FUSHIKI KAIRIKU UNSO CO.,LTD. FY2026 Q1 Earnings Report

Financial Highlights

• Net Sales: ¥3.54B
• Operating Income: ¥338M
• Net Income: ¥241M
• EPS: ¥100.34

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

FY2026 Q1 was solid on growth and ordinary profit, but showed mild operating margin compression and low capital efficiency. Revenue rose 11.2% YoY to 35.44, while operating income grew 8.2% YoY to 3.38. Gross profit reached 5.96, delivering a gross margin of 16.8%. SG&A was 2.84, implying an SG&A ratio of 8.0% of sales. Operating margin was 9.5%, down modestly from the prior year’s implied level, indicating slight negative operating leverage. Ordinary income climbed 18.5% to 4.02, supported by non-operating gains including dividend income (0.42) and other non-operating items, offset by non-operating expenses (0.20). The gap between ordinary income (4.02) and profit before tax (3.41) suggests an extraordinary loss of roughly 0.61 this quarter. Net income increased 19.0% YoY to 2.59, with an effective tax rate of 29.4%. DuPont-based ROE is 1.9%, driven by a 7.3% net margin, 0.151x asset turnover, and 1.77x leverage. ROIC is 1.7%, well below a typical 7–8% hurdle, underscoring capital efficiency challenges. Liquidity is adequate with a current ratio of 1.37 and quick ratio of 1.33, though slightly below the 1.5x comfort benchmark. Leverage is conservative with D/E at 0.77x and interest coverage at a robust 27.6x. Cash and deposits of 26.68 provide ample coverage versus short-term loans of 1.39, and net loans after cash appear limited. Earnings quality cannot be verified due to missing cash flow data; OCF/NI and FCF are unreported. Dividend capacity appears reasonable given low net debt, but with a calculated payout ratio of 60.6%, coverage vs. FCF remains unassessed. Looking ahead, sustaining growth while stabilizing margins and lifting ROIC through improved asset turnover and disciplined capex will be key.

Profitability Analysis

ROE decomposition: ROE (1.9%) = Net Profit Margin (7.3%) × Asset Turnover (0.151x) × Financial Leverage (1.77x). The most binding constraint on ROE is asset turnover at 0.151x, reflecting a capital-intensive asset base (total assets 234.75 vs quarterly sales 35.44). Operating margin was 9.5% this quarter (3.38/35.44), slightly compressing by roughly 25 bps YoY (prior-year implied margin ~9.8%), as operating income grew (+8.2%) slower than revenue (+11.2%). Non-operating contributions were meaningful: ordinary income exceeded operating income by 0.64, underpinned by dividend income (0.42) and other non-operating gains not itemized in the breakdown. Business drivers likely include steady logistics/cargo handling volumes with some mix or cost pressure (COGS 25.90), and modestly higher overheads (SG&A ratio ~8.0%). This composition shift—greater reliance on non-operating items—may not be fully repeatable, especially if dividends vary with market conditions. Sustainability assessment: core profitability remains positive but thin, and capital intensity continues to depress ROIC (1.7%). Concerning trend to monitor: operating leverage turned slightly negative (OP growth < sales growth), suggesting cost escalation (personnel, repairs, energy) or price/mix headwinds; ensure SG&A and COGS growth don’t outpace revenue in subsequent quarters.

Growth Assessment

Revenue growth of 11.2% YoY to 35.44 indicates healthy topline momentum, likely volume-led with possible pricing normalization. Operating income rose 8.2% YoY to 3.38, trailing sales growth, implying mild pressure on unit economics. Ordinary income strength (+18.5% YoY to 4.02) was aided by non-operating gains (dividend income 0.42 and other items), suggesting a portion of profit growth is non-recurring or volatile. Net income rose 19.0% to 2.59, partly cushioned by non-operating and despite an implied extraordinary loss (~0.61) between ordinary and pre-tax profit. Profit quality skews toward core operations but has a notable non-operating lift this quarter. With ROIC at 1.7%, incremental growth must be earned with disciplined capital use; otherwise, scaling could dilute returns. Near-term outlook hinges on sustaining cargo volumes and passing through cost inflation. Margin trajectory will depend on cost control (labor, maintenance, energy) and pricing. Expectation: mid-single digit operating profit growth is achievable if volume holds and cost pressure is contained, but ordinary profit may normalize if dividend/non-operating tailwinds fade.

