| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥797.4B | ¥786.2B | +1.4% |
| Operating Income / Operating Profit | ¥41.0B | ¥46.7B | -12.2% |
| Ordinary Income | ¥48.6B | ¥55.8B | -13.0% |
| Net Income / Net Profit | ¥57.1B | ¥43.5B | +31.4% |
| ROE | 8.3% | 6.7% | - |
For the fiscal year ended March 2026, Revenue was ¥797.4B (YoY +¥11.2B +1.4%), Operating Income was ¥41.0B (YoY -¥5.7B -12.2%), Ordinary Income was ¥48.6B (YoY -¥7.2B -13.0%), and Net Income was ¥57.1B (YoY +¥13.6B +31.4%). While the company recorded higher revenue but lower operating profit, a special gain on sale of investment securities of ¥48.0B drove final profit growth. The operating margin declined 0.9pt to 5.1% (prior year 6.0%), pressured by rising costs and a low-margin structure in the logistics business. Meanwhile, bottom-line profit was inflated by non-recurring items, lifting EPS to 111.65円 (prior year 84.31円, +32.4%). ROE improved to 8.3% from 7.8% last year, but reliance on special gains underscores the need to strengthen core earning power in the next fiscal year. On the balance sheet, the company materially reduced long-term borrowings and maintains a very healthy leverage profile with Debt/EBITDA at 1.5x and Interest Coverage at 38x.
[Revenue] Revenue reached ¥797.4B (prior year ¥786.2B, +1.4%), achieving modest growth. By segment, the core Logistics Business accounted for ¥739.6B (+1.8%), representing 92.8% of total revenue, driven by steady demand in warehousing & handling, port transportation, and land transportation. The Real Estate Business recorded ¥57.8B (-2.7%), a slight decline and 7.2% of total revenue. While logistics drove revenue growth, price revisions and product mix improvements were limited, and lagged cost pass-through pressured gross profit. The Real Estate Business saw declines due to some tenant move-outs and stagnation in rent revisions.
[Profitability] Operating Income decreased to ¥41.0B (prior year ¥46.7B, -12.2%), with the operating margin down 0.9pt to 5.1% (prior year 6.0%). Cost of sales was ¥710.6B (89.1% of sales), and gross margin remained slim at 10.9%. SG&A was ¥45.8B (5.7% of sales), up +9.6% from ¥41.8B, as increases in personnel expenses, fees and other fixed/semi-fixed costs compressed operating profit. By segment, Logistics Business operating income was ¥36.6B (-5.7%), margin 5.0%, while Real Estate Business operating income was ¥31.3B (-6.4%), margin 54.2%, maintaining high profitability. However, increases in corporate-level expenses of ¥27.0B (prior year ¥25.7B) contributed to lower consolidated profits. Ordinary Income was ¥48.6B (-13.0%); non-operating income of ¥10.3B (dividends received ¥6.6B, interest received ¥1.4B, equity-method income ¥1.0B, etc.) provided support but could not offset operating decline. A special gain on sale of investment securities of ¥48.0B was recorded, boosting profit before tax to ¥90.4B (prior year ¥70.8B, +27.6%). After deducting income taxes of ¥26.3B (effective tax rate 29.1%), Net Income attributable to owners of the parent was ¥57.1B (+31.4%), turning an operating decline into final profit growth.
The Logistics Business reported Revenue ¥739.6B (+1.8%) and Operating Income ¥36.6B (-5.7%), with an operating margin of 5.0% (approx. 5.3% prior year), remaining at a low level. The business is a composite of warehousing & handling, port transportation, land transportation, international logistics, and logistics facility leasing, but low-margin structure persists and cost increases such as labor and energy squeezed margins. The Real Estate Business posted Revenue ¥57.8B (-2.7%) and Operating Income ¥31.3B (-6.4%), maintaining a high operating margin of 54.2%. Primarily leasing and property management of office buildings, it is a stable income source, although absolute amounts declined with slight revenue decreases. The large margin gap between segments continues, with logistics’ low margins and real estate’s high margins underpinning consolidated profit.
