Toyo Logistics Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥665M
• Net Income: ¥694M
• EPS: ¥119.21

Income Statement

Balance Sheet

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

For FY2026 Q2 (consolidated, JGAAP), Toyo Warehouse (東陽倉庫, 93060) delivered solid profit growth despite limited disclosure on revenue and cash flows. Operating income rose to 665 million yen (+12.1% YoY), indicating either improved cost efficiency or favorable mix/pricing, though we cannot attribute the growth between volume and price given undisclosed revenue. Ordinary income reached 928 million yen, outpacing operating income by 263 million yen, implying material net non-operating gains (e.g., investment income, dividends/interest income net of interest expense, or other non-operating items). Net income was 899 million yen (+29.5% YoY), with EPS at 119.21 yen; bottom-line growth exceeded operating growth, supported by non-operating contributions and a standard tax burden. Using ordinary income (as a proxy for pre-tax income under JGAAP) of 928 million yen and income taxes of 223 million yen, the implied effective tax rate is approximately 24.0%, consistent with Japan’s statutory range after credits and adjustments. The company’s balance sheet is conservative: total assets of 50.267 billion yen and total equity of 27.538 billion yen imply an equity ratio of about 54.8% (despite the reported 0.0% figure, which appears undisclosed in XBRL). Total liabilities are 21.941 billion yen, and the debt-to-equity ratio is reported at 0.80x, suggesting moderate leverage for an asset-heavy logistics/warehouse operator. Liquidity looks sound with a current ratio of about 150% and working capital of 4.237 billion yen; inventories are undisclosed, so quick and current ratios coincide. Interest expense was 34.8 million yen, yielding a strong interest coverage of roughly 19.1x based on operating income, indicating ample headroom against financing costs. Ordinary income materially exceeding operating income underscores the role of non-operating items in earnings quality this half, elevating net profit growth beyond the underlying operations. Cash flow statements were not disclosed (zeros represent non-disclosure), so we cannot validate earnings-to-cash conversion or free cash flow. Dividends were not disclosed for the period (DPS shows as 0), and payout/FCF coverage metrics are therefore not assessable. DuPont metrics using reported revenue are not meaningful because revenue was not disclosed; however, a simple ROE proxy using half-year net income over equity is about 3.3% (annualized c. 6.5%), a mid-single-digit level consistent with stable, asset-based businesses. Overall, the quarter shows resilient profitability, robust coverage, and conservative capitalization, but with heavier-than-usual reliance on non-operating income and limited transparency on cash flows and top line. Key watchpoints include the durability of operating gains into H2, the repeatability of non-operating income, and forthcoming cash flow disclosure to substantiate earnings quality.

Profitability Analysis

ROE decomposition is constrained by missing revenue and asset turnover data. Using available figures: half-year ROE proxy = net income / period-end equity ≈ 899m / 27,538m ≈ 3.3% (annualized ~6.5%). Net profit margin cannot be computed due to undisclosed revenue; the reported 0% margin is an artifact of non-disclosure. Operating income grew 12.1% YoY to 665m, indicating positive operating leverage or cost control, but the degree of operating leverage cannot be isolated without revenue. Ordinary income exceeded operating income by 263m, suggesting sizable non-operating gains; interest expense of 34.8m implies most of the gap comes from non-interest non-operating income. Interest coverage is strong at ~19.1x (operating income / interest expense), highlighting robust capacity to service debt. The implied effective tax rate is ~24.0% (223.1m / 928.0m), consistent with a normalized burden. Margin quality: operating earnings growth is healthy, but bottom-line outperformance relies on non-operating items; sustainability will depend on how much of the 263m gap is recurring (e.g., dividend/interest income) versus episodic (e.g., securities gains).

Growth Assessment

Revenue growth and sustainability cannot be assessed due to undisclosed sales. Operating income up 12.1% YoY indicates underlying improvement, likely from utilization, pricing, or cost efficiencies in warehousing/real estate segments. Net income up 29.5% YoY reflects both operating growth and a substantial non-operating tailwind. With ordinary income at 928m vs operating income at 665m, non-operating contributions were pivotal to YoY net growth; if these normalize, profit growth could revert closer to operating growth. EPS of 119.21 yen aligns with net profit growth, but share count is undisclosed, limiting further per-share analysis. Outlook hinges on H2 seasonality in logistics, contract renewals, and potential revaluation or distribution gains; lacking revenue and segment data, we assume steady operations with possible normalization of non-operating items. Key swing factors: domestic industrial activity and trade flows, storage tariffs, real estate occupancy and rents, and interest rate impacts on financial income/expenses.

