Isewan Kaiun Co., Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥28.78B
• Operating Income: ¥1.84B
• Net Income: ¥1.45B
• EPS: ¥48.31

Income Statement

Balance Sheet

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

Isewan Terminal Service Co., Ltd. (TSE:9359) delivered solid FY2026 Q2 consolidated results under JGAAP, with revenue of ¥28.78bn (+6.5% YoY) and operating income of ¥1.841bn (+36.9% YoY), indicating notable operating leverage and margin expansion. Operating margin rose to approximately 6.4%, helped by disciplined cost control and likely favorable mix in higher-margin logistics services. Ordinary income reached ¥1.967bn, and net income was ¥1.177bn (-7.6% YoY), suggesting higher non-operating burdens and/or tax impacts versus the prior year despite stronger operations. Gross profit of ¥6.242bn implies a gross margin of 21.7%; we rely on the disclosed gross profit for margin analysis given presentation differences in cost classifications. Interest expense remained minimal at ¥10.5m, yielding a very strong interest coverage of 174.8x, underscoring low financial risk. The DuPont decomposition indicates a net margin of 4.09%, asset turnover of 0.472x, and financial leverage of 1.27x, producing an ROE of 2.45% for the period; on a simple annualization this suggests ~4.9%, though seasonality may affect comparability. The balance sheet is conservative: total assets ¥60.95bn, liabilities ¥12.38bn, and equity ¥48.11bn; this implies an equity ratio near 78.9%, notwithstanding the reported 0.0% placeholder. Liquidity appears robust with a current ratio of 375% and working capital of ¥21.57bn, reflecting a strong short-term cushion. Cash flow statements were not disclosed in XBRL for the period (zeros denote unreported), so operating and free cash flow quality cannot be assessed from the provided data. Depreciation and EBITDA were also undisclosed; hence EBITDA-based metrics are not meaningful here. The decline in net income despite strong operating profit growth points to non-operating and tax items; the disclosed income tax of ¥592.5m implies an effective tax rate around 30% using ordinary income as proxy for pre-tax income. Dividend per share is undisclosed (DPS shown as 0.00), and payout metrics are therefore not evaluable for this period. Capital structure remains light on debt, with a debt-to-equity proxy of ~0.26x (total liabilities/equity). Overall, the company shows improving core profitability, very strong solvency and liquidity, and low interest burden, offset by limited visibility on cash flow and dividends in this disclosure set. Key uncertainties include the durability of the margin expansion and the drivers of the YoY net income decline. Given the logistics exposure, macro trade volumes, automotive exports, and port activity will remain critical demand drivers. We acknowledge data limitations where certain items are unreported; analysis focuses on the available non-zero figures.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 4.09% (Net Income ¥1.177bn / Revenue ¥28.78bn)
• asset_turnover: 0.472x (Revenue ¥28.78bn / Assets ¥60.95bn; period-based, not TTM)
• financial_leverage: 1.27x (Assets/Equity; conservative balance sheet)
• calculated_ROE: 2.45% for the period (simple annualization ~4.9%, subject to seasonality) margin_quality: Gross margin 21.7% (based on disclosed gross profit). Operating margin ~6.4% (¥1.841bn/¥28.78bn) improved meaningfully YoY as operating income grew +36.9% vs revenue +6.5%. Ordinary margin ~6.8% (¥1.967bn/¥28.78bn). Net margin 4.09% compressed YoY despite stronger operations, indicating headwinds in non-operating items and/or taxes. operating_leverage: Strong: +6.5% revenue translated to +36.9% operating income, implying favorable fixed-cost absorption and/or mix shift toward higher-value services. Sustainability will depend on volume stability, pricing power, and cost discipline.

Growth Assessment

revenue_sustainability: Revenue growth of +6.5% YoY likely reflects resilient port/logistics demand and possibly robust auto/export flows. Sustainability hinges on external trade, container throughput, and customer activity levels in Chubu region industrial supply chains. profit_quality: Core operating profit expanded significantly, pointing to genuine efficiency/mix gains. However, the net income decline (-7.6% YoY) suggests less favorable non-operating/tax effects; effective tax implied ~30% (based on ordinary income), and interest costs are negligible. outlook: If current demand and pricing hold, operating momentum could persist. Watch for normalization of non-operating items and tax rate stability to translate operating gains into bottom-line growth. Macro sensitivity (exports, FX-driven competitiveness) remains a key determinant.

