Nagoya Railroad (9048): FY2025 Results Summary — Traffic Recovery Offset by Widening Trucking Losses

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

Nagoya Railroad Co., Ltd. (Meitetsu) reported operating revenues of 691,583 million yen for FY2025, the fiscal year ended March 31, 2026, an increase of 863 million yen or 0.1% year on year. Operating income fell 5,890 million yen, or 14.0%, to 36,185 million yen, and profit attributable to owners of the parent declined 14,778 million yen, or 39.2%, to 22,954 million yen. The Traffic Business posted higher revenue and income, while the Transport Business and the Real estate (development) Business declined. Against the latest forecast announced in November, operating revenues came in 3,416 million yen lower but every profit line exceeded the forecast.

Consolidated Results (Full-Year Actual)

The company describes FY2025 as “Higher revenue and Lower profit.” Revenues increased especially in the Traffic Business, in which a consolidated subsidiary was included, while all line-item profits decreased due to increased operating expenses such as personnel costs and the absence of special factors. On the expense side, personnel costs rose 13.9 billion yen (Traffic +8.8, Track +1.6, Others +1.3) and depreciation and amortization rose 4.6 billion yen (Traffic +2.3, Real Estate +1.5), while cost of sales fell 14.2 billion yen (Real Estate -15.1, Distribution +0.8). Ordinary income of 38,363 million yen fell 19.5%, reflecting in part a decrease in equity in net earnings of affiliates, which declined 2,488 million yen to 3,310 million yen. Net profit declined primarily on a lower gain on bargain purchase and an increase in income taxes; extraordinary income of 13,663 million yen included a gain on exchange of shares of Chukyo TV. Broadcasting Co., Ltd. of 5,470 million yen, while income taxes of 19,954 million yen included tax expenses arising from the gain on share exchange. ROE was 4.8%, down 3.6 pt, and the net interest-bearing debt/EBITDA multiple was 7.6 times.

Item (Millions of yen, %)	FY2025	FY2024	Change	Latest Forecast as of Nov.	Change
Operating revenues	691,583	690,720	863 [(0.1)]	695,000	(3,416)
Operating income	36,185	42,076	(5,890) [(14.0)]	34,000	2,185
Ordinary income	38,363	47,671	(9,307) [(19.5)]	34,000	4,363
Extraordinary income	13,663	15,664	(2,001)	11,500	2,163
Extraordinary losses	13,247	12,095	1,151	11,000	2,247
Profit before income taxes	38,779	51,240	(12,461) [(24.3)]	34,500	4,279
Income taxes	19,954	13,715	6,239	17,100	2,854
Profit attributable to non-controlling interests	(4,129)	(208)	(3,921)	(3,600)	(529)
Profit attributable to owners of the parent	22,954	37,733	(14,778) [(39.2)]	21,000	1,954

Note: Figures in brackets are the year-on-year percentage changes, as presented in the materials.

Segment Results

On a year-on-year basis, the Traffic, Leisure and Services, Aviation Services and Others segments recorded increased revenue and income; the Distribution Business recorded increased revenue with decreased income; and the Transport and Real Estate segments recorded decreased revenue and income. Within the Transport Business, Trucking revenues fell 3.7% to 189,410 million yen and its operating loss widened to 8,908 million yen; the company states that in FY2025 operating income in the Transport (Trucking) Business was approximately 8.9 billion yen in loss as it failed to secure sufficient cargo volume for the distribution system, although the effects of the reduction in commission fees and freight unit price adjustment began showing in the second half. In the Real Estate Business, Real Estate Development revenues fell 32.2% to 44,825 million yen and its operating income fell 65.8% to 3,164 million yen, with the number of condominiums sold by MEITETSU CITY DESIGN at 727 units versus 893 a year earlier, while Real Estate Leasing revenues rose 12.4% to 64,220 million yen. In the Distribution Business, revenues rose mainly due to strong performance of the closeout sale at the Meitetsu Department Store Main Store, while the operating loss widened due in part to a deterioration in profitability from other merchandise sales.

Segment (Millions of yen, %)	Operating revenues FY2025	Operating revenues FY2024	Percent Change	Operating income FY2025	Operating income FY2024	Percent Change
Traffic	178,272	159,825	11.5	21,803	19,602	11.2
Transport	170,758	180,183	(5.2)	(7,711)	(3,721)	—
Real Estate	114,779	129,028	(11.0)	13,573	18,947	(28.4)
Leisure and Services	106,779	102,682	4.0	3,429	2,546	34.7
Distribution	69,635	69,112	0.8	(1,900)	(1,292)	—
Aviation Services	32,635	29,781	9.6	2,583	2,266	14.0
Others	69,584	67,973	2.4	5,340	4,622	15.5
Adjustment	(50,861)	(47,867)	—	(932)	(895)	—
Total	691,583	690,720	0.1	36,185	42,076	(14.0)

