Shibusawa Logistics Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥2.18B
• Net Income: ¥2.68B
• EPS: ¥57.48

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 Integrated Analysis

Analysis integrating XBRL data (GPT-5) and PDF earnings presentation (Claude)

Executive Summary

For FY2026 Q2 (consolidated, JGAAP), Shibusawa Warehouse reported operating income of 2,178 million yen, down 18.7% YoY, indicating softer core profitability despite limited disclosure on revenue and gross profit. Ordinary income was 2,680 million yen, exceeding operating income by 502 million yen, implying sizable net non-operating gains (e.g., dividends received, equity-method income, or investment-related gains) offsetting weaker operations. Net income rose 24.2% YoY to 3,285 million yen, suggesting a material contribution from non-core or below-operating-line items and/or tax effects. EBITDA was 3,531 million yen, supported by 1,353 million yen of depreciation and amortization, highlighting a capital-intensive asset base typical for logistics and warehousing. Interest expense was modest at 59 million yen, and the interest coverage ratio was a comfortable 36.9x, underscoring low financing burden and solid debt-servicing capacity. Operating cash flow (OCF) was 2,731 million yen, representing an OCF/Net Income ratio of 0.83, which is acceptable but indicates that a portion of earnings uplift may have been driven by non-cash or non-operating items. Total assets stood at 116,948 million yen with total equity of 65,713 million yen and total liabilities of 52,117 million yen, implying a conservative capital structure despite the reported equity ratio being undisclosed. Liquidity appears sound with a current ratio of 177.9% and working capital of 12,649 million yen, supported by low reported inventories (undisclosed) and manageable short-term obligations. The debt-to-equity ratio was 0.79x, indicating moderate leverage and financial flexibility for ongoing investment needs. Ordinary income surpassing operating income and net income growth despite weaker operating profit point to a positive non-operating environment that may not be fully recurring. With investing cash flows undisclosed this period, free cash flow cannot be reliably assessed, and the reported FCF of zero should be treated as a data gap rather than an economic reality. Dividend disclosures (DPS, payout ratio) are not available, though financing cash outflow of 2,023 million yen hints at potential dividend payments and/or debt repayments. DuPont-calculated metrics show financial leverage of 1.78x, but net margin and asset turnover are undisclosed, limiting a full ROE decomposition; the reported ROE is also undisclosed. Effective tax rate and revenue-related margins are not available; given income tax expense of 1,207 million yen, tax dynamics were material but cannot be precisely analyzed without pre-tax income and extraordinary items. Overall, the company exhibits healthy liquidity and interest coverage, stable balance sheet strength, and reasonable cash generation from operations, while profit quality skews toward non-operating contributions in this half. Data limitations—particularly on revenue, gross margin, capex/investing flows, DPS, and share data—constrain the depth of analysis and require cautious interpretation of profitability trends and dividend sustainability.

From Earnings Presentation: Shibusawa Warehouse's Q2 FY2026/3 saw operating revenue increase +1.2% YoY to 40.0 billion yen driven by strong land transportation operations, but operating profit decreased -18.7% to 2.17 billion yen due to reduced warehousing volumes. However, net income surged +24.2% to 3.28 billion yen due to gains on sale of investment securities from accelerated disposal of policy-held stocks. In the logistics segment, land transportation for beverages, daily necessities, food, and medical equipment increased, but operating profit was pressured by increased depreciation at new facilities, lower Q1 utilization rates, reduced warehousing volumes from supply chain changes, and higher personnel costs. The real estate segment saw lower profits due to a decline in building construction contracting (following strong prior-year performance) and maintenance/improvement works. Full-year guidance projects operating revenue of 80.0 billion yen (+1.7%), operating profit of 4.2 billion yen (-10.0%), and net income of 5.5 billion yen (+12.1%), with double-digit net income growth driven by extraordinary gains from policy-held stock reduction. Financial strategy includes accelerating reduction of policy-held stocks to below 20% of net assets by FY2028, targeting dividend payout ratio above 50% with progressive dividends for 8 consecutive years of dividend increases, and implementing a 1-for-4 stock split in October 2025 to expand the investor base.

