Nishi-Nippon Railroad (9031): FY2025 Results Summary — Record Operating, Ordinary and Net Income; Annual Dividend Raised to 70 Yen

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Nishi-Nippon Railroad Co., Ltd. (Nishitetsu, 9031) released its Financial Results Briefing for FY2025 (Fiscal Year Ended March 31, 2026) on Wednesday, May 20, 2026. Consolidated operating revenue came to 4,742 (0.1 billion of yen), up 307 or 6.9% year on year, with operating income of 302, ordinary income of 372 and profit attributable to owners of parent of 322. The materials state that operating income, ordinary income, and profit attributable to owners of parent are the highest ever since the introduction of consolidated accounting in FY1977. For FY2026 the company forecasts operating revenue of 5,100 and profit attributable to owners of parent of 225 under a newly reorganized segment structure.

Consolidated Results (Full-Year Actual)

Consolidated operating revenues were 474,156 Millions of yen, with adjustments of (28,417) Millions of yen. Scope of consolidation at year-end was 84 subsidiaries and 53 affiliated companies. Revenue increased due to contributions from the agriculture-related business in “Other” resulting from making the Hinomaru Group, centered on Hinomaru Co., Ltd., a consolidated subsidiary as well as the opening of “ONE FUKUOKA BLDG.” (April 2025) in the Leasing business of Real Estate. Operating income increased mainly due to increased gross profit in the Global Logistics business of Logistics and in the Housing business of Real Estate. Ordinary income increased partly due to an increase in share of profit of entities accounted for using the equity method as a result of the partial sale of beneficial interests in trust related to the Daimyo Project Special Purpose Company, as well as higher earnings at Fukuoka International Airport Co., Ltd. Profit attributable to owners of parent increased mainly due to an increase in gain on sale of non-current assets as a result of sales of beneficial interests in trust as part of real estate securitization, and an increase in gain on sale of investment securities as a result of disposal of cross-shareholdings.

Figures in the table below are presented in the unit used in the presentation, 0.1 billion of yen. Business profit is defined in the materials as operating income plus dividend income from business investments and equity in share of loss (profit) of entities accounted for using the equity method and others; EBITDA is defined as business profit plus depreciation plus amortization of goodwill (operating expenses).

Item (0.1 billion of yen)	FY2025	FY2024	Change	Percentage change (%)
Operating revenue	4,742	4,435	307	6.9
Operating income	302	267	36	13.3
Ordinary income	372	287	85	29.5
Profit attributable to owners of parent	322	208	113	54.5
Business profit	369	284	85	29.9
EBITDA	610	486	124	25.6
Capital investment	350	618	(268)	(43.3)

On the balance sheet, total assets stood at 8,209 (0.1 billion of yen) as of March 31, 2026 versus 7,821 a year earlier, and interest-bearing debt was 3,630 versus 3,662. The equity ratio improved to 34.6% from 31.8%, the shareholders’ equity ratio to 29.4% from 27.7%, and net assets per share rose to 3,759.40 Yen from 3,214.37 Yen. Cash flows from operating activities were 386 against 156 in the previous year, investing activities were (303) against (745), and financing activities were (133) against 392; cash and cash equivalents at end of period were 458 versus 504.

Segment Results

By segment (former classification), Logistics was the largest revenue contributor at 1,530 (0.1 billion of yen) and recorded the largest operating income increase, up 22 to 61 on higher gross profit in Global Logistics. Real estate delivered operating income of 116, up 19, on higher gross profit in Housing and the opening of ONE FUKUOKA BLDG. in Leasing. Transportation was the only segment with lower operating income, down 9 to 41 on an increase in personnel expenses due to improved benefits.

