| Metric | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥2734.5B | ¥2840.7B | -3.7% |
| Operating Income / Operating Profit | ¥159.3B | ¥203.1B | -21.6% |
| Ordinary Income | ¥215.6B | ¥186.2B | +15.8% |
| Net Income / Net Profit | ¥550.7B | ¥322.2B | +70.9% |
| ROE | 14.3% | 8.5% | - |
For the fiscal year ended March 2026, results were: Revenue ¥2,734B (YoY -¥106B, -3.7%), Operating Income ¥159B (YoY -¥44B, -21.6%), Ordinary Income ¥216B (YoY +¥29B, +15.8%), Net Income ¥551B (YoY +¥229B, +70.9%). Revenue declined due to a slowdown in real estate sales despite relatively flat performance in the logistics business; Operating Income fell by over 20% due to fixed-cost burdens and a deterioration in real estate sales mix. At the ordinary income stage, improvement in dividends received ¥3.6B and equity-method investment income ¥2.6B (prior year loss ¥-5.6B) turned results positive. Net income increased substantially due to special gains of ¥677B, primarily investment securities sale gains of ¥673B. However, most of the net income was attributable to one-off items, and next fiscal year guidance (Net Income ¥230B) assumes a reversal. Cash flow from operations (Operating Cash Flow / OCF) declined significantly to ¥65B (prior year ¥297B, -78.0%), creating a marked divergence from Net Income (OCF/NI = 0.12x). Investing cash flow was +¥262B driven by securities disposals, resulting in Free Cash Flow of ¥328B, but the structure is dependent on asset sales.
Revenue: Revenue ¥2,734B (-3.7%) comprised Logistics Business ¥2,380B (+0.4%) and Real Estate Business ¥354B (-24.6%). Logistics accounted for 87.0% of total revenue with warehouse storage fees ¥329B (-0.8%), warehouse handling fees ¥227B (-1.0%), land transportation freight ¥555B (+0.7%), port handling fees ¥204B (+14.2%), and international freight handling fees ¥772B (-6.4%); a slowdown in international handling weighed on overall revenue. Real estate revenue fell sharply due to lower property sales; rental income ¥79B (+0.4%) was stable, but other real estate sales declined from ¥148B to ¥33B (about 80% decrease). By region: Domestic ¥2,190B (prior ¥2,234B, -2.0%), U.S. ¥248B (prior ¥271B, -8.3%), Other ¥296B (prior ¥336B, -11.8%), with notable overseas adjustment. Revenue mix: contracted customer revenue ¥2,427B (88.8%), other revenue (real estate rental etc.) ¥308B (11.2%).
Profitability: Gross profit ¥335B (gross margin 12.3%, prior 12.8%) deteriorated by about -0.5ppt. SG&A ¥176B (SG&A ratio 6.4%, prior 5.7%) rose +0.7ppt due to increased fixed costs, compressing Operating Income to ¥159B (Operating margin 5.8%, prior 7.1%), a -1.3ppt decline. Non-operating income included interest income ¥5B, dividends received ¥36B, and equity-method investment income ¥26B (prior year loss ¥-56B), totaling non-operating income ¥73B. After deducting non-operating expenses ¥17B (including interest expense ¥11B and foreign exchange losses ¥3B), Ordinary Income improved to ¥216B (+15.8%). Extraordinary gains totaled ¥677B, mainly investment securities sale gains ¥673B; extraordinary losses were ¥91B including impairment losses ¥54B and valuation losses on investment securities ¥7B, resulting in profit before tax ¥801B. After income taxes ¥250B (effective tax rate 31.2%) and non-controlling interests ¥3B, net income attributable to owners of the parent was ¥548B. In summary, from a declining-operating-profit position, improvement in non-operating items produced higher ordinary income, and one-off asset sale gains drove a substantial increase in final net income.