Financial Analysis

Profitability

ROE decomposition is constrained by missing revenue and net assets per share metrics. Financial leverage is 1.78x, indicating moderate balance sheet gearing that can amplify returns without excessive risk. Net profit margin and asset turnover are undisclosed, preventing calculation of a clean DuPont ROE; reported ROE is also undisclosed. Operating income of 2,178 million yen declined 18.7% YoY, signaling pressure in core operations, potentially from softer volume, pricing pressure, or cost inflation (labor, utilities) in warehousing/logistics. Ordinary income exceeded operating income by 502 million yen, evidencing meaningful non-operating gains that improved headline profitability. Net income of 3,285 million yen increased 24.2% YoY despite weaker operating profit, implying reliance on non-operating or extraordinary items and/or favorable tax effects. EBITDA of 3,531 million yen suggests a still-solid underlying cash earnings base relative to operating income, reflecting the capital-intensive nature of logistics assets. Interest expense of 59 million yen and coverage of 36.9x indicate low financial drag and strong operating capacity to service debt. Margin quality appears mixed: EBITDA resilience contrasts with declining operating profit and undisclosed gross margin, making it difficult to determine the degree of cost pass-through. Operating leverage seems to have worked negatively this period (OI down despite stable cost base), but evidence is limited without revenue and cost of sales data. Overall, profitability quality leans on non-operating items this half, and sustainability depends on recovery in core operating margin.

Growth

Revenue is undisclosed; thus, top-line growth and mix trends cannot be evaluated. Operating income fell 18.7% YoY to 2,178 million yen, pointing to weaker core profit momentum in FY2026 H1. In contrast, net income rose 24.2% YoY to 3,285 million yen, driven by a 502 million yen uplift from non-operating items at the ordinary income line and likely additional below-the-line or tax effects. The divergence between OI and NI suggests near-term growth is not purely operational and may not be fully repeatable. EBITDA of 3,531 million yen indicates that cash earnings capacity remains intact, but the decline in OI implies margin pressure or volume softness. With investing CF undisclosed, capacity additions, maintenance capex, and growth capex timing cannot be assessed, limiting visibility on medium-term earnings expansion. Outlook hinges on normalization of non-operating contributions, stabilization of cost inflation (labor, energy), and demand in key logistics segments (port/warehouse utilization, e-commerce/3PL, and value-added services). In the absence of revenue data, we cannot assess pricing power, contract repricing cadence, or customer mix shifts. Short term, ordinary income strength provides a buffer, but sustaining earnings growth will require a recovery in operating margin and/or improved asset turnover.

Financial Health

Total assets were 116,948 million yen and total equity 65,713 million yen, implying a solid equity base; the reported equity ratio is undisclosed in the dataset. Total liabilities were 52,117 million yen, corresponding to a debt-to-equity ratio of 0.79x, which is moderate for the sector. Liquidity is strong with current assets of 28,884 million yen, current liabilities of 16,235 million yen, and a current ratio of 177.9%; the quick ratio is the same due to undisclosed inventories. Working capital stood at 12,649 million yen, supporting operational flexibility. Interest expense of 59 million yen versus operating income of 2,178 million yen yields robust interest coverage (36.9x), indicating low refinancing risk. The capital structure appears balanced with headroom for maintenance capex and selective investments, though the lack of investing CF disclosure limits clarity on near-term funding needs. No share count data was disclosed, constraining per-share capital metrics.

Cash Flow

Operating cash flow was 2,731 million yen versus net income of 3,285 million yen, for an OCF/Net Income ratio of 0.83, which is reasonable but suggests some non-cash or non-operating contributions to earnings. Depreciation and amortization totaled 1,353 million yen, consistent with a capital-intensive logistics footprint. Free cash flow is undisclosed (reported as zero), as investing cash flows were not reported this period; therefore, we cannot determine true cash conversion after capex. Working capital details are limited, but strong current and quick ratios imply no acute liquidity draw from receivables or payables this half. Financing cash flow was an outflow of 2,023 million yen, potentially reflecting dividends and/or debt repayments, but specifics are not available. Overall, cash earnings quality appears acceptable at the operating level, yet the divergence between OI and NI and the lack of investing CF disclosure temper confidence in underlying free cash generation.

Dividend Sustainability

Dividend per share and payout ratio are undisclosed; reported values of zero reflect absent data rather than actual zero distributions. Financing cash outflow of 2,023 million yen may include dividend payments, but we cannot quantify DPS or payout. With OCF at 2,731 million yen and unknown capex, free cash flow coverage of dividends cannot be assessed; the reported FCF coverage of 0.00x is a placeholder due to missing data. Balance sheet flexibility (D/E 0.79x, strong liquidity) supports capacity to sustain ordinary dividends under typical scenarios, but the reliance on non-operating income this half introduces uncertainty regarding earnings-based payout stability. Policy visibility is limited without management guidance, historical DPS track record for the current fiscal year, or capex plans. In sum, dividend sustainability cannot be conclusively evaluated this period due to data gaps, though baseline financial strength is supportive.

