SANRITSU CORPORATION FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥9.95B
• Operating Income: ¥408M
• Net Income: ¥201M
• EPS: ¥41.05

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

Sanritsu (9366) reported FY2026 Q2 (cumulative) consolidated results under JGAAP with steady top-line growth and mixed profitability dynamics. Revenue rose 3.7% year over year to ¥9.953bn, indicating resilient demand across its logistics-related services. Gross profit reached ¥2.087bn, translating to a gross margin of 21.0%, which is solid for the sector and suggests stable pricing and service mix. Operating income declined 7.1% YoY to ¥408m, bringing the operating margin to 4.1%, implying that SG&A and/or labor and fuel-related costs likely grew faster than gross profit. Ordinary income was ¥356m, below operating income, reflecting net non-operating costs, including ¥35.5m of interest expense. Net income increased 15.8% YoY to ¥230m, and EPS was ¥41.05, indicating support from below-operating-line factors and/or improved tax outcomes versus the prior year. The DuPont profile shows a net margin of 2.31%, asset turnover of 0.418x, and financial leverage of 2.08x, yielding an ROE of 2.01% on a year-to-date basis; annualized, ROE would still be modest, underscoring a margin-driven, low-turnover business profile. The balance sheet remains sound: total assets were ¥23.794bn and equity ¥11.446bn, implying an equity ratio of roughly 48.1% (despite the reported 0.0% figure being an unreported placeholder) and total liabilities of ¥12.877bn. Liquidity appears adequate with a current ratio of 126.8% and working capital of about ¥1.80bn. Interest coverage is comfortable at roughly 11.5x, supported by recurring operating profit. Implied effective tax rate is approximately 33–34% based on reported taxes and net income (the displayed 0.0% effective tax rate reflects unreported metadata, not the actual tax burden). Operating leverage seems adverse in this period, as growth in operating costs outpaced revenue expansion, pressuring operating income despite stable gross margins. Ordinary income trending below operating income suggests some headwinds from financing or other non-operating items, albeit manageable given the coverage ratio. Cash flow statements are unreported in this dataset, constraining assessment of earnings-to-cash conversion and free cash flow. Dividend figures are also unreported, limiting visibility on shareholder return policy within this period’s disclosure. Overall, Sanritsu delivers steady revenue growth and maintains a conservative balance sheet, but faces cost pressure that tempers operating profit and weighs on interim ROE.

Profitability Analysis

ROE decomposition (DuPont): Net profit margin 2.31% × asset turnover 0.418 × financial leverage 2.08 = c. 2.01% ROE for the cumulative first half. Operating margin stands at 4.1% (¥408m/¥9,953m), down YoY despite revenue growth, pointing to negative operating leverage in H1. Gross margin is 21.0%, indicating that primary service-level unit economics are reasonably stable; the compression is at the SG&A/overhead layer. Ordinary income below operating income (¥356m vs. ¥408m) highlights net non-operating costs (interest expense ¥35.5m and other items). Interest coverage is strong at ~11.5x, suggesting financing costs are not a material profitability drag. The implied effective tax rate is ~33–34% (¥116.5m taxes vs. ~¥346–347m pre-tax), consistent with Japan’s statutory range. EBITDA and D&A are unreported; however, in asset-intensive logistics, depreciation is typically meaningful—this means EBITDA margin is likely higher than operating margin, but we cannot quantify it here. Overall margin quality is adequate at the gross level, with cost inflation and overhead pressure compressing operating profitability. Given asset turnover of 0.418x on a half-year basis, the model remains margin-dependent rather than asset-turnover driven for ROE generation.

Growth Assessment

Revenue growth of 3.7% YoY to ¥9.953bn suggests sustained client demand and stable volume/pricing conditions. The decline in operating income (-7.1% YoY) despite higher sales points to cost growth exceeding revenue gains, likely from labor, fuel, and subcontracting costs common to logistics. Net income growth (+15.8% YoY to ¥230m) implies favorable below-operating-line items and/or year-ago tax comparatives; the implied current tax burden is normal, so prior-period effects may have been less favorable. Gross margin of 21.0% indicates the core service mix and pricing remain resilient; however, SG&A intensity appears elevated, curbing operating profit growth. With asset turnover at 0.418x (interim), scaling effects are modest; improving operating efficiency will be key to translating revenue growth into higher profits. Outlook-wise, if cost normalization occurs in H2 or price adjustments flow through, operating margins could stabilize; lacking cash flow detail, we assume earnings quality is contingent on working-capital discipline and capex moderation. Overall revenue momentum appears sustainable near-term, but profit growth hinges on cost pass-through and efficiency initiatives.