Segment	Metric (0.1 billion of yen)	FY2025	FY2024	Change
Whole business	Operating revenue	4,742	4,435	307
Whole business	Operating income	302	267	36
Transportation	Operating revenue	832	809	22
Transportation	Operating income	41	50	(9)
Real estate	Operating revenue	950	878	72
Real estate	Operating income	116	97	19
Retail	Operating revenue	740	720	20
Retail	Operating income	7	7	0
Logistics	Operating revenue	1,530	1,480	50
Logistics	Operating income	61	38	22
Leisure and Services	Operating revenue	591	527	64
Leisure and Services	Operating income	64	59	4
Other	Operating revenue	383	310	74
Other	Operating income	26	24	2

In Transportation, operating revenue was 83,172 Millions of yen (up 2.8%) and operating income was 4,055 Millions of yen (down 18.6%). Railway revenue was 23,866 Millions of yen (up 5.6%) and Bus revenue was 56,317 Millions of yen (up 0.8%). In the Railway business, revenues increased due to higher passenger volume mainly resulting from a recovery in demand. In the Bus business, although revenue declined due to service reductions following timetable revisions, overall revenue increased with the recovery of demand for express buses mainly due to stronger inbound demand and the opening of ONE FUKUOKA BLDG. Operating income decreased due to an increase in personnel expenses resulting from improved working conditions.

Item (Millions of yen, Thousands of passengers)	FY2025	FY2024	Change	Percentage change
Railway: Passenger revenue	22,721	21,560	1,161	5.4 %
Railway: Number of passengers	112,883	107,015	5,868	5.5 %
Railway: Non-commuter	49,700	46,692	3,008	6.4 %
Railway: Commuter	63,183	60,323	2,860	4.7 %
Bus: Passenger revenue	46,672	45,739	932	2.0 %
Bus: Charter and specific revenues	4,164	4,056	108	2.7 %
Bus: Number of passengers	207,639	207,637	2	0.0 %
Bus: Non-commuter	118,625	118,659	(34)	△0.0 %
Bus: Commuter	89,014	88,978	36	0.0 %

In Real Estate, operating revenue was 95,010 Millions of yen (up 8.2%) and operating income was 11,624 Millions of yen (up 19.4%), with Leasing revenue of 38,727 Millions of yen and Housing revenue of 48,022 Millions of yen; total housing units sold were 852 against 885 a year earlier. In Logistics, operating revenue was 153,012 Millions of yen (up 3.4%) and operating income was 6,080 Millions of yen (up 58.0%), with Global logistics revenue of 160,122 Millions of yen and operating income of 6,011 Millions of yen, reflecting an increase in yen equivalent caused by foreign exchange fluctuation and higher import and export cargo volumes. In Leisure and Services, operating revenue was 59,088 Millions of yen (up 12.1%) and operating income was 6,371 Millions of yen (up 7.4%), with Hotel revenue of 37,426 Millions of yen and Hotel operating income of 3,867 Millions of yen. In Retail, operating revenue was 73,971 Millions of yen (up 2.8%) and operating income was 670 Millions of yen (up 2.4%). In Others, operating revenue was 38,319 Millions of yen (up 23.8%) and operating income was 2,571 Millions of yen (up 8.8%), mainly due to making Hinomaru Group a consolidated subsidiary in the agriculture-related business, which contributed revenue of 8,692 Millions of yen.

FY2026 Forecast

Starting from FY2026, the company updates its segment structure in order to implement management practices in alignment with CYD Vision 2035: “Transportation” is renamed “Mobility”; “Real estate” is restructured into Real estate leasing, Real estate sales, Overseas real estate and Real estate solutions; Hotel, Travel and Leisure are separated from “Leisure and Services” to create “Hotel and Leisure”; “Retail” is renamed “Retail and Restaurants”; there are no changes to “Logistics”; and other business segments are reorganized and renamed to create “Business support”. The FY2025 comparatives shown in the forecast tables are therefore presented on the new classification. The materials also note that the change includes a change in the method of presentation of items that had been treated as non-operating income/loss and other items in the overseas real estate business under the real estate segment, and that as a result operating revenue and operating income increased 1,634 million yen and 1,108 million yen, respectively, and ordinary income decreased 525 million yen in FY2025 results.