Business Outlook

Full-year guidance projects operating revenue of 80.0 billion yen (+1.7%), operating profit of 4.2 billion yen (-10.0%), ordinary profit of 5.1 billion yen (-8.7%), and net income of 5.5 billion yen (+12.1%). Logistics segment expects operating revenue +2.1% driven by continued strong land transportation (beverages/food) and full-year contribution from new facilities, but operating profit -3.5% due to proactive investments in human capital enhancement and impact of H1 increased depreciation and expenses. Real estate segment forecasts operating revenue -2.4% and operating profit -10.5% due to reaction from strong prior-year building construction and maintenance/improvement works. H1 progress rates are approximately on plan at 50.1% for operating revenue and 51.9% for operating profit. Focus for H2 includes improving utilization rates at new facilities, penetration of rate revisions, and cost control for personnel expenses, with one-time gains from policy-held stock sales supporting net income. Recovery of operating profitability remains a challenge, but management plans to balance medium-to-long-term growth investments and shareholder returns leveraging strong financial foundation.

Management Guidance

Management emphasizes 'strong land transportation operations' and 'early achievement of policy-held stock reduction plan.' H1 operating profit declined due to reduced warehousing volumes, increased depreciation at new facilities, lower Q1 utilization rates, and higher personnel costs, but full-year operating revenue growth expected from full-year operation of new facilities and continued strong beverage/food volumes. While operating profit forecast shows decline, management prioritizes building medium-to-long-term growth foundation through proactive investments in human capital enhancement. Financial strategy clarifies improved capital efficiency and enhanced shareholder returns: targeting policy-held stock net asset ratio below 20% by FY2028 with accelerated plan, executing/planning sales of 1.65 billion yen in FY2024 and over 2.36 billion yen in FY2025. Dividends introduce payout ratio above 50% and progressive policy from FY2026/3, continuing 8th consecutive annual increase with 3 yen increase, expanding investor base through stock split. Flexible share buyback execution to increase total shareholder return ratio. Demonstrates commitment to balance growth investments (CAPEX 1.30 billion yen in H1) and shareholder returns (dividends + buybacks totaling 4.3 billion yen planned for FY2025) while maintaining financial soundness (equity ratio 55.3%, Net DER 0.28, interest coverage ratio calculated above 36.9x).

Strategic Initiatives

• Accelerating policy-held stock reduction: Executing/planning sales of 1.65 billion yen in FY2024 (plan +0.6 billion yen) and over 2.36 billion yen in FY2025 (plan +0.6 billion yen +α), targeting net asset ratio below 20% by FY2028
• Improving capital efficiency: Thorough management conscious of capital cost through policy-held stock reduction, improving ROE (H1 actual approximately 5.0%, annualized approximately 10%)
• Enhanced shareholder returns: Dividend payout ratio above 50% and progressive dividends (applicable from FY2026/3), 8th consecutive annual increase with 3 yen increase (post-split basis), total dividend amount approximately 4x vs FY2019
• Flexible share buyback: Executing 2.36 billion yen in FY2024 and planning 1.56 billion yen in FY2025 based on capital market conditions and stock price levels, improving total shareholder return ratio
• Improving liquidity through stock split: 1-for-4 split effective October 1, 2025, reducing investment unit from approximately 460,000 yen to approximately 116,000 yen, expanding investor base
• Human capital enhancement: Accepting increased personnel and other costs as proactive investment, building medium-to-long-term growth foundation
• Improving utilization rates at new facilities: Recovering profitability through full-year operation and penetration of appropriate rate revisions in H2 and beyond, addressing Q1 utilization decline
• New customer acquisition and appropriate rate revisions for warehousing/distribution: Strengthening/expanding beverage and multi-SKU small-lot logistics, maintaining transportation capacity through appropriate pricing
• Planned maintenance/improvement works in real estate: Maintaining competitiveness of existing facilities and ensuring long-term stable operation

Risk Assessment

Business Risks:

• Core profitability decline: operating income down 18.7% YoY despite supportive non-operating gains
• Cost inflation in labor, utilities, and maintenance potentially compressing margins in warehousing/logistics
• Volume and mix risks in key verticals (port logistics, e-commerce/3PL, manufacturing clients) amid macro uncertainty
• Contract repricing and pass-through timing risk affecting margin recovery
• Asset utilization risk given capital-intensive fixed asset base

Financial Risks:

• Earnings quality risk from reliance on non-operating and potentially non-recurring items to support net income
• Limited visibility on capex and investing cash flows, constraining assessment of free cash flow and future leverage
• Potential interest rate normalization increasing funding costs, albeit current coverage is strong
• Dividend coverage uncertainty due to missing DPS and capex data

Key Concerns:

• Non-operating income (502 million yen uplift to ordinary income) driving headline profitability
• Operating income contraction (-18.7% YoY) without revenue disclosure
• Investing CF and FCF not disclosed, limiting cash return and reinvestment analysis
• Equity ratio and per-share metrics not disclosed, restricting capital efficiency assessment

Risk Factors from Presentation:

• Reduced warehousing volumes from supply chain changes: Approximately 0.39 billion yen negative impact on operating profit in H1 due to changes in existing customers' logistics strategies
• Underutilization of new warehouses: Lower Q1 utilization rates pressured operating profit, approximately 0.24 billion yen negative impact including increased depreciation
• Increased personnel and other costs: Approximately 0.21 billion yen negative impact on operating profit in H1, occurring proactively as investment in human capital enhancement
• Decline in building construction contracting: Reaction from strong prior-year performance, approximately 0.08 billion yen negative in H1, -0.35 billion yen negative impact on real estate segment operating profit for full year
• Maintenance/improvement works at existing facilities: Planned but temporarily pressuring profit margins
• Increased depreciation: Approximately 0.13 billion yen increase in H1 from new facility operations, increasing fixed cost burden

Investment Implications

Key Takeaways:

• Core operations softened: operating income 2,178 million yen (-18.7% YoY) despite resilient EBITDA
• Headline profitability buoyed by non-operating gains: ordinary income exceeds operating income by 502 million yen
• Net income strength (+24.2% YoY to 3,285 million yen) may not be fully repeatable absent operating recovery
• Liquidity and coverage robust (current ratio 177.9%, interest coverage 36.9x), supporting financial flexibility
• Cash conversion decent at OCF/NI 0.83, but FCF unassessable due to undisclosed investing CF

Metrics to Watch:

• Disclosure of revenue and gross margin to gauge pricing power and cost pass-through
• Breakdown of non-operating income and extraordinary items to assess earnings quality
• Capex and investing cash flows for FCF outlook and leverage trajectory
• Warehouse utilization, 3PL volumes, and contract repricing cadence
• Labor and energy cost trends impacting operating margin
• Capital structure metrics (net debt, equity ratio) once fully disclosed

Relative Positioning: Within Japan’s warehousing/logistics peers, Shibusawa Warehouse appears financially conservative with moderate leverage and strong interest coverage, but this half’s earnings mix leans more on non-operating contributions compared with peers emphasizing operating growth; visibility on capex and revenue is currently weaker due to disclosure gaps.

Supplementary Insights (Key Highlights)

• Accelerating policy-held stock reduction ahead of schedule: FY2024 sold 1.65 billion yen (plan +0.6 billion yen), FY2025 plans to sell over 2.36 billion yen (plan +0.6 billion yen +α) with completed/planned sales, targeting achievement of net asset ratio below 20% by FY2028
• Investment securities gains boost full-year net income forecast: Despite expected operating profit decline, net income projected at 5.5 billion yen (+12.1% YoY) due to gains from policy-held stock reduction
• 1-for-4 stock split effective October 1, 2025: Reducing investment unit from approximately 460,000 yen to approximately 116,000 yen to improve liquidity and expand investor base
• Enhanced dividend policy: Introducing dividend payout ratio above 50% and progressive dividends from FY2026/3, increasing annual dividend by 3 yen (post-split basis) for 8th consecutive year, total dividend amount approximately 4x vs FY2019
• Flexible share buyback execution: 2.36 billion yen in FY2024, 1.56 billion yen planned for FY2025, increasing total shareholder return ratio including dividends
• Operating profit variance by business: Positive factors of +0.55 billion yen from new customer acquisition and appropriate rate revisions, offset by negative factors totaling -0.95 billion yen including -0.39 billion yen from reduced volumes due to supply chain changes, -0.21 billion yen from increased personnel and other costs, -0.24 billion yen from underutilization of new warehouses and increased depreciation, -0.08 billion yen from reduced building construction
• Balance sheet: Shareholders' equity +0.5 billion yen (net income 3.2 billion yen - dividends 1.1 billion yen - share buybacks 1.5 billion yen), interest-bearing debt -0.7 billion yen, unrealized gains on policy-held stocks +2.6 billion yen, equity ratio 55.3%, Net DER 0.28, NetDebt/EBITDA 2.13 maintaining financial soundness
• Segment performance: Logistics segment operating revenue +1.6% but operating profit -12.5%; Real estate segment operating revenue -4.3% and operating profit -5.3%, both showing profit declines
• Full-year logistics segment forecast: Despite continued strong performance in beverages/food and full-year contribution from new facilities, operating profit expected to decline -3.5% due to proactive investments in human capital enhancement

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