EURASIA TRAVEL Co.,Ltd. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥2.27B
• Operating Income: ¥115M
• Net Income: ¥123M
• EPS: ¥30.87

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

Eurasia Travel Co., Ltd. (consolidated, JGAAP) delivered modest top-line growth in FY2025 Q4, with revenue up 0.9% year over year to ¥2,270,000,000. Operating income increased 7.7% YoY to ¥115,000,000, indicating positive operating leverage as costs were held in check relative to sales. Ordinary income of ¥123,000,000 exceeded operating income, suggesting net non-operating gains supported earnings. Despite this, net income declined 5.5% YoY to ¥113,000,000, implying either tougher comps, a change in non-recurring items, or slight pressure below the ordinary line. Operating margin was approximately 5.1%, and net margin stood at 4.98%, reflecting a lean, asset-light model typical of travel agencies. DuPont decomposition shows ROE at 6.13%, built on a 4.98% net margin, 0.705x asset turnover, and 1.75x financial leverage. EBITDA was ¥120,074,000 with a 5.3% margin, and depreciation was low at ¥5,074,000, underscoring a light fixed-asset base. Cash generation was solid: operating cash flow of ¥149,000,000 exceeded net income (OCF/NI 1.32x), with free cash flow at ¥131,000,000 after ¥18,000,000 of investing outflows. The balance sheet appears sound, with total assets of ¥3,219,000,000 and total equity of ¥1,844,000,000; this implies an equity ratio of roughly 57.3% (the reported 0.0% equity ratio reflects non-disclosure rather than an actual zero). Liquidity is robust: current assets of ¥2,452,967,000 against current liabilities of ¥1,052,645,000 translate into a current ratio of 233%, supported by sizable working capital of ¥1,400,322,000. The debt-to-equity ratio is indicated at 0.64x, consistent with moderate leverage and a liabilities mix likely dominated by operating liabilities (e.g., customer advances). Interest expense was not disclosed (reported as zero), and the interest coverage metric is therefore not meaningful. The company paid no dividend for the period (DPS ¥0, payout ratio 0%), conserving cash as the sector recovery remains gradual. With EPS at ¥30.87, earnings per share are recovering, but share count disclosure is absent, limiting per-share balance sheet analysis. Overall, the company shows steady recovery dynamics, improving operating leverage, good cash conversion, and a conservative balance sheet, albeit with lingering sensitivity to demand volatility and external shocks affecting travel. Data limitations include non-disclosure of gross profit, cash balance, interest expense, share count, and the equity ratio (calculated here from the balance sheet). The quality of earnings appears reasonable given OCF > NI and limited reliance on non-core income. Execution on cost control and product mix will be key to sustaining margins in a low-growth revenue environment. The near-term outlook hinges on travel demand normalization, geopolitical stability, and foreign exchange trends affecting outbound tour affordability.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 4.98%
• asset_turnover: 0.705
• financial_leverage: 1.75
• calculated_ROE: 6.13%
• commentary: ROE of 6.13% is driven more by asset turnover than leverage, with modest margins reflecting the agency model. Leverage is moderate and not the primary ROE driver. margin_quality: Operating margin ~5.1% (¥115m / ¥2,270m) and net margin 4.98% indicate disciplined SG&A control. EBITDA margin of 5.3% and very low D&A (¥5.1m) suggest limited fixed-cost drag and minimal non-cash inflation of profits. Negative income tax (effective tax rate displayed as 0.0%) hints at credits/loss carryforwards; underlying normalized tax rate may be higher than the period’s reported figure. operating_leverage: Revenue grew 0.9% YoY while operating income rose 7.7% YoY, evidencing positive operating leverage from cost containment and potentially improved tour yields/occupancy. Further margin expansion depends on mix optimization and fixed-cost absorption as volumes recover.

Growth Assessment

revenue_sustainability: Top-line growth of 0.9% YoY is modest, consistent with a maturing recovery in outbound/inbound travel amid uneven macro and geopolitical conditions. Sustainability depends on booking trends, capacity (air/seats), and FX-driven affordability. profit_quality: Ordinary income exceeding operating income by ¥8m suggests supportive non-operating items; however, core profitability improved as operating income outpaced revenue growth. OCF/NI of 1.32x corroborates earnings cash realizability. outlook: Near-term growth likely hinges on continued normalization of international travel, itinerary diversification, and pricing discipline. External factors (geopolitics, fuel surcharges, FX) remain key swing factors for volume and mix.

