KAWANISHI WAREHOUSE CO.,LTD. FY2026 Q2 Earnings Report

Financial Highlights

• Operating Income: ¥590M
• Net Income: ¥344M
• EPS: ¥44.95

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend 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

Kawanishi Warehouse Co., Ltd. (TSE: 9322) reported FY2026 Q2 consolidated JGAAP results with operating income of ¥590 million (+8.8% YoY) and net income of ¥344 million (-2.4% YoY). Several line items, including revenue and gross profit, are unreported in the disclosed dataset (zeros indicate non-disclosure rather than true zeros), limiting margin and turnover analysis. Despite this limitation, profitability at the operating level improved, while earnings after non-operating items and taxes softened marginally. Ordinary income was ¥573 million, slightly below operating income, reflecting modest non-operating costs including interest expense of ¥23.9 million. The effective tax burden appears elevated this period, with income taxes of ¥219.0 million implying an estimated effective tax rate near 39% based on net income and taxes disclosed. Cash generation was strong: operating cash flow of ¥1,297 million was 3.77x net income, supported by substantial non-cash depreciation (¥686 million) and likely working capital tailwinds. EBITDA was ¥1,276 million, indicating healthy interest coverage and operating resilience. Balance sheet strength is notable: total assets were ¥38.214 billion and total equity ¥24.345 billion, implying an equity ratio of roughly 63.7% and financial leverage (assets/equity) of 1.57x. Liquidity is solid with a current ratio of 194% and working capital of ¥4.659 billion, suggesting ample near-term headroom. Leverage is moderate at 0.57x debt-to-equity, and interest coverage is a comfortable 24.7x on an EBIT basis, underscoring conservative financial risk. ROE based on reported period net income and equity is approximately 1.4% for the half-year (roughly 2.8% annualized), constrained mainly by subdued net margin data (not disclosed) rather than balance sheet leverage. With revenue unreported, operating margin and asset turnover cannot be assessed; however, the improvement in operating income and healthy OCF/EBITDA conversion point to improving core operations and good earnings quality. No dividend is reported for the period (DPS and payout both unreported), so dividend policy and coverage cannot be inferred from this dataset. Overall, the company exhibits improving operating performance, strong cash conversion, and a robust balance sheet, offset by weaker bottom-line growth due to below-the-line items and taxes, and limited visibility on top-line drivers and capex due to non-disclosures.

Profitability Analysis

ROE_decomposition: Reported DuPont components are incomplete due to unreported revenue and margins. Using available data: net income/average equity proxy ≈ 344,000,000 / 24,345,000,000 = ~1.4% for the half-year (≈2.8% annualized). Financial leverage is 1.57x (assets/equity). Net margin and asset turnover cannot be computed because revenue is unreported. margin_quality: Operating income rose 8.8% YoY to ¥590 million, indicating improved core profitability. Depreciation of ¥686 million is substantial relative to operating income, implying capital-intensive operations and that a meaningful share of earnings is non-cash, which supports OCF but can suppress accounting margins. Ordinary income at ¥573 million suggests modest non-operating drag (interest expense ¥23.9 million and likely other small items). The estimated effective tax rate is about 39%, weighing on net margin this period. operating_leverage: EBITDA of ¥1,275.9 million vs. EBIT of ¥590.0 million shows a large depreciation component; incremental operating income growth (+8.8% YoY) with high fixed costs implies potential operating leverage as volumes/pricing improve, but revenue data is unavailable to validate throughput effects. Interest coverage at ~24.7x EBIT indicates that financial leverage does not constrain operations.

Growth Assessment

revenue_sustainability: Revenue is unreported, preventing analysis of volume/price drivers or customer mix. The increase in operating income suggests underlying resilience in core warehousing/logistics services, but sustainability cannot be verified without top-line disclosure. profit_quality: Operating income growth with strong OCF (OCF/EBITDA ≈ 1.02) points to healthy earnings quality. The divergence between operating and net income growth (-2.4% YoY NI) stems from below-the-line items and taxes rather than operational deterioration. outlook: Assuming steady logistics demand, rent revisions, and utilization, operating income momentum could continue. Key swing factors will be energy/utilities costs, labor availability/wage inflation, and any changes in property-related expenses. The elevated tax rate this half may normalize, which would aid net income, but visibility is limited due to data gaps.