[Profitability] Operating margin at 5.1% fell 0.9pt from 6.0% year-on-year, pressured by cost increases and a low-margin structure. ROE improved to 8.3% from 7.8%, driven mainly by higher net income from special gains. Net profit margin rose temporarily to 7.2% (prior year 5.5%), but attention is required due to the gap with core operating margin decline. [Cash Quality] Operating Cash Flow (OCF) was ¥57.4B, providing 1.00x coverage of Net Income ¥57.1B, indicating robust coverage. OCF/EBITDA (OCF / (Operating Income + Depreciation)) was 0.81x, somewhat weak due to tax payments and working capital movements. [Investment Efficiency] Total Asset Turnover was 0.67x (Revenue ¥797.4B / Total Assets ¥1,193.0B), with the weight of fixed assets (¥557.9B) and investment securities (¥316.7B) suppressing turnover. ROIC (NOPAT / Invested Capital) is estimated at 4.3%, potentially below the cost of capital, indicating a need to replace low-return assets and improve core margins. [Financial Soundness] Equity Ratio is 57.4% (prior year 55.6%), and Debt/Equity is 0.15 (interest-bearing debt ¥103.8B / shareholders’ equity ¥684.4B), both very low. Debt/EBITDA is 1.5x and Interest Coverage is 38x (Operating Income + interest/dividends received / interest paid), indicating ample financial flexibility.
OCF was ¥57.4B, down -9.6% from ¥63.5B last year, but coverage of Net Income ¥57.1B remains healthy at 1.00x. OCF subtotal (before working capital changes) was ¥75.4B, adding back depreciation ¥30.2B, equity-method income ¥1.0B, etc., with changes in trade receivables of -¥1.0B and trade payables of -¥0.1B indicating minimal working capital movement. Tax payments of ¥25.4B, interest and dividend receipts of ¥9.3B, and interest payments of ¥1.9B were reflected, and tax burden pressured cash flow despite neutral working capital. Investing Cash Flow was positive ¥3.2B, a significant improvement from -¥60.1B in the prior year. Capital expenditure was -¥17.4B (0.58x of depreciation ¥30.2B), restrained, while proceeds of ¥56.8B from sale of investment securities contributed positively. Financing Cash Flow was -¥66.7B, reflecting repayment of long-term borrowings -¥28.0B, net reduction in short-term borrowings -¥1.7B, bond redemption -¥0.3B, share buybacks -¥15.6B, and dividend payments -¥25.1B, implementing shareholder returns and debt repayment. Free Cash Flow (OCF + Investing CF) was ¥60.6B, maintaining solid positive cash generation, and cash and deposits were ¥113.0B (prior year ¥118.3B), remaining at a high level.
Recurring earnings consist of Operating Income ¥41.0B and non-operating income such as dividends received ¥6.6B, interest received ¥1.4B, and equity-method income ¥1.0B, with non-operating income at 1.3% of sales—within an appropriate range. However, this period’s Net Income was significantly boosted by a special gain on sale of investment securities of ¥48.0B. The special gain is large at 6.0% of sales and is strongly non-recurring. OCF ¥57.4B / Net Income ¥57.1B is 1.00x, indicating high alignment between accounting profit and cash flow. Nonetheless, OCF/EBITDA (OCF / (Operating Income ¥41.0B + Depreciation ¥30.2B)) is 0.81x, showing somewhat weak cash conversion. The divergence between Ordinary Income ¥48.6B and Net Income ¥57.1B is due to the special gain, with Net Income exceeding Ordinary Income by 17.5%. There is downside risk in the next period from reversal of special gains, making improvement in core earnings critical.
The company’s plan for the fiscal year ending March 2027 forecasts Revenue ¥830.0B, Operating Income ¥50.0B (+22.0%), Ordinary Income ¥57.0B (+17.3%), Net Income attributable to owners of the parent ¥65.0B, EPS forecast 116.30円, and dividend forecast 35.00円 (post stock split). Operating Income is expected to increase ¥9.0B from the current ¥41.0B, assuming cost optimization, tariff revisions, and utilization improvements. Ordinary Income is planned at ¥57.0B (from ¥48.6B), incorporating steady contribution from non-operating income. Net Income forecast ¥65.0B is a +13.8% increase from ¥57.1B (including special gains this period) and is conservative given the ¥48.0B special gain this year; the plan implies earnings improvement on an ordinary basis. Dividend forecast 35.00円 (post-split) signals continued shareholder returns. Achievement of the plan requires margin improvement in the Logistics Business and stable income from the Real Estate Business.