Financial Health

liquidity: Current assets ¥29.40bn vs current liabilities ¥7.84bn; current ratio 375%, working capital ¥21.57bn. Quick ratio equals current ratio here due to undisclosed inventories; interpret with caution. solvency: Total liabilities ¥12.38bn vs equity ¥48.11bn. Implied equity ratio ~78.9% (based on period-end balances), indicating a very conservative capital structure. capital_structure: Debt-to-equity proxy ~0.26x (total liabilities/equity). Interest expense only ¥10.5m with coverage 174.8x, highlighting low financial risk and ample capacity for investment if needed.

Cash Flow Quality

earnings_quality: Cannot be fully assessed; operating cash flow was not disclosed in XBRL (shown as 0). Net income quality relative to cash conversion is therefore indeterminable for this period. FCF_analysis: Free cash flow not derivable due to undisclosed OCF and capex/depreciation. EBITDA also undisclosed; FCF coverage of dividends cannot be evaluated. working_capital: Working capital is strong at ¥21.57bn; without cash flow detail, we cannot judge intra-period working capital swings or cash conversion cycle dynamics.

Dividend Sustainability

payout_ratio_assessment: DPS and payout ratio are shown as 0.00 due to non-disclosure; no conclusion can be drawn about payouts for FY2026. EPS is ¥48.31 for the half-year, but without dividend data we cannot compute payout ratios. FCF_coverage: Not assessable; operating and investing cash flows were not disclosed. policy_outlook: Given the conservative balance sheet and low interest burden, the company appears to have capacity for stable distributions in principle; however, absent disclosed dividend and cash flow data, policy direction for FY2026 remains unclear.

Risk Assessment

Business Risks:

• Exposure to trade volumes, port throughput, and global supply chain cycles
• Customer concentration in automotives/heavy industry typical of regional port logistics
• Price competition in stevedoring, warehousing, and logistics services
• Operational disruptions from weather, natural disasters, or port congestion
• Labor availability and wage inflation in logistics operations
• Fuel and utility cost fluctuations impacting handling/transport costs
• Regulatory and safety compliance in port operations

Financial Risks:

• Potential capex requirements for equipment, warehouses, and digitalization
• Cash flow timing risks from working capital in cyclical environments
• Asset impairment risk if volumes weaken materially
• Limited interest rate risk currently, but future funding costs could rise

Key Concerns:

• Net income declined (-7.6% YoY) despite stronger operating profit, pointing to non-operating/tax headwinds
• Lack of disclosed cash flow and depreciation data limits assessment of earnings quality and reinvestment needs
• Sustainability of margin expansion in a cyclical, competitive logistics market

Investment Implications

Key Takeaways:

• Revenue grew 6.5% YoY to ¥28.78bn with strong operating leverage (+36.9% operating profit)
• Operating margin improved to ~6.4%; ordinary margin ~6.8%; net margin 4.09%
• ROE for the period 2.45% with low leverage (financial leverage 1.27x)
• Very strong balance sheet: implied equity ratio ~78.9%, D/E proxy ~0.26x
• Interest coverage 174.8x reflects minimal financial risk
• Net income declined YoY due to non-operating/tax factors despite operational strength
• Cash flow and dividend data not disclosed, limiting FCF and payout analysis

Metrics to Watch:

• Volume indicators (container throughput, auto/export cargo) and pricing/mix
• Operating margin trajectory and cost efficiency
• Ordinary vs net income bridge (non-operating items, tax rate ~30%)
• Disclosure of OCF, capex, and depreciation to assess FCF and reinvestment
• Capex plans for port equipment/warehouses and their ROI
• Customer concentration and contract renewals

Relative Positioning: Within Japanese port/logistics operators, the company exhibits above-average balance sheet strength and very low interest burden, with mid-single-digit operating margins improving YoY; near-term visibility on cash generation and dividends is weaker due to undisclosed CF data.

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