Financial Health

Balance sheet strength appears solid. Total assets: 50.267bn yen; total equity: 27.538bn yen, implying an equity ratio near 54.8% (reported 0.0% is a disclosure artifact). Total liabilities: 21.941bn yen; reported D/E of 0.80x suggests moderate leverage for an asset-intensive business. Liquidity is comfortable: current assets 12.709bn yen, current liabilities 8.472bn yen, yielding a current ratio ≈150% and working capital ≈4.237bn yen. Quick ratio also ~150% due to undisclosed inventories. Interest burden is modest with interest expense 34.8m yen and coverage ~19.1x, indicating low refinancing risk in the near term. No cash balance was disclosed; hence short-term liquidity buffers (cash-on-hand) cannot be validated from available data.

Cash Flow Quality

Operating, investing, and financing cash flows were not disclosed, so OCF/NI and FCF cannot be assessed; the reported zeros are non-disclosures. Earnings quality indicators from cash flow (e.g., OCF conversion, working capital drag, capex intensity) are therefore unavailable. Working capital stands at ~4.237bn yen, and the current ratio is ~150%, suggesting reasonable near-term liquidity, but without OCF/Capex we cannot judge maintenance capex coverage or free cash flow. The notable reliance on non-operating income this half (ordinary income exceeding operating income by 263m) introduces some uncertainty about recurring cash generation pending CF disclosure.

Dividend Sustainability

Dividend per share, payout ratio, and FCF coverage were not disclosed for the period (zeros indicate non-disclosure). Without OCF and capex data, free cash flow coverage of dividends cannot be assessed. Balance sheet strength (implied equity ratio ~54.8%, interest coverage ~19x) suggests capacity for distributions in principle, but sustainability depends on recurring operating cash flows rather than non-operating gains. Policy outlook cannot be inferred from the provided data; monitor the next results briefing or securities report for dividend policy and payout targets.

Risk Assessment

Business Risks:

• Exposure to domestic industrial production and trade volumes affecting warehousing utilization
• Contract renewal risk and pricing pressure from key logistics customers
• Asset intensity with potential maintenance capex needs impacting free cash flow
• Real estate occupancy and rent dynamics if property leasing is material
• Seasonality and mix shifts between storage, handling, and value-added services

Financial Risks:

• Earnings reliance on non-operating income this half; potential normalization in H2
• Interest rate volatility affecting interest income/expense and asset valuations
• Refinancing and covenant risks are low currently but depend on undisclosed debt terms and maturities
• Cash flow visibility is limited due to non-disclosure of OCF/Capex

Key Concerns:

• Lack of revenue and cash flow disclosure constrains assessment of earnings quality
• Non-operating income (≈263m yen) was a significant driver of ordinary income
• Dividend capacity and policy cannot be evaluated without FCF data

Investment Implications

Key Takeaways:

• Operating income grew 12.1% YoY to 665m yen, indicating solid core performance
• Ordinary income (928m yen) materially exceeded operating income due to non-operating gains
• Net income rose 29.5% YoY to 899m yen; implied effective tax rate ≈24%
• Balance sheet is conservative with an implied equity ratio ~54.8% and D/E ~0.80x
• Interest coverage is strong at ~19x, suggesting low near-term financing risk
• Cash flows and revenue were undisclosed; earnings-to-cash conversion cannot be validated

Metrics to Watch:

• Disclosure of sales and segment breakdown to assess operating leverage and pricing
• OCF, capex, and FCF to evaluate earnings quality and dividend capacity
• Composition of non-operating income (recurring vs one-off gains)
• Debt maturity profile and interest rate sensitivity
• H2 operating income trajectory versus H1 to gauge sustainability

Relative Positioning: Within TSE-listed logistics/warehouse peers, the company appears conservatively capitalized with strong interest coverage and likely mid-single-digit annualized ROE. However, limited disclosure on revenue and cash flows and a notable reliance on non-operating income this half temper relative visibility compared to more transparent peers.

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