| Metric | This Period | Prior Year | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1962.4B | ¥1934.0B | +1.5% |
| Operating Income / Operating Profit | ¥114.1B | ¥132.8B | -14.0% |
| Ordinary Income | ¥158.1B | ¥175.0B | -9.7% |
| Net Income / Net Profit | ¥186.8B | ¥211.3B | -11.6% |
| ROE | 5.7% | 7.7% | - |
The fiscal year ended March 2026 recorded Revenue of ¥1,962.4B (vs prior year +¥28.5B, +1.5%), while Operating Income was ¥114.1B (vs prior year -¥18.7B, -14.0%), Ordinary Income ¥158.1B (vs prior year -¥16.9B, -9.7%), and Net Income ¥186.8B (vs prior year -¥24.5B, -11.6%), reflecting a profit decline driven by cost increases. Operating margin deteriorated to 5.8% from 6.9% a year earlier (‑1.1pt), with margin compression in the core Logistics business weighing on consolidated profitability. Non-operating income centered on Dividend Income received ¥45.4B (prior year ¥41.8B) supported the ordinary income level, and Special Gains totaling ¥116.0B including Gain on Sales of Investment Securities ¥56.2B supplemented Net Income. Comprehensive income reached ¥628.5B, driven by Unrealized Gains on Available-for-sale Securities +¥416.8B which materially increased Net Assets. Breaking out of the dual decline structure of Logistics (revenue up, profit down) and Real Estate (revenue down, profit down) remains a key challenge.
[Revenue] Revenue was ¥1,962.4B (YoY +1.5%) and remained resilient. By segment, the Logistics Business accounted for 94.7% of revenue composition, growing to ¥1,859.1B (YoY +1.8%). Demand for integrated logistics including warehousing, port transportation and international transport remained firm, but there are signs of margin deterioration as cost increases could not be fully passed through. The Real Estate Business declined to ¥103.3B (YoY -3.4%). Although maintaining a high margin of 42.4%, it was affected by the absence of prior-year leasing income and property sales. Consolidated gross margin declined 0.8pt to 11.2% (prior year 12.0%), with structural increases in personnel costs, warehouse maintenance and outsourced expenses compressing gross profit.
[Profitability] Operating Income fell sharply to ¥114.1B (YoY -14.0%). Logistics segment Operating Income stood at ¥135.4B (YoY -3.8%), with operating margin down to 7.3% (prior year 7.7%). Real Estate segment Operating Income declined significantly to ¥43.8B (YoY -19.0%), with margin deteriorating 8.2pt to 42.4% (prior year 50.6%). SG&A was ¥105.7B, up from ¥99.2B (a 6.6% increase), and SG&A ratio rose 0.3pt to 5.4% from 5.1% a year earlier. Increases in personnel and administrative costs hindered operating leverage. Non-operating income amounted to ¥54.5B, led by Dividend Income received ¥45.4B, which helped cushion the decline to Ordinary Income ¥158.1B (YoY -9.7%). Special gains totaled ¥116.0B (Gain on Sales of Investment Securities ¥56.2B, Gain on Sales of Fixed Assets ¥8.5B), materially exceeding Special Losses ¥12.5B (Impairment / Loss on Disposal of Fixed Assets ¥12.1B), expanding Profit Before Tax to ¥261.6B. After corporate taxes ¥74.8B and Non-controlling Interests ¥10.2B, Net Income came to ¥186.8B (YoY -11.6%), resulting in a year of revenue growth but profit decline.
The Logistics Business recorded Revenue ¥1,859.1B (YoY +1.8%) and Operating Income ¥135.4B (YoY -3.8%), reflecting revenue growth but profit decline. Operating margin fell 0.4pt to 7.3% from 7.7% a year earlier. Demand for integrated logistics—warehousing, ports and land transport—remained steady and external customer sales were firm, but structural increases in personnel, fuel and outsourced costs could not be fully absorbed through price adjustments, pressuring profitability. The Real Estate Business posted Revenue ¥103.3B (YoY -3.4%) and Operating Income ¥43.8B (YoY -19.0%), a decline in both revenue and profit. While operating margin remained high at 42.4%, it deteriorated 8.2pt from 50.6% the prior year. Partial declines in rental income and the absence of prior-period property sale gains were the main causes. Segment assets increased to Logistics ¥2,029.6B and Real Estate ¥791.9B, with investments being actively allocated to both property development and warehouse facilities.
