Japan Transcity Corporation FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥62.12B
• Operating Income: ¥4.29B
• Net Income: ¥3.46B
• EPS: ¥51.38

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

Nihon Transcity (TSE:9310) delivered solid profitability in FY2026 Q2 with modest top-line growth and stronger operating leverage. Revenue grew 0.8% year over year to ¥62.1bn, while operating income rose 6.2% to ¥4.29bn, indicating cost discipline and mix improvements. Gross profit reached ¥7.69bn, translating to a gross margin of 12.4%, and operating margin improved to approximately 6.9%. Ordinary income was ¥4.71bn, and net income was ¥3.21bn, yielding a net margin of 5.17%. DuPont decomposition shows ROE of 3.25% driven by a 5.17% net margin, asset turnover of 0.373x, and financial leverage of 1.69x. While the ROE improved with operating leverage, it remains modest relative to typical cost of equity levels for Japanese logistics companies. Cash generation was strong, with operating cash flow of ¥8.88bn and OCF/Net Income of 2.76x, implying high earnings quality and favorable working capital dynamics. The balance sheet is robust: total assets are ¥166.6bn, equity is ¥98.8bn, implying an equity ratio of about 59.3% (the reported 0% equity ratio appears unreported in XBRL, not an actual zero). Liquidity is ample with a current ratio of 242% and minimal inventories, consistent with an asset-light service model in parts of the portfolio. Interest expense was only ¥0.08bn, and interest coverage was a very strong 53.6x, highlighting low financial risk. EBITDA was ¥6.93bn (11.2% margin), and depreciation and amortization were ¥2.64bn, suggesting a reasonably capital-intensive base but manageable maintenance needs. The ordinary-to-net income bridge and the disclosed tax expense imply an effective tax rate around 31%, despite a reported 0.0% in the calculated metrics (the latter is likely a placeholder due to unreported pre-tax data). Investing cash flow and cash balances were shown as zero, which we treat as unreported; hence, free cash flow cannot be reliably derived from the provided data. Dividend per share and payout ratio are also shown as zero (unreported), so dividend capacity and policy cannot be assessed from this extract. Overall, the company demonstrates improving margins, strong liquidity, and high cash conversion but continues to post a subdued ROE, suggesting room for further capital efficiency improvements. Data limitations around investing cash flow, equity ratio, cash balances, and dividends constrain the depth of our conclusions, but the available non-zero metrics point to stable operations and conservative financial risk. Looking ahead, sustaining operating leverage, maintaining high cash conversion, and enhancing asset utilization will be key to improving returns.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 5.17% (Net income ¥3,213m / Revenue ¥62,117m)
• asset_turnover: 0.373x (Revenue ¥62,117m / Total assets ¥166,566m)
• financial_leverage: 1.69x (Assets/Equity; provided)
• calculated_ROE: 3.25% (matches reported)
• ROA: 1.93% (NI ¥3,213m / Assets ¥166,566m) margin_quality:
• gross_margin: 12.4% (¥7,687m / ¥62,117m)
• operating_margin: 6.9% (¥4,285m / ¥62,117m)
• ordinary_income_margin: 7.6% (¥4,712m / ¥62,117m)
• net_margin: 5.17%
• EBITDA_margin: 11.2% (EBITDA ¥6,928m)
• commentary: Operating margin expanded faster than revenue (+6.2% OI vs +0.8% revenue), indicating positive operating leverage and likely cost efficiency. The margin stack (gross → operating → net) is consistent with effective overhead control and low financing burden. operating_leverage: Positive: revenue +0.8% YoY vs operating income +6.2% YoY. Fixed cost absorption and/or mix likely aided incremental margins.

Growth Assessment

revenue_sustainability: Top-line growth of +0.8% YoY is modest, suggesting a stable but subdued demand environment in core logistics operations. profit_quality: Net income grew +0.6% YoY with stronger operating income growth, implying underlying efficiency gains rather than purely non-operating drivers. outlook: Continuation of cost discipline and pricing/mix improvements could sustain margin resilience even on low growth. To accelerate earnings growth, improving asset turnover (0.373x) and expanding value-added services would be beneficial.