Logistics Business (Revenue ¥2,380B +0.4%, Operating Income ¥127B -8.4%, Operating Margin 5.3%) is the core segment accounting for 87.0% of revenue; margin fell -0.5ppt from 5.8% prior. A decline in international freight handling (-6.4%) offset increases in port handling (+14.2%), resulting in modest revenue growth. The decrease in operating income was mainly due to fixed-cost burden and delayed price revisions leading to adverse operating leverage. Real Estate Business (Revenue ¥354B -24.6%, Operating Income ¥117B -14.6%, Operating Margin 33.0%) maintained high margins but saw significant revenue contraction due to fewer sales projects. Rental income rose slightly and was stable, but reduced sales volume depressed overall results. Segment profit (business profit = Operating Income + equity-method investment income + asset-turnover type business profit) was Logistics ¥151B and Real Estate ¥119B, and after corporate adjustments ¥186B, which is approximately +¥27B above operating income ¥159B. Improvement in equity-method investment income (+¥26B) was the main driver.
Profitability: Operating margin 5.8% (down -1.3ppt from 7.1% prior), Net Margin 20.1% (up +8.8ppt from 11.3%) — the net margin increase depends on one-off investment securities sale gains (24.6% of revenue). ROE 14.3% (up +6.1ppt from 8.2%) reflects the large net income increase; next-year guidance Net Income ¥230B implies ROE around 7%. EBITDA ¥336B (Operating Income ¥159B + Depreciation ¥177B) yields an EBITDA margin 12.3% (down -1.2ppt from 13.5%), indicating weakened cash-generation base. Cash Quality: Operating CF ¥65B gives OCF/Net Income 0.12x and OCF/EBITDA 0.19x — very low and showing issues in cash conversion. Interest coverage (EBIT / Interest Expense) 13.8x (EBIT ¥159B / Interest ¥11B) is healthy. Investment Efficiency: Total asset turnover 0.43x (prior 0.45x), ROA (Ordinary Income basis) 3.4% (prior 3.0%) — slight improvement; asset efficiency roughly flat. Financial Soundness: Equity Ratio 60.1% (prior 60.6%, -0.5ppt), Net Assets ¥3,845B (prior ¥3,793B, +¥52B) — balance sheet remains solid. EBITDA-based interest coverage 29.1x, indicating sufficient debt-servicing capacity. Goodwill ¥58B (1.5% of equity) is small, implying strong impairment resilience.
Operating CF ¥65B (prior ¥297B, -78.0%) compressed materially from operating CF subtotal (pre-working-capital changes) ¥233B due to working-capital deterioration and tax payments. Against profit before tax ¥801B, add-backs included Depreciation ¥177B, Impairment ¥54B, Equity-method investment loss ¥-26B, Investment securities sale gains -¥673B, increase in accounts payable ¥36B, increase in retirement benefit liability ¥26B; offsets included corporate tax payments ¥220B, increase in trade receivables ¥33B, and increase in inventory (for real estate sales) ¥95B. From operating CF subtotal ¥233B, working capital and tax payments led to approximately -¥168B cash outflow, landing at OCF ¥65B. Investing CF was +¥262B due to significant cash inflow: investment securities sales ¥698B, purchases -¥249B for net +¥449B, purchases of tangible fixed assets -¥191B, and net change in deposits +¥3B. Financing CF was -¥336B: share buybacks -¥205B, dividend payments -¥121B, short-term borrowings +¥26B, long-term borrowings +¥44B, long-term borrowings repayment -¥57B, bond redemptions -¥80B. Free Cash Flow was Operating CF ¥65B + Investing CF ¥262B = ¥328B, but the structure is heavily dependent on investment securities disposals, limiting normal-period cash-generation capacity. Cash and cash equivalents slightly decreased from ¥610B at the beginning of the period to ¥605B at the end, indicating stable liquidity.
