Japan Airport Terminal Co.,ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥141.54B
• Operating Income: ¥21.45B
• Net Income: ¥16.35B
• EPS: ¥144.41

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

Japan Airport Terminal Co., Ltd. (9706) reported FY2026 Q2 consolidated results under JGAAP with revenue of ¥141.5bn (+7.4% YoY) and operating income of ¥21.4bn (+1.7% YoY). Net income increased 11.8% to ¥13.4bn, lifting the net margin to 9.47%. DuPont decomposition indicates ROE of 6.35%, driven by a 9.47% net margin, 0.297x asset turnover, and 2.26x financial leverage. Operating margin was approximately 15.1%, implying margin contraction versus the prior year given revenue growth outpaced operating income growth. Ordinary income of ¥20.4bn reflects manageable financial costs with interest expense of ¥1.54bn and robust interest coverage of 13.9x. The balance sheet shows total assets of ¥476.9bn and total equity of ¥211.2bn; although the disclosed equity ratio is 0.0% (undisclosed), a computed equity ratio is roughly 44.3%. Liquidity appears strong with a current ratio of 189.6% and a quick ratio of 173.5%; working capital stands at ¥61.9bn. Cash flow metrics (OCF, FCF, D&A, cash) are undisclosed in this filing, so cash flow quality cannot be directly assessed; the shown zeros should be treated as unreported. Gross profit and EBITDA are also undisclosed; however, the operating result provides a reasonable view of core profitability. The effective tax rate metric is shown as 0.0% (undisclosed), but based on income tax expense of ¥3.48bn and net income of ¥13.40bn, an implied effective tax rate is approximately 20–21%. Dividend data (DPS, payout, FCF coverage) and share data (shares outstanding, treasury shares, BVPS) are not disclosed in this dataset. Overall, fundamentals suggest solid profitability and moderate leverage for an asset-heavy airport operator with recovering traffic-sensitive revenues, but the limited cash flow disclosure constrains assessment of earnings quality and dividend capacity. Key monitoring points include traffic recovery, duty-free/retail momentum, cost discipline, interest costs, and capital expenditure trajectory. Data limitations necessitate caution in interpreting cash flow and dividend-related metrics.

Profitability Analysis

ROE of 6.35% decomposes into net margin 9.47% × asset turnover 0.297 × leverage 2.26. Operating margin is approximately 15.1% (¥21.446bn / ¥141.544bn). Given revenue grew 7.4% while operating income grew 1.7%, operating margin likely compressed by roughly 80 bps YoY, indicating some adverse mix, cost inflation, or normalization of high-margin categories (e.g., duty-free) versus services. Ordinary income of ¥20.369bn vs. operating income of ¥21.446bn suggests a modest non-operating drag, largely interest expense of ¥1.544bn, partially offset by other non-operating income. Net margin at 9.47% improved YoY in absolute profit terms, implying tailwinds from lower non-operating losses or a favorable effective tax rate despite operating margin compression. Interest coverage is strong at 13.9x (operating income / interest expense), indicating ample buffer against rate increases. Gross profit and EBITDA are undisclosed; however, operating profit provides visibility into core profitability, with the business demonstrating healthy mid-teens operating margins for an infrastructure/retail hybrid model. Operating leverage appears positive but moderating; revenue expansion is not translating one-for-one into operating profit growth, suggesting incremental costs (labor, utilities, rent/concession fees) or increased promotional intensity in retail operations.

Growth Assessment

Top-line growth of +7.4% YoY (to ¥141.5bn) indicates sustained recovery in passenger traffic and commercial sales. Operating income grew +1.7% YoY to ¥21.4bn, lagging revenue growth and pointing to margin normalization or cost headwinds. Net income growth of +11.8% to ¥13.4bn outpaced operating profit growth, likely reflecting improved non-operating items and/or tax effects (implied effective tax rate ~20–21% versus the undisclosed reported metric). Asset turnover of 0.297x highlights the capital-intensive nature of airport terminal operations; growth will likely depend on continued volume recovery, spend-per-passenger in retail/duty-free, and tenant performance. The sustainability of revenue growth hinges on sustained inbound tourism, international flight recovery, and stable concession dynamics; the quarter’s growth is consistent with ongoing normalization. Profit quality is reasonable at the operating level, but the lag versus revenue suggests near-term pressure from cost inflation or mix. Outlook considerations include seasonality into 2H, elasticity of duty-free sales to FX and traveler mix, and the trajectory of airport-related service revenues. Absent cash flow data and D&A disclosure, assessing the durability of earnings and reinvestment needs is constrained.

