Operating income +24.0% and EBITDA +12.5% confirm strong core business momentum; with the impending abolition of the Liquor Tax Special Measures Law, the focus is on balancing mainland/overseas growth with enhanced shareholder returns

Key Positives From The Results

The Alcoholic & Non-Alcoholic Beverages segment drove consolidated results with revenue +5.3% and operating income +13.5%, lifting the consolidated OPM to 14.5% (+2.4pt YoY). A three-pronged approach—price pass-through, manufacturing efficiency gains, and SG&A containment—delivered a clear step-up in earnings power.

• Gross Profit Margin
  improved to 51.8% (+1.5pt YoY). COGS was held essentially flat at just JPY -11M YoY, making gross profit expansion the primary driver behind the +24.0% operating income growth
• Tourism & Hotel Segment
  posted operating income of JPY 690M (+139.2% YoY). Revenue loss from the Hotel Naha divestiture was absorbed by higher room rates at Motobu Resort and SG&A reductions, pushing OPM to 11.9% (vs. 4.7% prior year)
• EBITDA
  reached JPY 5,876M (+12.5% YoY), with EBITDA margin hitting 19.8%. The improving trend toward the mid-term plan target of 25.1% remains intact
• Equity Ratio
  improved to 41.9% (vs. 37.3% prior year). Progress on treasury share cancellation and debt repayment has strengthened the balance sheet
• Shareholder Returns Enhanced
  alongside the new mid-term plan: DOE target raised from 7.5% to 8.0%, and a share buyback (up to JPY 550M) was approved. Total payout ratio is projected at 68.9% for next fiscal year

Key Concerns From The Results

Net income declined 50.1% YoY due to the absence of JPY 6,888M in real estate disposal gains booked in the prior year. The swing to negative operating cash flow of JPY -654M warrants attention from a liquidity perspective.

• Operating CF turned negative at JPY -654M
  (vs. +JPY 6,121M prior year). This was primarily driven by JPY -4,423M in corporate tax payments and withholding tax related to the prior-period share buyback, but confirming underlying cash generation capacity from core operations remains a key issue
• FY2027/3 net income guidance of JPY 2,932M (-19.5%)
  . Beyond the absence of extraordinary gains, the October liquor tax revision and abolition of special measures remain H2 cost headwinds
• Cash and cash equivalents declined to JPY 9,506M (-28.0% YoY)
  . Against interest-bearing debt of JPY 16,360M, cash management to fund both growth investments and shareholder returns will be tested
• Interest expense continued to rise to JPY 271M
  (vs. JPY 226M prior year, +19.9%). The interest burden on JPY 15,655M in long-term borrowings is pushing up non-operating expenses

Focus Areas / Items To Monitor Going Forward

• Quantitative impact estimate of the October 2026 liquor tax revision and abolition of special measures. The extent to which cost reductions and price pass-through can mitigate the impact is the single largest variable for next-year earnings
• Revenue breakdown and growth rates for mainland, overseas, and licensing businesses. Visibility into the contribution of each growth driver toward the mid-term plan CAGR target of 5.9%
• Scale and ROI of Motobu Resort's new annex building and value-up investments. Sustainability of demand in northern Okinawa following the opening of JUNGLIA

Key Financial Highlights

The -50.1% YoY decline in net income is primarily attributable to the absence of JPY 6,888M in gains on disposal of fixed assets (real estate sale) booked in the prior year. On an operating income basis, the +24.0% increase underscores a clear improvement in core earnings power.

Performance By Business Segment

Next Fiscal Year Guidance

For next fiscal year, the company plans to absorb the impact of the liquor tax revision and abolition of special measures through product portfolio restructuring, cost reduction, and mainland/overseas growth, targeting increases in EBITDA, operating income, and recurring profit. Net income is guided lower due to the absence of extraordinary gains in the current period (JPY 1,055M related to the Hotel Naha transfer).

• Revenue: JPY 31,119M (+4.7%)
• EBITDA: JPY 5,948M (+1.2%)
• Operating Income: JPY 4,352M (+0.9%)
• Recurring Profit: JPY 4,185M (+1.6%)
• Net Income: JPY 2,932M (-19.5%)
• EPS: JPY 66.83 (-24.6%)

Commentary On Shareholder Returns

The full-year dividend was raised JPY 4 from the initial forecast of JPY 40 to JPY 44 (payout ratio: 49.7%). Next-year dividend is guided at JPY 34 (payout ratio: 50.2%). Alongside the new mid-term plan, the DOE target was raised from 7.5% to 8.0%, with the policy of applying whichever is higher—DOE or a 50% payout ratio—maintained. Additionally, a share buyback was approved (up to 425,000 shares / JPY 550M). Total shareholder returns for next fiscal year are projected at JPY 2,021M (total payout ratio: 68.9%), an increase of JPY 191M from JPY 1,830M in the current period.

Financial Position

Total assets were compressed through the Hotel Naha divestiture and treasury share cancellation, improving the equity ratio to 41.9% (vs. 37.3% prior year). Interest-bearing debt remains at JPY 16,360M, centered on long-term borrowings, but repayment is proceeding as planned.

News Released Alongside The Earnings Announcement

Major Announcements During The Quarter

Large-Shareholding Filings / Material Proposals Over The Past Year