Financial Health

Liquidity is adequate: current ratio 1.37 and quick ratio 1.33 (above 1.0 but below the 1.5 comfort threshold). No explicit warning triggers: Current Ratio is not <1.0 and D/E is 0.77x (<2.0). Maturity profile appears manageable: current assets 53.81 vs current liabilities 39.27, with cash + receivables (45.30) exceeding current liabilities (39.27). Short-term loans are modest at 1.39, and long-term loans are 30.64; cash holdings of 26.68 materially offset gross loan balances. Equity is strong at 132.90, implying an equity ratio of ~56.6% (total equity/total assets), indicating conservative solvency. No off-balance sheet obligations are disclosed in the provided data; absence of disclosure limits assessment of guarantees or lease commitments common in logistics.

Cash Flow Quality

Operating cash flow, investing cash flow, and free cash flow are unreported, preventing a direct OCF-to-NI assessment and FCF coverage analysis. Therefore, OCF/Net Income Ratio and FCF coverage cannot be evaluated and no quality flag is assigned based on this metric. Working capital appears sound at 14.54, and cash + receivables cover current liabilities; however, without OCF trends, potential working capital swings (receivables collection, inventory turns) cannot be assessed. No signs of working capital manipulation can be identified from the limited data, but this is a data limitation rather than a clean bill of health.

Dividend Sustainability

The calculated payout ratio is 60.6%, slightly above the <60% benchmark, suggesting a borderline but potentially sustainable level if cash generation is stable. DPS data and total dividends paid are unreported, and FCF is unavailable; thus, FCF coverage cannot be gauged. Balance sheet strength (equity ratio ~56.6%, low net loans after cash) offers a buffer to support dividends through cyclicality. Policy outlook: absent guidance, maintaining a stable dividend appears feasible, but sustainability hinges on converting earnings to cash and keeping capex disciplined given the low ROIC (1.7%).

Risk Assessment

Business Risks:

• Volume cyclicality in domestic logistics/port cargo handling affecting utilization and margins
• Cost inflation (labor, energy, maintenance) pressuring COGS and SG&A, with limited pricing power
• Operational disruptions from weather/natural disasters impacting port operations
• Customer concentration risk typical in regional logistics (not disclosed here)

Financial Risks:

• Low ROIC (1.7%) indicating capital efficiency risk and potential value dilution if capex is aggressive
• Moderate leverage (D/E 0.77x) but reliance on long-term loans; refinancing rate risk if interest rates rise
• Dividend reliance on non-operating income (dividends from securities) introduces volatility in ordinary profit
• Liquidity below ideal benchmark (current ratio 1.37 < 1.5), though still above 1.0

Key Concerns:

• Slight operating margin compression despite double-digit revenue growth suggests negative operating leverage
• Ordinary income uplift partly driven by non-operating items; sustainability uncertain
• Implied extraordinary loss (~0.61) narrowed PBT vs ordinary income
• Cash flow data absent; earnings quality and dividend/FCF alignment cannot be confirmed

Investment Implications

Key Takeaways:

• Topline growth was robust (+11.2% YoY) but operating margin compressed ~25 bps to ~9.5%
• Ordinary income strength (+18.5% YoY) benefited from non-operating contributions (notably dividend income 0.42)
• Capital efficiency remains weak (ROIC 1.7%), constraining structural ROE (1.9%)
• Balance sheet is conservative (equity ratio ~56.6%, interest coverage 27.6x) with manageable short-term obligations
• Dividend capacity appears supported by low net debt, but payout ratio (60.6%) is borderline without FCF data

Metrics to Watch:

• Operating cash flow and free cash flow once disclosed (OCF/NI > 1.0 target)
• Operating margin trajectory and SG&A/COGS growth vs revenue
• Asset turnover improvements (utilization rates) to lift ROIC above 5% minimum
• Non-operating income volatility (dividend income, other gains) and extraordinary items
• Net debt trend vs capex plans and interest rate exposure

Relative Positioning: Within regional logistics/port operators, the company shows healthy growth and conservative leverage, but trails on capital efficiency (low ROIC) and exhibits modest pressure on core operating margins; stability currently leans on non-operating income and a strong equity base.

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