Financial Health

liquidity: Current assets ¥9,615.4 million and current liabilities ¥4,956.6 million yield a current ratio of ~194% and working capital of ¥4,658.8 million, indicating strong short-term liquidity. Quick ratio is effectively the same given unreported inventories. solvency: Total liabilities ¥13,955.3 million vs. equity ¥24,345.0 million imply an equity ratio around 63.7% (despite the reported 0.0% placeholder). Financial leverage is modest at 1.57x assets/equity. Interest coverage of ~24.7x EBIT reflects low refinancing risk under current conditions. capital_structure: Debt-to-equity is 0.57x (interest-bearing debt details not separately disclosed). The mix suggests conservative leverage with capacity to fund maintenance capex and selective growth without stressing the balance sheet.

Cash Flow Quality

earnings_quality: OCF of ¥1,297.4 million is 3.77x net income, supported by ¥685.9 million of depreciation and likely positive working capital movements. OCF/EBITDA ≈ 1.02 indicates strong cash conversion and limited accrual build. FCF_analysis: Investing cash flow is unreported (shown as zero), so true free cash flow cannot be determined. Using OCF alone as a proxy (not a substitute), the company appears capable of funding typical maintenance capex (often proxied by depreciation in warehousing) from internal cash generation; however, this cannot be confirmed here. working_capital: Current assets exceed current liabilities by ¥4.66 billion. The OCF strength suggests either stable receivables/collections or a release of working capital, but detailed AR/AP/inventory movements are unreported.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are unreported (shown as zeros). With net income of ¥344 million and robust OCF, internal capacity to sustain a dividend appears plausible in principle, but we cannot assess payout levels without disclosed policy or DPS. FCF_coverage: FCF coverage cannot be computed because capex/investing cash flows are unreported. OCF of ¥1.30 billion would typically provide ample coverage for modest dividends, but this is contingent on actual capex needs. policy_outlook: No guidance or policy details are provided in the dataset. Historically, logistics RE/warehouse operators often target stable dividends, but company-specific policy for this period is not disclosed.

Risk Assessment

Business Risks:

• Demand cyclicality in manufacturing, import/export, and e-commerce volumes impacting warehouse utilization
• Customer concentration and contract renewal risk affecting pricing and occupancy
• Energy and utilities cost inflation affecting facility operating expenses
• Labor shortages and wage inflation in logistics operations
• Real estate-related risks (property taxes, maintenance costs, regulatory changes)
• Natural disaster and supply chain disruption risk (earthquakes, port congestion) in Japan
• Competitive pricing pressure from peers and 3PLs

Financial Risks:

• Interest rate increases elevating financing costs (though current coverage is strong)
• Potential capex needs for capacity expansion or automation not visible in reported investing CF
• Asset impairment risk if utilization weakens or market rents decline
• Tax rate volatility given the high effective rate inferred this period
• Liquidity concentration if cash balances are lower than implied (cash position is unreported)

Key Concerns:

• Limited disclosure of revenue and gross profit impedes margin and turnover analysis
• Unreported investing cash flows obscure true free cash flow and capex intensity
• Net income decline despite higher operating income suggests pressure from non-operating items and taxes

Investment Implications

Key Takeaways:

• Operating income grew 8.8% YoY to ¥590 million, signaling improving core operations
• Net income declined 2.4% YoY to ¥344 million due to below-the-line items and a high effective tax rate (~39%)
• Strong cash generation: OCF ¥1,297 million, OCF/NI 3.77x, OCF/EBITDA ~1.02
• Solid balance sheet: assets ¥38.214 billion, equity ¥24.345 billion, implied equity ratio ~63.7%, leverage 1.57x
• Interest coverage is robust at ~24.7x EBIT; debt-to-equity 0.57x indicates moderate leverage
• ROE is modest at ~1.4% for the half-year (~2.8% annualized), constrained by net margin rather than leverage
• Key data gaps (revenue, gross margin, investing CF) limit full assessment of growth and FCF

Metrics to Watch:

• Disclosure of revenue and gross profit to assess margins and operating leverage
• Effective tax rate and drivers of the gap between operating and net income
• Investing cash flows and capex levels to determine true free cash flow
• Utilization/occupancy rates and rent revisions across warehouse portfolio
• Net debt and interest-bearing liabilities to refine leverage metrics (e.g., net debt/EBITDA)
• Working capital turns and OCF conversion sustainability

Relative Positioning: Within Japan’s warehousing/logistics cohort, the company exhibits conservative leverage, strong cash conversion, and improving operating profit, but currently shows modest ROE and limited disclosed top-line visibility compared with peers that provide fuller revenue and capex transparency.

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