Financial Health

Total assets are ¥23.794bn, liabilities ¥12.877bn, and equity ¥11.446bn, implying an equity ratio of ~48.1% (reported 0.0% is an unreported placeholder). The debt-to-equity ratio of 1.13x here refers to total liabilities/equity; the level of interest-bearing debt is not disclosed, but interest expense of ¥35.5m and 11.5x interest coverage suggest manageable leverage. Liquidity is solid with current assets of ¥8.516bn and current liabilities of ¥6.713bn, giving a current ratio of 126.8% and working capital of ¥1.80bn; the quick ratio equals the current ratio due to inventories being unreported. Cash and equivalents are unreported, so we cannot assess the cash ratio or immediate liquidity buffer. Capital structure appears conservative, with substantial equity supporting operations and investment needs. No material solvency concerns are evident from the available data.

Cash Flow Quality

Operating, investing, and financing cash flows are unreported in this dataset, so we cannot directly assess earnings-to-cash conversion or free cash flow. The displayed OCF/Net Income ratio of 0.00 and FCF of 0 should be treated as placeholders rather than actual results. Given the industry’s working-capital intensity (receivables and payables cycles), cash conversion can vary intra-year; without data, we assume typical seasonality in H1. Depreciation is unreported, obscuring the non-cash portion of operating profit; in logistics, D&A is typically meaningful, which would support cash earnings versus accounting earnings. Working capital at period-end was positive (~¥1.80bn), which is consistent with adequate short-term liquidity, but period-to-period changes are unknown. Overall, earnings quality cannot be conclusively judged absent OCF and capex details; monitoring subsequent disclosures will be important.

Dividend Sustainability

Dividend per share and payout ratio are unreported here (displayed as 0.00). EPS for the period is ¥41.05, but without dividend data and cash flow information, we cannot assess payout safety or FCF coverage. Balance sheet strength (equity ratio ~48%) supports capacity for stable dividends in principle, subject to actual cash generation and capex plans. Policy outlook cannot be inferred from this dataset; future filings and the company’s dividend policy statement should be reviewed when available.

Risk Assessment

Business Risks:

• Cost inflation in labor, fuel, and subcontracting compressing operating margins
• Pricing/pass-through delays in customer contracts reducing near-term profitability
• Volume volatility from macro conditions impacting shipment volumes and warehouse utilization
• Customer concentration risk typical in B2B logistics (not disclosed here but relevant to the sector)
• Operational disruptions (accidents, weather, supply chain bottlenecks) affecting service levels

Financial Risks:

• Potential increase in interest rates raising financing costs (interest expense currently ¥35.5m)
• Working capital swings affecting operating cash flow (cash flows unreported)
• Capex requirements for fleet/warehouse assets elevating leverage or reducing FCF (D&A unreported)
• Exposure to fuel price volatility if hedging/pass-through mechanisms are limited

Key Concerns:

• Operating income decline (-7.1% YoY) despite revenue growth, indicating cost pressures
• Limited visibility on cash flow and capex due to unreported CF statements and depreciation
• Modest interim ROE (2.01%), reliant on margin improvement to enhance returns

Investment Implications

Key Takeaways:

• Top-line growth of 3.7% YoY demonstrates resilient demand
• Gross margin at 21.0% is stable, but SG&A pressure reduced operating margin to 4.1%
• Net income increased 15.8% YoY, aided by below-OP items and normalized taxes
• Balance sheet is conservative with an implied equity ratio of ~48.1%
• Interest coverage is healthy at ~11.5x; financing costs are manageable
• Interim ROE of 2.01% is modest; improving operating efficiency is key

Metrics to Watch:

• Operating margin trajectory and SG&A ratio in H2
• Ordinary income versus operating income to gauge non-operating impacts
• Working capital movements and OCF once reported
• Capex and depreciation trends to assess asset intensity and FCF
• Revenue growth by service line and pricing/pass-through effectiveness
• Effective tax rate stability versus statutory norms

Relative Positioning: Within Japan’s mid-cap logistics cohort, Sanritsu exhibits steady revenue growth and a conservative balance sheet, but operates with modest interim ROE and faces near-term operating cost pressure relative to peers with stronger scale efficiencies.

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