Financial Health

liquidity: Current ratio 233% and quick ratio 233% (no inventories disclosed) indicate strong short-term coverage. Working capital of ¥1,400,322,000 provides a sizable buffer against demand volatility and booking seasonality. solvency: Computed equity ratio ~57.3% (¥1,844m equity / ¥3,219m assets), versus the disclosed 0.0% which reflects non-disclosure. Debt-to-equity of 0.64x indicates moderate leverage; interest expense was not disclosed, but liabilities likely include substantial operating items such as customer advances. capital_structure: Assets to equity at 1.75x aligns with a conservative balance sheet for an asset-light business. With low D&A and minimal indicated financial expenses, balance sheet risk appears manageable.

Cash Flow Quality

earnings_quality: OCF ¥149m compared to NI ¥113m (OCF/NI 1.32x) signals solid cash conversion, aided by working capital inflows typical of travel bookings timing. FCF_analysis: Free cash flow of ¥131m (OCF ¥149m minus investing CF of ¥18m) was positive, supporting internal funding of operations and optionality for investment or shareholder returns. working_capital: Current assets ¥2,452,967,000 vs current liabilities ¥1,052,645,000 suggests net inflows from booking advances. Monitoring deferred revenue/advance receipts and cancellation trends is key to understanding OCF volatility.

Dividend Sustainability

payout_ratio_assessment: No dividend declared (DPS ¥0; payout ratio 0%). With EPS at ¥30.87 and positive FCF, capacity exists, but policy appears conservative or in rebuild mode. FCF_coverage: FCF coverage is not applicable given zero payout. The company retained all FCF (¥131m), strengthening liquidity. policy_outlook: Future distributions will likely track visibility on sustained profitability and sector normalization. Given travel cyclicality, a cautious payout stance is reasonable until earnings stability is demonstrated.

Risk Assessment

Business Risks:

• Macroeconomic and consumer sentiment sensitivity impacting discretionary travel demand
• Geopolitical risks and regional conflicts affecting tour itineraries and bookings
• Foreign exchange volatility influencing outbound travel affordability and pricing
• Airline capacity, fuel surcharges, and supplier pricing impacting tour margins
• High seasonality and potential for elevated cancellations/refunds
• Competition from larger integrated agencies and online platforms
• Concentration in specific regions/itineraries (if applicable), exposing route/geography risk

Financial Risks:

• Working capital volatility tied to customer advances and timing of departures
• Limited disclosure of interest expense and cash balances complicates coverage/liquidity analysis
• Moderate leverage (D/E 0.64x) could amplify downturn impacts despite a solid equity base
• Low non-cash charges limit buffer for earnings during downturns

Key Concerns:

• Sustainability of margin gains with only modest revenue growth
• Exposure to exogenous shocks (pandemics, geopolitical events) that can abruptly halt travel
• Dependence on non-operating gains to lift ordinary income above operating income

Investment Implications

Key Takeaways:

• Steady recovery with revenue +0.9% YoY and operating income +7.7% YoY indicates positive operating leverage
• ROE of 6.13% driven by reasonable asset turnover and moderate leverage; room for improvement via margin expansion
• Strong liquidity (current ratio 233%) and a computed equity ratio ~57% underpin resilience
• Cash generation solid (OCF/NI 1.32x; FCF ¥131m), supporting self-funded operations
• No dividend, implying conservative capital allocation pending clearer recovery visibility

Metrics to Watch:

• Bookings growth, cancellation rates, and tour load factors
• SG&A ratio and operating margin trajectory
• Non-operating income components driving ordinary income
• OCF/NI and working capital movements (advance receipts vs. settlements)
• FX trends (JPY) and fuel surcharge dynamics affecting pricing and demand
• Equity ratio and D/E evolution as the cycle matures
• Management commentary on dividend policy resumption

Relative Positioning: Asset-light niche tour operator with improving profitability and conservative balance sheet, but smaller scale relative to major peers leaves greater exposure to demand shocks and competitive pricing pressure.

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
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