The Sumitomo Warehouse Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥5.42B
• Net Income: ¥5.62B
• EPS: ¥89.79

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

Sumitomo Warehouse Co., Ltd. (TSE: 9303) reported FY2026 Q2 consolidated results under JGAAP showing resilient bottom-line performance despite softer core operations. Operating income declined 14.8% YoY to ¥5.4bn, indicating margin pressure or normalization in logistics-related profitability. Ordinary income reached ¥7.7bn, materially above operating income, implying meaningful non-operating contributions (e.g., financial income, equity-method gains, or FX). Net income rose 33.8% YoY to ¥6.9bn, suggesting the combination of non-operating gains and limited extraordinary losses more than offset operating softness. Back-solving from net income and taxes implies income before income taxes of about ¥9.5bn, roughly ¥1.8bn above ordinary income, indicating likely extraordinary gains in the period. Earnings quality appears solid with operating cash flow of ¥10.6bn, an OCF/NI ratio of 1.54x, and EBITDA of ¥10.6bn broadly aligned with cash generation. Leverage remains conservative: total assets were ¥462.1bn and total equity ¥288.7bn, implying an equity ratio around 62.5% (despite a reported 0.0% equity ratio, which is a non-disclosure artifact). Liquidity is comfortable with a current ratio of 164% and working capital of ¥32.8bn. Interest coverage is strong at roughly 24.7x, consistent with low financial risk from interest-bearing debt. Financing cash outflows of ¥12.8bn suggest debt repayments or other shareholder/distribution actions; however, dividends are not disclosed in the dataset for the period. The DuPont metrics provided are not meaningful because revenue was not disclosed (zeros denote non-reporting), but we can infer a modest semiannual ROE of approximately 2.4% using period-end equity, or roughly ~4.8% on a simple annualized basis, acknowledging estimation limitations. Compared with logistics peers, the performance pattern is consistent with industry normalization from prior freight rate peaks, while real estate and port/harbor operations may be stabilizing contributors. Cash flow quality and balance sheet strength provide a cushion for capex and portfolio optimization. Data gaps (notably revenue, cash, dividends, and investing CF) limit granularity on margins, capex intensity, and payout. Overall, the quarter reflects stable financial footing, healthy cash conversion, and bottom-line resilience aided by non-operating/extraordinary items, offset by core operating softness. Monitoring the sustainability of non-operating gains and the trajectory of operating margins will be key into the second half. The company’s conservative capital structure supports strategic flexibility should market conditions fluctuate. Working capital discipline appears sound, which supports ongoing cash generation even amid operating profit pressure.

Profitability Analysis

ROE decomposition is constrained by missing revenue data. Using period-end equity as a proxy for average equity, semiannual ROE ≈ 6.9bn / 288.7bn = ~2.4% (simple annualization ~4.8%), driven primarily by modest profitability and conservative leverage (assets/equity ≈ 1.60x). Net profit margin and asset turnover cannot be computed due to undisclosed revenue; the provided DuPont figures showing 0% are non-informative. Operating profitability softened: operating income fell 14.8% YoY to ¥5.4bn, while EBITDA was ¥10.6bn, implying D&A of ¥5.2bn and an EBIT-to-EBITDA conversion typical for asset-heavy logistics and real estate. Ordinary income (¥7.7bn) exceeded operating income by ¥2.2bn, indicating supportive non-operating factors. The implied pre-tax income (¥9.5bn) suggests ~¥1.8bn of extraordinary gains, lifting net profits despite operating headwinds. Interest burden is light (¥0.22bn), with interest coverage ~24.7x, highlighting low financial drag. Margin quality appears mixed: core margins compressed (OI down), but bottom-line was supported by non-operating/extraordinary items, which may not be recurring. Operating leverage: given asset intensity and fixed costs, the YoY decline in operating income likely reflects negative operating leverage on normalizing logistics volumes/rates, though revenue is undisclosed. Overall, profitability is acceptable but quality leans on non-core contributions this quarter.

Growth Assessment

Revenue is undisclosed; thus, top-line growth sustainability cannot be quantified. Operating income declined 14.8% YoY, implying pressure on core logistics/warehouse margins amid market normalization. Net income grew 33.8% YoY, driven by non-operating and extraordinary items, which may be episodic. EBITDA of ¥10.6bn versus EBIT of ¥5.4bn indicates substantial depreciation typical of warehouse/port assets, suggesting growth will depend on asset utilization and rental/handling rates rather than aggressive volume expansion. With strong liquidity and low leverage, the company is positioned to fund selective growth capex; however, investing CF is undisclosed this quarter, limiting visibility into execution. Outlook: normalization in international freight, stable domestic logistics demand, and steady real estate leasing could support gradual recovery in operating profits, but the sustainability of non-operating/extraordinary boosts is uncertain. Near-term growth quality hinges on improving core margins, maintaining high utilization, and controlling fixed costs. Absent revenue data, we infer moderate near-term growth potential with a focus on margin restoration rather than volume-led expansion.