[Profitability] Operating margin 5.8% worsened 1.1pt from 6.9% the prior year, with margin compression in the core Logistics business weighing on consolidated profitability. Net margin 9.5% remained high due to the contribution of special gains. ROE fell to 5.7% (prior year ROE 7.7%), and ROA (on Ordinary Income basis) was 3.3% (prior year 4.0%), indicating weakened capital efficiency. EBITDA was ¥225.4B (Operating Income ¥114.1B + Depreciation ¥111.3B), with an EBITDA margin of 11.5%, indicating a certain level of cash generation. EBIT was ¥114.1B and Interest Coverage was 18.9x, reflecting strong interest-paying capacity. [Cash Quality] Operating Cash Flow / Net Income was 1.51x and Operating Cash Flow / EBITDA 1.25x, indicating solid cash generation. Accrual ratio was -5.6%, showing strong cash backing for profits. Conversely, FCF / Net Income was 0.44x, and FCF was limited due to active investing. [Investment Efficiency] Total Asset Turnover was 0.38x and Fixed Asset Turnover 0.98x, reflecting a heavy asset structure. Capital expenditures were ¥256.4B, 2.30x depreciation, balancing renewal and growth investments. [Balance Sheet Strength] Equity Ratio improved to 63.4% (prior year 60.0%), and Liquidity Ratios were strong with Current Ratio 209% and Quick Ratio 144%. Interest-bearing debt totaled ¥905.9B (Long-term borrowings ¥443.2B, Corporate bonds ¥250.0B, Short-term borrowings ¥91.7B), with Debt/EBITDA 4.02x and Interest Coverage 18.9x, indicating high financial resilience.
Operating Cash Flow was ¥281.6B (YoY -11.3%), down but maintained 1.51x of Net Income ¥186.8B, indicating solid cash generation. Operating CF subtotal was ¥226.2B, and adding back non-cash expenses such as Depreciation ¥111.3B to Profit Before Tax ¥261.6B produced a robust level. Changes in working capital had minor impact on CF with Trade Receivables up ¥8.8B and Trade Payables up ¥6.4B. Corporate tax payments were ¥67.2B, interest and dividend receipts ¥48.2B, and interest payments ¥5.5B, yielding a favorable net cash inflow. Investing Cash Flow was -¥200.0B, doubling from -¥100.5B prior year, with capital expenditures ¥256.4B (2.30x depreciation) accelerating investments in warehouses and property development. Proceeds from sale of investment securities ¥60.6B and sales of fixed assets ¥15.4B partially offset the investment expansion. FCF remained positive at ¥81.6B, securing resources for dividends ¥80.6B and share buybacks ¥35.0B. Financing Cash Flow was -¥143.0B, reflecting long-term borrowings raised ¥201.1B, repayments ¥89.4B, bond redemptions ¥120.0B, dividend payments ¥80.6B and share repurchases ¥35.0B. Cash and deposits decreased by ¥54.7B to ¥423.8B (prior year ¥478.5B); adjusting for FX effects +¥2.6B, the net decline was ¥58.8B, reflecting active investment and continued shareholder returns.
Quality of earnings shows a significant divergence between Ordinary Income and Net Income, indicating high dependence on non-recurring items. Operating Income ¥114.1B was supplemented by Non-operating Income ¥54.5B centered on Dividend Income received ¥45.4B, lifting Ordinary Income to ¥158.1B; the contribution from non-operating items reached 47.8% of operating profit. Furthermore, Special Gains ¥116.0B (Gain on Sales of Investment Securities ¥56.2B, Gain on Sales of Fixed Assets ¥8.5B) greatly expanded Profit Before Tax to ¥261.6B, resulting in profits beyond recurring operating cash generation. On the other hand, Operating CF ¥281.6B exceeded Net Income ¥186.8B, with Operating CF / Net Income at 1.51x, indicating solid cash backing for profit. With an accrual ratio of -5.6% the intrinsic quality of earnings is healthy, but the dependence on non-operating and special gains presents continuity risk. Comprehensive income ¥628.5B was driven by Unrealized Gains on Available-for-sale Securities +¥416.8B, which substantially increased Net Assets; however, this contains market value volatility risk.
Full Year guidance is Revenue ¥2,000.0B (progress to full-year sales 98.1%), Operating Income ¥122.0B (YoY +6.9%), Ordinary Income ¥161.0B (YoY +1.8%), Net Income ¥172.0B (EPS forecast ¥228.68), and Dividend forecast ¥51.5 per share. First half results were Revenue ¥1,962.4B, Operating Income ¥114.1B, Ordinary Income ¥158.1B, Net Income ¥186.8B, representing 98.1% achievement of Revenue guidance, 93.5% achievement of Operating Income, 98.2% achievement of Ordinary Income, and 108.6% achievement of Net Income—some items have already exceeded full-year forecasts. The plan for Operating Income growth of +6.9% YoY assumes penetration of second-half price revisions, ramp-up of new warehouses, and recovery in real estate leasing. Improvement from the first-half Operating Margin of 5.8% is necessary, making cost containment and utilization rate improvements critical. The modest Ordinary Income growth assumption +1.8% implies a flat outlook for non-operating income. Net Income is forecasted to decline YoY due to the non-recurring nature of special gains. Dividend forecast ¥51.5 per share corresponds to a half-year amount (midterm ¥51.5, year-end ¥51.5) and suggests a stable annual pace of ¥103 per share.
