MARUWN CORPORATION Q1 FY2026 earnings call

Company Overview & Core Strategy

• Marun is a 130+ year-old comprehensive logistics company listed on the Tokyo Stock Exchange Standard Market, with over 2,100 total employees, operating four core business segments centered on general cargo and energy logistics.
• The firm's core competitive strengths include its rare dual-focus freight/energy logistics model, 130+ years of industry expertise, a highly integrated global and domestic logistics network, ability to handle diverse cargo types from consumer goods to hazardous materials and heavy industrial equipment, low-carbon rail freight capabilities that address industry driver shortages, stable long-term relationships with major global groups including ENEOS and JX Metals, and specialized technical expertise for industrial machinery installation and plant relocation projects.
• This fiscal year is the final year of the 4th Medium-Term Management Plan, aligned with the long-term "2030 Marun Group Long-Term Vision" focused on sustained long-term corporate value growth.

Operational & Sustainability Highlights

• As part of decarbonization efforts, Marun will introduce hydrogen fuel cell trucks (FCV) and participate in government and Tokyo metropolitan government-led FCV demonstration projects, providing operational data to support carbon neutrality goals.
• Marun sponsored a Japanese television documentary focused on truck drivers to improve industry and employer branding, highlighting driver expertise and experience to attract talent and improve public understanding of the logistics sector.

Progress on Tokyo Stock Exchange Required Capital Cost & Share Price Awareness Initiatives

• Profitability Improvement: The long-term target is to achieve ROE of 5.5% or higher as soon as possible by 2030. The 4th Medium-Term Plan target for operating revenue was 49 billion yen, which is now expected to come in just under 47 billion yen due to lower volume from existing clients, but the ordinary profit target of 1.34 billion yen was achieved one year early, with 1.4 billion yen recorded last fiscal year. Adjusted core ROE is currently in the mid-3% range, so further profitability improvement is needed to hit the 5.5% long-term target. Key progress includes: freight rate hikes that have outpaced initial plans; new business development led by the newly established Business Development Department; a capital alliance with a local packaging materials firm in Vietnam to expand overseas logistics; on-schedule rollout of handheld operational devices, with DX initiatives planned for full implementation this fiscal year; addition of Nakamura Unyu Kiko as a group company to expand the industrial machinery business; participation in two recycling business demonstration projects to prepare for future expansion. The hazardous materials warehouse expansion project has been delayed and will not be completed within the current medium-term plan period, but the company continues to target early execution. All required preparations for the revised Logistics Laws and 2024 logistics industry reform have been completed, with implementation ongoing this fiscal year.
• Shareholder Return Enhancement: The dividend policy was changed from a fixed 8 yen stable dividend to targeting a 50%+ payout ratio, resulting in an expected 500 million yen increase in total shareholder return over the 4th Medium-Term Plan period compared to the prior plan period.
• IR Activity Enhancement: The firm hosts twice-yearly investor briefings for individual investors, publishes quarterly earnings transcripts for institutional investors, conducts annual shareholder surveys to gather feedback for management, and recently launched a renewed corporate website, owned media "Marun Column", and official social media accounts on YouTube, TikTok, and Instagram to improve communication, expand brand recognition, and share information about driver work and attractive workplace conditions.

1. Freight Transportation Segment: Accounts for approximately 50% of total operating revenue. Operating revenue increased 1.4% year-over-year to 5.7 billion yen, with ordinary profit increasing 85 million yen year-over-year to 215 million yen. Gains came from recovered aluminum material shipping volume, progress on freight rate hikes, and cost cuts from prior-period logistics hub restructuring. 2. Energy Transportation Segment: Operating revenue increased 6.1% year-over-year to 4.015 billion yen, with ordinary profit increasing 77 million yen year-over-year to 140 million yen. Despite year-over-year volume declines of 2.2% for petroleum transport and 8.1% for lubricant/chemical product transport driven by weaker domestic demand, freight rate hikes for key clients and expanded existing chemical business drove net growth. 3. Overseas Logistics Segment: Operating revenue decreased 3.8% year-over-year to 1.368 billion yen, while ordinary profit increased 10 million yen year-over-year to 90 million yen. Domestic overseas logistics operations grew on higher air export and industrial machinery transport volume; overseas operations saw lower revenue from reduced shipping volumes for Japanese/European automaker clients in China, but higher profit from improved Chinese warehouse operational efficiency, leading to overall lower revenue higher profit for the segment. 4. Techno Support Segment: Operating revenue increased 9.6% year-over-year to 520 million yen, with ordinary profit increasing 10 million yen year-over-year to 41 million yen. Growth came from revised service contract rates for oil terminal and refinery on-site work, plus higher volume for construction-related contracted work.

• Management confirms that despite the first quarter performing above initial expectations, significant macroeconomic and industry uncertainty remains, so the full-year 2026 March fiscal year guidance is maintained at prior levels: 46.7 billion yen in operating revenue and 1.1 billion yen in ordinary profit.
• Management expects additional costs to be incurred from the second quarter onward for talent acquisition, work environment improvements, regulatory compliance, and further DX implementation.

• Macroeconomic risks: Persistently high commodity and fuel prices, limited recovery in personal consumption, concerns over U.S. trade policy, delayed recovery in the Chinese economy, and geopolitical risks centered on the Middle East have created continued uncertainty for the business outlook. Domestic overall freight shipping volumes are expected to remain below prior-year levels for the second consecutive year, and the industry faces ongoing structural challenges including severe driver shortages.
• Profitability headwinds: Lower volume for some existing client contracts, and increased costs for personnel wages and payments to partner companies to address 2024 industry regulatory reforms have offset some growth gains.
• Downside risk outlook: Lower shipping activity from key clients and reduced trade volumes driven by trade uncertainty could lead to lower-than-expected full-year profitability.

No formal question and answer section is included in the provided transcript.