Recurring income totaled about ¥221B (Operating Income ¥159B, Dividends Received ¥36B, Equity-method Investment Income ¥26B), while one-off items — special gains ¥677B (mainly investment securities sale gains ¥673B) — pushed up net income. Non-operating income ¥73B is 2.7% of revenue, below 5% and within a sustainable range, but special gains accounted for 84% of profit before tax, indicating extremely high one-off dependence. Accrual ratio ((Net Income - Operating CF) / Total Assets) is 7.6%, neutral, but operating CF is far below net income, raising concerns about weak cash backing. Comprehensive income was ¥368B; the ¥-183B gap versus net income ¥551B was mainly due to valuation differences on securities ¥-198B from market fluctuations. Other items included OCI share of equity-method affiliates ¥-2B, foreign currency translation adjustment +¥0.4B, and retirement benefit adjustments +¥17B. Goodwill amortization ¥6B (1.9% of EBITDA) is minor and has a small compressive effect on net income.
For FY2027 (year ending March 2027) forecast: Revenue ¥2,800B (vs current +2.4%), Operating Income ¥175B (+9.9%), Ordinary Income ¥216B (+0.2%), Net Income ¥230B (-58.2%). While Operating Income is expected to increase, Net Income will sharply decline due to the absence of this period’s investment securities sale gains of ¥673B. Forecast EPS ¥67.91 versus actual this period ¥155.84 implies more than halving next year. Dividend forecast ¥22 (interim + year-end) versus current period dividend ¥38 represents a reduction of ¥16. Progress rate needs evaluation at the end of the first half; since first-half results are undisclosed, progress assessment is on hold. Forecast assumptions presumably include stable FX and market conditions, successful logistics price revisions, and normalization of real estate sales.
Annual dividend ¥38 (interim ¥18, year-end ¥20) yields a payout ratio of 24.4% (based on Net Income ¥548B) and is conservative. Total dividends are about ¥131B (actual payments ¥121B, including some year-end dividends unpaid), coverage vs Operating CF ¥65B is 0.5x and low, but based on Free Cash Flow ¥328B coverage is 2.5x and sound. Share buybacks of ¥205B were executed, making total returns (dividends ¥131B + buybacks ¥205B) about ¥336B, for a Total Return Ratio of 61.3%. A stock split (1 share → 5 shares) was implemented in November 2024, so the effective year-end dividend equates to the former ¥80 (post-split ¥20 × 5). Next-year dividend forecast ¥22 implies a payout ratio of about 32% on forecast Net Income ¥230B, suggesting a modest increase. Continuation of share buybacks depends on normalization of Operating CF and sustainability of Free Cash Flow, i.e., stable cash generation not reliant on asset disposals.
Divergence between profit and cash: Operating CF / Net Income 0.12x is extremely low. Most of current-period Net Income ¥551B depends on investment securities sale gains ¥673B, while Operating CF is only ¥65B. Corporate tax payments ¥220B, increased inventory for real estate sales ¥95B, and increased trade receivables ¥33B strained cash. If one-off sale gains disappear and Operating CF normalization is delayed, continuity of dividends, share buybacks, and funding for growth investments could be constrained. While an EBITDA margin of 12.3% provides a base, the very low OCF/EBITDA 0.19x points to structural issues in working-capital management and tax payment timing; urgent improvements in cash management are required.
Declining operating margins and segment concentration risk: Operating margin 5.8% (down -1.3ppt) stems from logistics fixed-cost burdens (SG&A ratio +0.7ppt) and deteriorating real estate sales mix. Logistics accounts for 87.0% of revenue, so fluctuations in international freight handling (this period -6.4%) materially impact consolidated performance. Logistics segment operating margin shrank to 5.3% (prior 5.8%), suggesting delayed price revisions and difficulty passing on cost increases. Real estate enjoys high margins (33.0%) but sales volume dropped -24.6%, undermining stability. Weak segment diversification means sustained margin improvement is difficult without advancing logistics pricing and value-added services.