Financial Health

liquidity:

• current_ratio: 242.4% (CA ¥46,825m / CL ¥19,314m)
• quick_ratio: 241.0% (minimal inventories of ¥270m)
• working_capital: ¥27,511m
• commentary: Strong near-term liquidity with negligible inventory risk typical of service-heavy logistics. solvency:
• equity_ratio: Approx. 59.3% (Equity ¥98,763m / Assets ¥166,566m). Note: 0% shown in data is unreported, not actual.
• debt_to_equity: 0.71x (likely Total Liabilities/Equity based on provided figures)
• interest_coverage: 53.6x (Operating income ¥4,285m / Interest expense ¥80m)
• commentary: Conservative capital structure and minimal interest burden imply low solvency risk. capital_structure: Total liabilities ¥69,837m vs equity ¥98,763m; interest expense only ¥80m suggests limited interest-bearing debt despite a 0.71x L/E metric.

Cash Flow Quality

earnings_quality: High. OCF/Net Income is 2.76x (¥8,875m / ¥3,213m), indicating strong cash conversion and likely favorable working capital movements. FCF_analysis: Free cash flow cannot be reliably calculated as investing cash flow is shown as zero (unreported). EBITDA of ¥6,928m vs OCF of ¥8,875m implies positive working capital contribution and/or non-cash add-backs. working_capital: Minimal inventories (¥270m) reduce inventory risk; strong OCF suggests efficient receivables/payables management in the period.

Dividend Sustainability

payout_ratio_assessment: Payout ratio shown as 0.0% and DPS as ¥0.00 appear unreported; thus, payout cannot be assessed from the provided data. FCF_coverage: Not assessable due to unreported investing cash flow and capex data; OCF cover appears ample relative to net income but dividend outflows are unknown. policy_outlook: Insufficient disclosure in this extract. Given strong liquidity and low interest burden, capacity for distributions could exist, but policy depends on capex needs and strategic investments in logistics assets.

Risk Assessment

Business Risks:

• Muted top-line growth (+0.8% YoY) indicating demand softness or pricing pressure in logistics.
• Customer concentration and contract repricing risks typical of 3PL and logistics services.
• Labor availability and wage inflation (drivers/warehouse staff) potentially pressuring margins.
• Fuel and energy cost volatility affecting transportation and facility operating costs.
• Operational disruptions (port congestion, supply chain bottlenecks, natural disasters) impacting throughput.
• Capex intensity for warehouses and logistics facilities, with execution and utilization risks.
• Competitive pressure from domestic and global logistics players compressing margins.

Financial Risks:

• Potential increase in interest rates could raise financing costs, though current interest burden is low.
• Working capital swings despite current period strength could affect cash generation.
• Uncertainty around capex and investing cash flows (unreported), which could impact free cash flow.
• Pension or other long-term obligations (not disclosed here) could affect solvency metrics.

Key Concerns:

• ROE of 3.25% remains modest versus likely cost of equity.
• Dependence on cost control for profit growth given slow revenue expansion.
• Limited visibility on free cash flow and dividends due to unreported investing cash flows and DPS.

Investment Implications

Key Takeaways:

• Positive operating leverage: operating income +6.2% on revenue +0.8%.
• Strong cash conversion: OCF/NI at 2.76x with OCF of ¥8.88bn.
• Robust liquidity: current ratio 242% and negligible inventories.
• Low financial risk: interest coverage 53.6x and implied equity ratio ~59%.
• ROE at 3.25% highlights scope for capital efficiency improvements.
• EBITDA margin 11.2% supports stable operating performance.
• Data gaps (investing CF, DPS, cash balance) limit FCF and payout analysis.

Metrics to Watch:

• Revenue growth trajectory and contract win/loss rates.
• Operating margin and EBITDA margin sustainability.
• Asset turnover improvements from utilization and mix.
• OCF sustainability and working capital movements.
• Capex levels and investing cash flows to infer FCF.
• Dividend announcements/payout ratio once disclosed.
• Interest-bearing debt levels and effective tax rate.

Relative Positioning: Within Japan-listed logistics peers, the company exhibits stronger liquidity and cash conversion with conservative solvency, but ROE is below peer leaders; margin profile is stable yet not best-in-class, and growth is subdued.

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