MITSUI-SOKO HOLDINGS Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥11.63B
• Net Income: ¥7.44B
• EPS: ¥74.69

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

Mitsui-Soko Holdings (TSE:9302) reported FY2026 Q2 consolidated results under JGAAP with strong operating momentum but mixed bottom-line dynamics, amid notable disclosure gaps (several revenue-related fields are unreported in XBRL). Operating income rose 22.9% YoY to ¥11.63bn, evidencing resilient core operations and effective cost control. Ordinary income was ¥11.50bn, slightly below operating income, indicating modest non-operating headwinds (including interest expense of ¥0.40bn). Net income declined 4.4% YoY to ¥5.59bn, suggesting higher tax burden or extraordinary items despite stronger operations. Depreciation & amortization totaled ¥5.10bn, bringing EBITDA to ¥16.73bn, consistent with a capital-intensive logistics and real-estate-backed business model. Operating cash flow was robust at ¥17.84bn, yielding an OCF/Net Income ratio of 3.19x, which points to strong earnings quality and likely favorable working capital movements. Balance sheet strength is solid: total assets ¥294.27bn, equity ¥137.23bn, implying financial leverage (assets/equity) of ~2.14x and an implied equity ratio of ~46.6% (the reported equity ratio of 0% is an unreported placeholder). Liquidity is healthy with a current ratio of 1.47x and quick ratio of 1.45x, underpinned by low inventories relative to current assets. Interest coverage is strong at ~29x (operating income/interest expense), indicating ample headroom against rate and credit shocks. The debt-to-equity ratio is indicated at 1.10x, suggesting moderate leverage, though off-balance sheet leases under JGAAP may understate effective leverage. Revenue and margin-related ratios are not computable from the disclosed dataset (revenue is unreported), so DuPont margin and turnover figures shown as 0%/0.000 are not meaningful. Tax expense of ¥2.57bn implies an effective tax rate around the low 30% range based on pre-tax income estimates, contradicting the 0% metric shown (again due to unreported items). Dividend data (DPS, payout, FCF coverage) are also unreported, limiting dividend sustainability analysis, though cash generation appears supportive. Overall, the company demonstrates improved operating profitability, strong cash conversion, and sound liquidity and solvency, but bottom-line softness and disclosure gaps warrant caution in interpreting growth quality and capital allocation. Key watchpoints include normalization of freight markets, warehouse utilization, tax-rate normalization, and upcoming capex plans that could affect free cash flow trajectory.

Profitability Analysis

ROE decomposition is constrained by unreported revenue, preventing calculation of net margin and asset turnover. Financial leverage (assets/equity) is approximately 2.14x (¥294.27bn/¥137.23bn), implying moderate balance-sheet gearing. Operating income rose 22.9% YoY to ¥11.63bn, indicating positive operating leverage, likely from cost discipline and stable warehouse/contract logistics utilization. Ordinary income at ¥11.50bn was slightly below operating income, reflecting net non-operating costs (interest expense ¥0.40bn, partially offset by other non-operating items). Net income fell 4.4% YoY to ¥5.59bn, suggesting higher effective taxes and/or extraordinary charges overwhelmed the operating improvement. EBITDA of ¥16.73bn reflects a meaningful D&A load (¥5.10bn), consistent with logistics assets; margin assessment is not possible without revenue. Interest coverage is robust at ~29.1x, indicating profitability comfortably covers financing costs. Despite revenue data gaps, the step-up in operating profit suggests resilient core demand and/or price discipline. Margin quality appears supported by low inventory risk (inventories ¥1.50bn) and a service-heavy mix; however, absent revenue, gross margin and operating margin cannot be validated. Overall, profitability quality looks sound at the operating level, with bottom-line compression driven by below-the-line factors rather than core operations.

Growth Assessment

Operating income growth of +22.9% YoY demonstrates strong operational execution and potential operating leverage. Ordinary income is solid and close to operating income, implying limited non-operating drags. Net income declined 4.4% YoY despite higher operating profit, pointing to tax/extraordinary factors; tax expense of ¥2.57bn implies an effective tax rate around 31–32%. Revenue is unreported, so we cannot assess top-line growth sustainability or mix (ocean/air forwarding vs. warehousing/contract logistics vs. real-estate related income). Profit quality appears strong at the operating level; OCF/Net Income of 3.19x suggests earnings are cash-backed, with likely working-capital support. For outlook, normalization of global freight rates and volumes could weigh on forwarding revenues, but recurring warehouse/real-estate income and contract logistics should provide stability. D&A of ¥5.10bn implies ongoing asset reinvestment needs; future capex (unreported here) will influence growth capacity. Overall growth visibility is moderate: operations are improving, but revenue opacity and potential freight-cycle headwinds temper confidence.