Dividend presentation is affected by the stock split (1 share → 4 shares effective October 1, 2025), which may cause display inconsistencies, but the actual total dividend payout was approximately ¥25.1B (CF statement basis). Interim dividend 96円 (pre-split), year-end dividend 32円 (post-split; equivalent to 128円 pre-split), resulting in an annual dividend equivalent to 224円 on a pre-split basis. The disclosed payout ratio relative to Net Income ¥57.1B is 41.5%, but the cash dividend payout of ¥25.1B / Net Income ¥57.1B implies an effective payout of about 44%. Share buybacks amounted to ¥15.6B (CF statement basis), bringing total shareholder returns to approx. ¥40.7B and an effective Total Return Ratio of about 71%. Coverage of total returns by FCF ¥60.6B is 0.67x, an acceptable range, but the year is notable for inflated final profits due to special gains; sustainability of returns on a core-earnings basis requires attention. Financial flexibility (cash ¥113.0B, Debt/EBITDA 1.5x) is ample and risk of dividend cut is low. Next period dividend forecast 35円 (post-split) indicates continued shareholder return stance.
Low-margin structure risk in the Logistics Business: With operating margin at 5.0% and slim profitability, delays in passing through rising costs such as labor and energy could further compress earnings. The Logistics Business accounts for 92.8% of revenue, so impacts on consolidated performance would be significant. If tariff revisions and shifts to higher-value-added services do not progress, margin deterioration may continue.
Market price volatility risk of investment securities: The company holds investment securities of ¥316.7B (26.6% of total assets) and recorded a ¥48.0B gain on sale this period, but valuations and sale timing are market-dependent. There is ¥96.8B of unrealized gains in valuation difference on securities, which could turn into valuation losses or impairments if markets deteriorate. Reliance on special gains introduces risk of profit reversal in subsequent periods and may force portfolio reassessment.
Underinvestment in capital expenditure and erosion of future competitiveness risk: Capital expenditure of ¥17.4B is only 0.58x depreciation of ¥30.2B, possibly below maintenance levels. Continued underinvestment could lead to facility aging, loss of competitiveness, and missed customer opportunities. Delays in new logistics facility development or refurbishment of existing facilities would hinder medium-term revenue growth and improvement in capital efficiency.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.1% | 6.3% (3.7%–8.5%) | -1.2pt |
| Net Profit Margin | 7.2% | 2.7% (1.6%–4.7%) | +4.4pt |
Operating margin underperforms the industry median of 6.3% by -1.2pt, indicating heavy cost structure, while net profit margin exceeds the median by +4.4pt due to the recording of special gains.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 1.4% | 5.0% (-0.4%–9.4%) | -3.6pt |
Revenue growth rate lags the industry median 5.0% by -3.6pt, placing the company in the lower tier for growth momentum.
※Source: Company compilation
Exit from dependence on special gains and establishment of sustainable earning power: Net Income ¥57.1B (+31.4%) this period heavily depended on sale gains of investment securities ¥48.0B, while core Operating Income decreased to ¥41.0B (-12.2%). The next fiscal plan targets Operating Income ¥50.0B (+22.0%), but execution of tariff revisions, utilization improvement, and cost optimization will be decisive. Structural reforms are needed to raise Logistics margin from 5.0% into the 6% range, including accumulation of higher-value-added projects and review of low-return businesses.
Room to accelerate growth investment utilizing financial capacity: With Debt/EBITDA 1.5x, cash ¥113.0B, and Equity Ratio 57.4%, the balance sheet is very healthy, but capital expenditure of ¥17.4B (0.58x depreciation ¥30.2B) raises concerns about underinvestment. To maintain competitiveness mid-term, new logistics facility development and renewal of existing facilities are essential, and deploying financial flexibility toward proactive investment is expected. The current period’s positive investing CF was driven by sale of securities; a shift toward growth investments in subsequent periods will be a key point to watch.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific securities. Industry benchmarks are reference data compiled by the company based on public financial statements. Investment decisions are your own responsibility; please consult a professional advisor as needed.