Annual dividend is ¥103 per share (interim ¥51.5, year-end ¥51.5 expected), with Payout Ratio 44.6%, a moderate level. Total dividends ¥80.6B are covered by FCF ¥81.6B with an FCF coverage of 1.01x, indicating that dividends can be financed from free cash flow, albeit narrowly. Share buybacks of ¥35.0B were executed, bringing total shareholder returns to ¥115.6B and Total Return Ratio to 61.9%, demonstrating an active return stance. While payout ratio and Total Return Ratio are within sustainable bounds, continued high capital expenditures (2.30x depreciation) create a structure prone to FCF tightening. Proceeds from sale of investment securities and dividend income support return capacity, but stability of Operating CF and a recovery in profit growth are key to future dividend increases and additional buybacks. With an Equity Ratio of 63.4% and Cash & Deposits ¥423.8B, the foundation for stable dividends is considered strong.
Profitability deterioration risk in the Logistics Business: The core Logistics business (94.7% of revenue composition) has seen operating margin decline to 7.3% (prior year 7.7%), with structural increases in personnel and outsourcing costs continuing. Delays in price pass-through or renewed fuel price hikes could further depress Operating Income of ¥135.4B and significantly pressure consolidated earnings. Timely execution of utilization improvements and price revisions is urgent.
Market value volatility risk of investment securities: Investment securities ¥2,163.0B (42.2% of total assets) could incur substantial valuation losses in a market downturn. This fiscal year Unrealized Gains on Available-for-sale Securities +¥416.8B boosted comprehensive income and strengthened Net Assets, but a reversal could simultaneously erode equity and unwind deferred tax liabilities, causing rapid deterioration in financial metrics. Instability in Dividend Income received ¥45.4B and the non-recurring nature of Gain on Sales of Investment Securities ¥56.2B increase volatility risk at both ordinary and special profit stages.
FCF tightening risk from high capital expenditures: Capital expenditures ¥256.4B equal 2.30x depreciation ¥111.3B and represent active growth and renewal investments, but subtracting this from Operating CF ¥281.6B leaves FCF only ¥81.6B. Considering dividends and share buybacks totaling ¥115.6B, cash on hand is declining; continued high investment levels could flip FCF into negative territory. While long-term borrowings have increased ¥138.3B to supplement funding, an interest-rate upcycle would raise financing costs and capital cost, pressuring earnings and worsening the balance between investment returns and costs.
Profitability / Return
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.8% | 6.3% (3.7%–8.5%) | -0.5pt |
| Net Margin | 9.5% | 2.7% (1.6%–4.7%) | +6.8pt |
Operating margin is 0.5pt below the industry median 6.3%, with Logistics-driven cost increases pressuring profitability. Conversely, Net Margin 9.5% significantly exceeds the industry median 2.7% due to gains on sale of investment securities and Dividend Income, indicating a profit structure dependent on non-operating and special gains.
Growth / Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 1.5% | 5.0% (-0.4%–9.4%) | -3.5pt |
Revenue growth of +1.5% trails the industry median +5.0% by 3.5pt, reflecting slower growth in the core Logistics segment. Declines in real estate revenue also suppressed growth, placing top-line expansion among the lower ranks in the industry.
※ Source: Company compilation
Margin recovery potential in the Logistics Business: Although operating margin fell to 7.3% from 7.7% a year earlier, if price revisions penetrate and new warehouses ramp up utilization, the full-year Operating Income +6.9% growth scenario could materialize, allowing margins to recover into the 8% range. A pricing strategy that factors in structural increases in personnel and outsourcing costs, along with integrated operational efficiencies across warehousing, ports and land transport, will be key to simultaneously achieving margin improvement and revenue growth.
Two-sided nature of the investment securities portfolio: Investment securities ¥2,163.0B (42.2% of total assets) provide stable Dividend Income ¥45.4B and contributed Unrealized Gains +¥416.8B this fiscal year, boosting Net Assets to ¥3,250.7B. In favorable markets, comprehensive income and Equity Ratio can improve materially; conversely, a market downturn can produce valuation losses and reversal of deferred tax liabilities, causing large swings in financial metrics. While recognizing the dependence on non-operating and special gains, improving recurring cash generation and portfolio diversification to dampen volatility are key points of focus.
Realization of returns from high capital expenditures and improvement in capital efficiency: Capital expenditures ¥256.4B (2.30x depreciation) are being invested aggressively in new warehouses and property development, but ROE 5.7% and ROA 3.3% remain low. If new properties achieve higher utilization, rental income increases, and logistics facilities operate with higher turnover, improvements in Total Asset Turnover 0.38x and recovery in operating margin can be expected. Visualizing investment returns and generating stable FCF are critical to enhancing shareholder value and expanding return capacity.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your own responsibility; please consult a professional as necessary.