Financial Health

Liquidity is solid with current assets of ¥83.24bn versus current liabilities of ¥56.47bn, yielding a current ratio of 1.47x and a quick ratio of 1.45x; low inventories (¥1.50bn) indicate limited stock risk. Working capital stands at ¥26.77bn, providing buffer against short-term shocks. Total assets are ¥294.27bn and total equity ¥137.23bn, implying an equity ratio of ~46.6% (reported 0% is unreported) and financial leverage of ~2.14x, which is conservative for the sector. Total liabilities are ¥150.63bn; the stated debt-to-equity ratio of 1.10x indicates moderate leverage, though the exact split between interest-bearing debt and other liabilities is not disclosed here. Interest coverage is strong at 29.1x, indicating comfortable solvency. Cash and equivalents are unreported, limiting assessment of immediate liquidity headroom, and investing cash flows are also unreported, constraining visibility into net debt and capex. Under JGAAP, operating leases may be off-balance-sheet, implying effective leverage could be higher than book metrics suggest. Overall, balance sheet quality appears sound with ample liquidity and manageable leverage.

Cash Flow Quality

Operating cash flow of ¥17.84bn exceeds net income of ¥5.59bn (OCF/NI 3.19x), indicating strong cash conversion and likely working capital release or non-cash charges (D&A ¥5.10bn) supporting OCF. EBITDA of ¥16.73bn is closely aligned with OCF, reinforcing cash earnings quality. Free cash flow cannot be computed because investing cash flows (including capex) are unreported; the FCF figure shown as 0 is not meaningful. Working capital appears well managed given the low inventory balance and healthy current ratios, but detailed AR/AP movements are unavailable. The elevated OCF relative to NI suggests low accrual risk this period; however, sustainability depends on the persistence of working capital tailwinds and future capex requirements. Absence of cash and cash equivalents disclosure constrains assessment of net cash vs. net debt position.

Dividend Sustainability

Dividend data are unreported (DPS, payout ratio, and FCF coverage show as 0 due to non-disclosure). Based on fundamentals, cash generation (OCF ¥17.84bn) and profitability (NI ¥5.59bn) suggest capacity to fund dividends, but without capex and investing cash flows we cannot judge true FCF coverage. Policy visibility is limited; Mitsui-Soko historically balances shareholder returns with growth investment in logistics facilities, but no period-specific guidance is provided here. Given the strong interest coverage and adequate liquidity, the balance sheet could support distributions; sustainability, however, hinges on capex cadence, freight-cycle normalization, and tax-rate stability. Conclusion: insufficient disclosed data to quantify payout safety this period, though operating cash strength is supportive qualitatively.

Risk Assessment

Business Risks:

• Freight market normalization reducing forwarding yields and volumes
• Exposure to global trade cycles and macro slowdown
• Fuel and energy cost volatility impacting transportation and warehouse utilities
• Labor availability and wage inflation in logistics operations
• Customer concentration risk in contract logistics
• Competitive pressure from global integrators and domestic peers
• Regulatory and environmental compliance costs for logistics facilities
• FX fluctuations affecting overseas operations and translation

Financial Risks:

• Potential underestimation of leverage due to off-balance-sheet leases under JGAAP
• Interest rate increases raising financing costs despite current high coverage
• Capex intensity for warehouse development affecting free cash flow
• Tax rate variability and possible extraordinary items impacting net income
• Liquidity assessment limitations due to undisclosed cash and investing cash flows

Key Concerns:

• Revenue and margin transparency are limited due to unreported revenue data
• Net income declined YoY despite stronger operations, driven by below-the-line items
• Unreported investing cash flows impede evaluation of true FCF and dividend coverage

Investment Implications

Key Takeaways:

• Operating profit up 22.9% YoY to ¥11.63bn, indicating strong core execution
• Net income down 4.4% YoY to ¥5.59bn due to higher taxes/extraordinary items
• OCF robust at ¥17.84bn (3.19x NI), signaling high cash earnings quality
• Liquidity solid (current ratio 1.47x; quick ratio 1.45x) and leverage moderate (assets/equity ~2.14x)
• Interest coverage strong at ~29x; balance sheet resilient
• Key disclosures missing (revenue, cash balance, investing CF, dividends), limiting full assessment

Metrics to Watch:

• Reported revenue growth and segment mix (forwarding vs. warehousing/contract logistics)
• Operating income and ordinary income trajectory vs. freight rate normalization
• Effective tax rate and any extraordinary gains/losses
• Capex and investing cash flows to derive true FCF and net debt
• Working capital movements (AR/AP days) and OCF/NI ratio sustainability
• Leverage including lease-adjusted metrics and interest coverage
• Warehouse occupancy and pricing, new facility additions

Relative Positioning: Within Japanese logistics and warehouse operators, Mitsui-Soko appears operationally resilient with strong cash conversion and moderate leverage; however, disclosure gaps on revenue and investing cash flows make current-period comparability to peers less precise, and sensitivity to freight-cycle normalization remains a sector-wide headwind.

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