a loss of -¥167.0B. This structure directly links fluctuations in interest rates and foreign exchange markets to volatility in equity.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 2.1% | 7.1% (4.3%–8.6%) | -5.0pt |
| Net Income Margin | 1.1% | 5.9% (2.8%–8.5%) | -4.8pt |
Both profitability indicators were below the industry median, and Q1 profitability was relatively low within the transportation industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 11.2% | 3.3% (0.2%–7.6%) | +7.9pt |
The revenue growth rate was significantly above the industry median, and top-line growth was relatively high within the industry.
※Source: Compiled by the Company
Revenue increased by +11.2%, led primarily by the FSC Business, while the Operating Income margin fell sharply from 9.2% to 2.1%. Costs increased faster than revenue, and a return to profitability in the FSC Business segment will be the key to restoring margins.
Operating Cash Flow reached ¥978.5B, approximately 18 times Net Income attributable to owners of the parent. Supported by the buildup of contract liabilities (deferred revenue), cash-generation capacity remained robust beyond the level of profit reported in the income statement.
Progress against the full-year plan was 25.0% for revenue but only 4.9% for Net Income, indicating progress weighted toward the second half. The increase in the effective tax rate (43.4%) and deterioration in OCI were also observed as factors driving fluctuations in quarterly profit and equity.
This is a mechanically calculated reference range based solely on publicly available data using a residual income model (Ohlson-type model with an explicit 5-year fade). It is not a forecast of the market share price or a recommendation to take any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear | ¥2,577 |
| base | ¥2,621 |
| bull | ¥2,669 |
| Calculation Assumption | Value |
|---|---|
| Book Value per Share (BPS) | ¥2,499 |
| Adjusted Forecast EPS | ¥271.1 |
| Cost of Equity r | 9.15% (10-year government bond 2.65% + equity risk premium 6.00% + size premium 0.50%) |
| Residual Income Persistence Coefficient ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 37.5% |
| Forecast EPS Confidence Adjustment | ×1.060 (based on the industry’s historical guidance achievement rate) |
| Implied PBR / PER |
Sensitivity: ¥2,548–¥2,698 at ±1% for the Cost of Equity, and ¥2,618–¥2,626 at ±0.1 for ω.
Notes:
(Calculation model: Residual Income Model / Interest-rate reference month: 2026-06 / This value does not forecast or guarantee the future share price)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It is not a recommendation to invest in any specific security. The industry benchmark is reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own responsibility, with consultation with professionals as necessary.
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| 1.05x / 9.7x |