Item (0.1 billion of yen)	FY2026 (Forecast)	Results in FY2025	Change	Percentage change
Operating revenue	5,100	4,758	342	7.2 %
Operating income	245	313	(68)	(21.8) %
Ordinary income	245	367	(122)	(33.2) %
Profit attributable to owners of parent	225	322	(97)	(30.0) %
Business profit	271	369	(98)	(26.5) %
Depreciation	257	241	16	6.6 %
EBITDA	528	610	(82)	(13.4) %
Capital investment	600	350	250	71.4 %

The materials attribute the revenue increase to Global Logistics (increase in import/export volume), Agriculture-related (contribution from Hinomaru Group becoming a consolidated subsidiary) and Railway (effect of fare revision), while the decline in operating income is attributed to Real Estate Sales (lower gross profit margin), Overseas Real Estate (decrease in business support fee) and Construction related (lower gross profit margin). The decrease in ordinary income reflects a decrease in share of profit of entities accounted for using the equity method.

Segment (new classification)	Metric (0.1 billion of yen)	FY2026 (Forecast)	Results in FY2025	Change
Whole business	Operating revenue	5,100	4,758	342
Whole business	Operating income	245	313	(68)
Mobility	Operating revenue	1,033	982	51
Mobility	Operating income	58	58	0
Real estate	Operating revenue	1,000	966	34
Real estate	Operating income	74	118	(44)
Hotel and Leisure	Operating revenue	460	444	16
Hotel and Leisure	Operating income	47	52	(5)
Retail and Restaurants	Operating revenue	765	742	23
Retail and Restaurants	Operating income	5	5	(0)
Logistics	Operating revenue	1,680	1,530	150
Logistics	Operating income	59	61	(2)
Business support	Operating revenue	385	314	71
Business support	Operating income	10	23	(13)

Shareholder Returns

The dividend policy stated in the materials places emphasis on stable return of profits: the company’s policy is to pay dividends on a steady and continuous basis while strengthening its financial position and operating foundation by securing an optimal level of retained earnings. For FY2025 the most recent dividend forecast was revised upward from 50 yen to 70 yen per year, including a year-end dividend of 45 yen, against 40 yen for FY2024. On the consolidated dividend payout ratio, the materials show 15.0% for FY2024 and 16.5% for FY2025, with total payout ratios of 29.4% and 25.3% respectively. On share buybacks, the company conducts a share buyback as appropriate in response to changes in its business environment and financial performance with capital efficiency in mind; in FY2025 two million shares were acquired for 4.1 billion yen, using funds from the sale of shares held by the company through a review of the size of its policy shareholdings, following 3.0 bn yen of share buybacks in FY2024.

Under the shareholder return policy for the 17th Medium-term Management Plan period (FY2026–FY2028), the company will maintain a consolidated payout ratio of 30% or higher, pay dividends in line with profit growth, and conduct share buybacks as necessary, with treasury shares newly acquired to be cancelled as a general rule. The dividend per share shown for FY2026 is 90 yen, with a consolidated dividend payout ratio of 30.4%.

Medium-Term Plan and Topics

Reviewing the 16th Medium-term Management Plan (2023-2025), the materials state that consolidated business profit and consolidated EBITDA achieved the plan targets, and that gross profit growth in the real estate segment, the demand increase in the railway business, and asset disposals drove the FY2025 ROE to 12.1%, achieving the target set out in the plan. FY2025 results were consolidated business profit of 36.9 bn yen, consolidated EBITDA of 61.0 bn yen, a net interest-bearing debt to EBITDA ratio of 5.2 times and a D/E ratio of 1.3 times.

The 17th Mid-term Management Plan (2026-2028) is themed “A new stage of growth opened up through people, knowhow, and brand equity” and sets FY2028 financial indicators of consolidated business profit of 40.0 bn yen, consolidated EBITDA of 70.0 bn yen, ROE of approximately 9%, a net interest-bearing debt to EBITDA ratio of approximately 6x and a D/E ratio of approximately 1.4 times. FY2035 targets under CYD Vision 2035 were raised to consolidated business profit of 60.0 bn yen, consolidated EBITDA of 90.0 bn yen and ROE of approximately 10%. The investment plan for the three years from FY2026 to FY2028 totals 210.0 bn yen, and the materials note that although profit will temporarily decline in FY2026, it is expected to exceed the FY2025 level (excluding temporary share of profit of entities accounted for using the equity method) in FY2027.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.