Financial Health

Liquidity is strong: current assets ¥83.8bn vs. current liabilities ¥51.0bn, yielding a current ratio of 164% and working capital of ¥32.8bn. Quick ratio matches the current ratio given inventories are undisclosed (0 denotes non-reporting), suggesting adequate short-term coverage. Solvency is robust with total equity of ¥288.7bn against assets of ¥462.1bn; implied equity ratio is ~62.5% and financial leverage ~1.60x, despite an uninformative reported equity ratio (0.0%). Debt metrics are not fully disclosed, but the provided debt-to-equity ratio of 0.57x indicates moderate use of debt within a conservative capital base. Interest expense of ¥0.22bn is small relative to EBIT, reinforcing low financial risk. Cash and equivalents are undisclosed; hence, net debt and cash ratios cannot be assessed. Overall, the balance sheet provides ample headroom for cyclical volatility and investment.

Cash Flow Quality

Operating cash flow of ¥10.6bn exceeds net income of ¥6.9bn (OCF/NI = 1.54x), indicating solid cash conversion and limited accrual risk in the period. EBITDA of ¥10.6bn aligns with OCF, reinforcing healthy operating cash generation after working capital movements. Investing cash flow is undisclosed this quarter (reported as 0), so true free cash flow cannot be determined; the provided FCF figure of 0 should be treated as not available. Financing cash flow of -¥12.8bn suggests net outflows likely from debt repayment and/or distributions; with dividends not disclosed, we cannot separate components. Working capital appears well-managed given positive OCF alongside lower operating income, implying either collection efficiency or controlled payables/receivables. Earnings quality is good for the quarter, but reliance on non-operating/extraordinary items for net profit growth tempers durability. Absent capex detail, we cannot assess maintenance vs. growth investment intensity.

Dividend Sustainability

Dividend per share is undisclosed for the period (reported as 0.00), and the payout ratio field is non-informative. With OCF of ¥10.6bn and unknown capex, free cash flow coverage of dividends cannot be assessed reliably (reported 0.00x is a non-disclosure artifact). Historically, logistics companies target stable to gradually rising dividends aligned with long-term cash generation; however, we avoid inference without current disclosure. Balance sheet capacity and OCF would support ordinary dividends under typical policies, but sustainability depends on actual capex and the recurrence of non-operating/extraordinary contributions. Near-term policy outlook: maintain prudence until full-year guidance/dividend forecasts are available.

Risk Assessment

Business Risks:

• Logistics volume and rate normalization reducing operating margins
• Exposure to global trade cycles, port congestion, and shipping market volatility
• Asset intensity with high fixed costs leading to operating leverage in downturns
• Customer concentration risk in contract logistics/warehouse leasing (typical for the sector)
• Competitive pressure from domestic and international 3PLs and e-commerce logistics players
• Regulatory and labor cost risks in port/harbor operations and transportation services
• Execution risk on capital projects and facility expansions

Financial Risks:

• Potential earnings volatility from non-operating/extraordinary items
• Interest rate risk on variable-rate borrowings (debt level not fully disclosed)
• Refinancing/timing risk around large capex cycles (investing CF undisclosed)
• FX exposure from international operations and shipping activities

Key Concerns:

• Operating income down 14.8% YoY indicates core margin pressure
• Net income growth relies on non-operating and extraordinary items that may not recur
• Lack of disclosure on revenue and investing cash flows limits assessment of margin and capex trends

Investment Implications

Key Takeaways:

• Core operating profitability softened, but bottom-line rose on non-operating/extraordinary gains
• Cash conversion is strong (OCF/NI 1.54x), supporting financial flexibility
• Balance sheet is conservative with implied equity ratio ~62.5% and high interest coverage
• Financing outflows suggest deleveraging or distributions; specifics undisclosed
• Visibility is constrained by missing revenue, cash, and investing CF data

Metrics to Watch:

• Revenue and segment breakdowns to gauge volume/mix and pricing
• Operating margin trajectory and EBITDA per asset (utilization of warehouses/ports)
• Non-operating income and extraordinary gains to assess recurrence
• Capex and investing cash flows to evaluate FCF and growth investments
• Net debt and cash balances for leverage and liquidity monitoring
• Working capital turns (receivables/payables days) to validate cash conversion

Relative Positioning: Within Japanese logistics and warehouse peers, Sumitomo Warehouse appears financially conservative with strong liquidity and cash conversion, but faces similar operating normalization pressures; near-term relative performance will hinge on restoring core margins while maintaining low financial risk.

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