Low capital efficiency and quality of growth investment: Estimated ROIC is low, total asset turnover 0.43x stagnant. With an EBITDA margin of 12.3% vs Operating margin 5.8%, depreciation burden (¥177B, 6.5% of revenue) is significant in this capital-intensive business, indicating a need to improve asset efficiency. This period’s capital expenditures ¥241B exceeded depreciation, and tangible fixed assets abroad rose by U.S. +¥40B and Other +¥15B, yet revenue growth -3.7% suggests investment benefits have not materialized. The goodwill balance ¥58B reaching zero at period-end (due to amortization completion or other reasons) is unexplained but suggests limited M&A earnings contribution. Temporary asset sales supported shareholder returns, but sustainable growth requires normalization of Operating CF, higher utilization in logistics and real estate, and monetization of overseas investments.
Revenue & Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.8% | 6.3% (3.7%–8.5%) | -0.5pt |
| Net Margin | 20.1% | 2.7% (1.6%–4.7%) | +17.4pt |
Operating margin trails the industry median by -0.5ppt, reflecting logistics fixed-cost burdens and slowdown in real estate sales. Net margin exceeds the industry median by +17.4ppt due to investment securities sale gains, but this is a transient effect with low sustainability.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | -3.7% | 5.0% (-0.4%–9.4%) | -8.7pt |
Revenue growth lags the industry median by -8.7ppt, impacted by slowdown in international freight handling and real estate adjustment. While the industry maintains positive growth, the company’s decline signals weakening relative competitiveness.
※ Source: Company compilation
The key point is that most of the final Net Income ¥551B depends on investment securities sale gains ¥673B, and the FY2027 forecast ¥230B already reflects a substantial profit decline. Operating CF ¥65B (OCF/Net Income 0.12x) and tax payments ¥220B plus increased real estate inventory constrained cash. As next fiscal year returns to core earnings, normalization of Operating CF and logistics price revisions and margin improvement are prerequisites for sustainable shareholder returns and growth investment. Balance-sheet metrics — Equity Ratio 60.1% and Interest Coverage 13.8x — are strong, and modest goodwill ¥58B limits balance-sheet risk.
By segment, logistics accounts for 87.0% of revenue and posted Operating Income ¥127B (-8.4%). Decline in international freight handling (-6.4%) and higher SG&A (+0.7ppt) pressured margins. Real estate maintained high margin 33.0% but sales volume fell -24.6%, reducing Operating Income to ¥117B (-14.6%). Overseas revenue adjustments were notable: U.S. -8.3%, Other -11.8%. FY2027 revenue forecast ¥2,800B (+2.4%) and Operating Income ¥175B (+9.9%) assume progress in logistics price revisions and normalization of real estate sales; confirming first-half progress will be important. Shareholder returns were active (payout ratio 24.4% and buybacks ¥205B for a Total Return Ratio 61.3%), but next-year dividend forecast ¥22 (¥16 decline) reflects the drop in one-off gains. Sustainable returns require Operating CF normalization (OCF/EBITDA target >0.5x).
Industry benchmarking shows Operating margin 5.8% is -0.5ppt below median 6.3%, and Revenue growth -3.7% is -8.7ppt below median +5.0%, confirming relative weakness in profitability and growth. Net margin 20.1% is elevated versus the industry median by +17.4ppt due to asset sale gains, but normalization is expected next year. ROE 14.3% is also driven by one-off gains and is expected to decline to about 7% on forecast basis. Structural issues include low estimated ROIC and stagnant total asset turnover 0.43x; monetization of overseas tangible assets (increase ¥55B) and efficiency improvements in domestic logistics are keys to improving capital efficiency. The ¥54B impairment and elimination of goodwill balance suggest limited M&A contribution and raise questions about the quality of organic growth.
This report is an AI-generated financial analysis document based on XBRL financial statement data. It is not a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the Company from public financial statements. Investment decisions are your own responsibility; please consult a professional advisor as appropriate.