Kamigumi Co.,Ltd. Q2 FY2026 earnings call

Mid-term Management Plan Framework

• Kamiumi released its 10-year Long-Term Vision 2035 and 5-year Mid-Term Management Plan 2030 in May of the current year. The mid-term plan is positioned as a period for structural reform and active investment in growth businesses to deliver on the long-term vision.
• Core objectives include expanding profit from base businesses, cultivating new growth businesses to build new operational foundations, implementing business portfolio management, and advancing reforms in human resources and digital transformation (DX) management foundations.

Mid-term Plan Performance Progress

• The mid-term plan sets a final year operating revenue target of 350 billion yen and a 4.6% average annual growth target. Performance is currently broadly on track to meet plan targets.
• Growth business strategic initiatives have already launched, but material contributions to expanded profit are not expected until after the next fiscal year.

Investment Progress

• The mid-term plan calls for total planned investment of 243 billion yen over the 5-year period: 187 billion yen for fixed asset investment, and 56 billion yen for equity stakes and acquisitions. Cumulative completed investment as of the quarter is approximately 50 billion yen.
• Completed recent investments include acquiring shares of KLKG Logistics HD from the Kawasaki Kisen Kaisha group to strengthen forwarding capabilities via domestic and international collaboration, and completing construction of a new constant-temperature logistics center in Tomakomai, Hokkaido to support expanded handling of feed, grain, rice, and fresh produce.

Global Business Expansion Progress

• In India: Kamiumi India was established at the end of February, and local logistics services targeting existing clients and Japanese firms are now being rolled out. Saurashtra Freight Pvt. Ltd, based at Mundra Port in western India, has recently been acquired as a subsidiary. The firm will leverage its forwarding and terminal operations capabilities to expand local logistics business.
• In North America: Kamiumi USA opened a new branch in Savannah, Georgia (the third largest cargo port in the U.S.) to pursue new contracts, and launched operations of a new self-operated warehouse near the Ports of Los Angeles and Long Beach in California. The firm will use these new locations to deliver higher value-added services and expand regional business.

Shareholder Return

• An interim dividend of 90 yen per share will be paid. The year-end dividend forecast is maintained at the initial planned level of 95 yen per share, bringing the full-year total dividend to 185 yen per share, for an expected payout ratio of 63.1%. The board approved a share buyback program capped at 3.8 million shares (13 billion yen), and 804,300 shares (3.6 billion yen) had been purchased as of October 31.

1. Logistics Business: Revenue grew 8.7% year-over-year to 130.224 billion yen, accounting for 88.9% of total operating revenue. Within this segment, port transportation saw 6.952 billion yen in revenue growth driven by higher container handling volumes, and domestic transportation added 1.768 billion yen in revenue growth from temporary cargo handling increases. Operating profit grew 14.3% year-over-year to 16.817 billion yen, making up 87.2% of total operating profit. Growth was driven by temporary demand spikes for some cargo and successful implementation of appropriate pricing initiatives. 2. Other Business: Revenue fell 7.4% year-over-year to 18.044 billion yen, accounting for 12.3% of total operating revenue. The revenue decline came from lower volume of goods sales including fuel distribution, with a total decrease of 0.994 billion yen. Operating profit grew 1.2% year-over-year to 2.46 billion yen, making up 12.8% of total operating profit. Profit growth was driven by a higher share of directly operated nuclear-related projects in the heavy engineering and construction segment.

• Full-year 2026 March fiscal year guidance has been revised upward to reflect the stronger-than-expected first half performance, with new forecasts of 287.1 billion yen in operating revenue, 35 billion yen in operating profit, 39.2 billion yen in ordinary profit, and 29.4 billion yen in net profit attributable to parent company shareholders. The majority of the first half upside came from temporary factors, so the second half forecast is largely maintained at the initial planned level.
• The end-of-year dividend forecast is maintained at 95 yen per share, unchanged from the initial guidance, resulting in a full-year dividend of 185 yen per share.
• The Mid-Term Management Plan 2030 is currently progressing broadly in line with the original schedule, with full-year target delivery still targeted.

• External uncertainties include changes to client production plans and supply chains stemming from U.S. tariffs, and shifts in economic policy following the inauguration of Japan's new administration; the impact of these changes on Kamiumi's business remains unclear at present.
• The yen's recent sharp depreciation creates downside risk: while yen depreciation provides a modest benefit to export volumes, it raises costs for imported cargo. However, management does not expect this to lead to a sharp drop in the raw material cargo that Kamiumi handles, and does not view current yen weakness as a major barrier to hitting mid-term plan targets.
• Large initial capital outlays are required for new growth investments such as grid-scale energy storage, requiring careful evaluation of profitability including government subsidies before proceeding.

Q: What is the underlying earnings performance excluding temporary factors in H1, and what is the impact of price adjustments? / A: Even after excluding temporary factors, performance beat the initial forecast thanks to stronger-than-expected container handling and grain volumes. Price negotiation impacts added approximately 1.5 billion yen to operating revenue, which also came in slightly above initial expectations.

Q: Investment progress looks faster than planned for the 5-year mid-term plan. Is it progressing better than expected, and could total investment end up higher than the current planned amount? / A: Investment is progressing smoothly, driven by internal changes to evaluation methods and cultural shifts introduced alongside the new mid-term plan. To date, investment has remained within the total 243 billion yen planned for the full 5-year period.

Q: Container handling volume is growing faster than the broader macro environment. What is driving this outperformance? / A: Outperformance comes from increased handling volumes from partner shipping lines compared to last year, plus the start of new handling operations at select ports that have added new volume.

Q: What are Kamiumi's plans for the energy storage market, in terms of scale and timeline? / A: Kamiumi is prioritizing the energy storage market, with the first project being a facility adjacent to its existing mega solar operation in Kasai, Hyogo, and several additional projects currently in planning. Initial investment requirements are large, so the firm will evaluate profitability (including subsidies) and pursue investment over a long time horizon.

Q: What impact will recent sharp yen depreciation have on the mid-term plan? / A: Yen depreciation modestly benefits exports, but large export growth is unlikely given changing industry structure. It raises costs for imported cargo, creating downside risk, but a sharp drop in the raw material cargo Kamiumi handles is not expected. Current yen weakness is not viewed as a major barrier to hitting mid-term plan targets.