Financial Health

Total assets: ¥476.9bn; total liabilities: ¥271.6bn; total equity: ¥211.2bn. Computed equity ratio ~44.3% (equity/assets), though the disclosed equity ratio of 0.0% indicates non-disclosure in this dataset. Debt-to-equity (using total liabilities as proxy) is 1.29x, indicating moderate leverage for an infrastructure-heavy business. Liquidity is strong: current ratio 1.90x (¥130.9bn / ¥69.1bn) and quick ratio 1.74x (ex-inventory). Working capital is ¥61.9bn, providing operational flexibility. Interest burden is manageable with interest expense of ¥1.54bn versus operating income of ¥21.45bn. Solvency appears sound given equity base and coverage, though actual debt composition, maturity ladder, and cash balance are undisclosed here. The lack of reported cash and cash equivalents and cash flow statements limits assessment of short-term funding resiliency and refinancing risk.

Cash Flow Quality

Operating, investing, and financing cash flows are undisclosed in this dataset (shown as 0, which indicates unreported). As a result, OCF/Net Income, free cash flow, and conversion metrics cannot be reliably assessed. The reported OCF/NI ratio of 0.00 and FCF of 0 should be treated as unavailable rather than indicative of weak cash generation. Without D&A, it is not possible to distinguish cash vs. non-cash components of earnings. Working capital appears positive (¥61.9bn), and inventories are modest relative to current assets (¥11.1bn), which may help stabilize cash conversion in retail operations, but the net working capital delta and its impact on OCF are unknown. Capex intensity is a key unknown; airport terminal operations typically require ongoing maintenance and expansion capex, but the period’s investing outflows are not disclosed.

Dividend Sustainability

Dividend metrics (annual DPS, payout ratio, FCF coverage) are undisclosed in this dataset and should not be interpreted as zeros. EPS is ¥144.41 for the period; however, without DPS and FCF, payout assessment and coverage analysis cannot be performed. Sustainable dividends for this business model generally depend on stable OCF after maintenance capex and visibility on traffic-driven earnings; given the healthy operating profitability and moderate leverage, dividend capacity could be supported, but the absence of cash flow and policy disclosure prevents a definitive view. Policy outlook cannot be inferred without management guidance or historical payout patterns.

Risk Assessment

Business Risks:

• Passenger traffic volatility due to macro conditions, pandemics, and geopolitical events
• Exposure to duty-free/retail performance and spend-per-passenger trends
• Foreign exchange impacts on duty-free pricing and inbound tourism demand
• Regulatory and concession framework changes affecting fees and rentals
• Cost inflation (labor, utilities, facility maintenance) pressuring margins
• Capital expenditure requirements for terminal maintenance and expansion
• Competition and tenant performance within commercial areas
• Seasonality and route mix (international vs. domestic, LCC vs. legacy carriers)

Financial Risks:

• Interest rate and refinancing risk given moderate leverage (liabilities/equity ~1.29x)
• Potential increase in interest expense from rate normalization
• Uncertain cash flow generation and capex profile due to undisclosed OCF/FCF
• Working capital swings tied to retail and service operations
• Limited visibility on cash balances and liquidity buffers (cash not disclosed)

Key Concerns:

• Operating margin compression despite revenue growth (+7.4% vs. +1.7% operating income)
• Lack of cash flow disclosure (OCF, capex, FCF) constraining earnings quality assessment
• Undisclosed DPS and payout policy limiting dividend visibility

Investment Implications

Key Takeaways:

• Revenue ¥141.5bn (+7.4% YoY) with operating income ¥21.4bn (+1.7% YoY), indicating margin pressure
• Net income ¥13.4bn (+11.8% YoY); net margin 9.47%
• ROE 6.35% via DuPont (margin 9.47% × turnover 0.297 × leverage 2.26)
• Interest coverage strong at 13.9x; interest expense ¥1.54bn
• Liquidity solid: current ratio 1.90x, quick ratio 1.74x; working capital ¥61.9bn
• Computed equity ratio ~44.3% despite disclosed 0.0% (undisclosed)
• Cash flow, D&A, gross profit, EBITDA, DPS not disclosed; limits quality and payout analysis

Metrics to Watch:

• Passenger traffic volumes and international mix
• Duty-free/retail sales per passenger and concession margins
• Operating margin trajectory and cost inflation (labor, utilities, fees)
• Interest expense and coverage amid rate changes
• Capex and resulting FCF (OCF – capex) once disclosed
• Working capital movements (inventory and receivables turnover)
• Effective tax rate normalization
• Dividend policy updates and DPS guidance

Relative Positioning: Within Japan-listed airport and transportation infrastructure peers, the company exhibits solid mid-teens operating margins, moderate balance sheet leverage, and strong liquidity, but relative visibility on cash generation and shareholder returns is currently limited due to undisclosed cash flow and dividend 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
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