Traffic Business and Transportation Results

Traffic Business operating revenues rose 11.5% to 178,272 million yen and operating income rose 11.2% to 21,803 million yen, mainly due to an increase in the number of railroad passengers in addition to contributions from the Miyagi Transportation Group newly consolidated in the bus business in the previous fiscal year. By sub-business, Railroad revenues rose 3.6% to 101,450 million yen with operating income of 15,296 million yen (down 0.8%), Bus revenues rose 31.7% to 55,476 million yen with operating income of 5,136 million yen (up 44.7%), and Taxi revenues rose 7.2% to 23,506 million yen with operating income of 1,118 million yen. At Nagoya Railroad, non-commuter passengers increased a solid 4.4% year on year, exceeding the level recorded in FY2019, attributable to a significant increase on the Airport Line, increased usage in the Nishi-Mikawa area due to growth in the number of manufacturing workers, and an increase in the exchange population across all lines. Commuter pass usage also continued its steady increasing trend, rising 1.6% year on year. The company notes that although the Airport Line was affected by a significant reduction in flights to and from China at Chubu Centrair International Airport due to heightened tensions in Japan-China relations, it continued to exceed the previous fiscal year level as the number of air passengers increased throughout the year.

Nagoya Railroad transportation results	Passengers FY2025 (Thousands of people)	Passengers FY2024	Percent Change	Transfer revenues FY2025 (Millions of yen)	Transfer revenues FY2024	Percent Change
Non-commuters	126,647	121,323	4.4	55,893	53,227	5.0
Work commuters	151,284	148,848	1.6	32,649	31,961	2.2
School commuters	97,149	96,420	0.8	6,892	6,868	0.4
Commuters	248,433	245,268	1.3	39,542	38,830	1.8
Total	375,080	366,591	2.3	95,436	92,058	3.7

Note: Transfer revenues from non-commuters include special car fees.

FY2026 Forecast

For FY2026, Meitetsu forecasts operating revenue of 734,000 million yen (up 6.1%), operating income of 45,000 million yen (up 24.4%), ordinary income of 47,000 million yen (up 22.5%) and profit attributable to owners of the parent of 39,000 million yen (up 69.9%). Overall operating revenue is expected to increase, centered on the Real Estate Business, despite lower revenue in the Leisure and Lifestyle Services Business due to the Meitetsu Department Store closure. Overall operating income is projected to increase, driven by an improvement in the profitability of the Transport Business, whose operating income is forecast to swing to a profit of 3,500 million yen from a loss of 7,711 million yen. EBITDA is forecast at 96,400 million yen, capital investment at 122,500 million yen (down 21.5%), depreciation and amortization at 51,400 million yen, and net interest-bearing debt at 650,000 million yen. Effective April 2026, the Company has changed some of its segment classifications and names, reorganizing the disclosed segments from seven to five through measures such as the new establishment of the Aviation, IT and Engineering Services Business.

Item (Millions of yen, %)	FY2026 Forecast	FY2025 Results	Change	Percent Change
Operating revenue	734,000	691,583	42,417	6.1
Operating income	45,000	36,185	8,815	24.4
Ordinary income	47,000	38,363	8,637	22.5
Profit attributable to owners of the parent	39,000	22,954	16,046	69.9
EBITDA	96,400	82,701	13,699	16.6
Capital investment	122,500	155,980	(33,480)	(21.5)
Depreciation and amortization	51,400	46,516	4,884	10.5
Net interest-bearing debt	650,000	631,019	18,981	3.0

Shareholder Returns

The annual dividend per share was 40.0 yen for FY2025, against 38.5 yen for FY2024. For FY2026 the company forecasts an annual dividend of 60.0 yen per share, for a consolidated dividend payout ratio of 30% reflecting the financial results forecast (net income of 39.0 billion yen and ROE of 8.0%). From FY2026 the policy is to maintain a consolidated dividend payout ratio of 30% and above and to set a minimum annual dividend of 60 yen per share to ensure stable shareholder returns. Share buybacks will be carried out flexibly as necessary, and shareholder benefits will be enhanced to encourage long-term shareholding by individual shareholders, including the addition of a shareholder free train pass for long-term shareholders. Cash allocation for FY2026 assumes shareholder returns of 8.0 billion yen or more, against operating cash flow of 77.5 billion yen or more and sale/securitization of assets of 35.0 billion yen or more.

Key management indicators	FY2024 actual	FY2025 actual	FY2026 forecast	FY2026 target
Operating income	¥42.0 billion	¥36.1 billion	¥45.0 billion	¥50.0 billion
ROE	8.4%	4.8%	8.0%	Approx. 8%
Net interest-bearing debt/EBITDA ratio	6.3x	7.6x	6.7x	6.0x range
Dividend per share	¥38.5	¥40.0	¥60.0	—

Medium-Term Plan and Topics

Meitetsu announced the re-evaluation and review of the Nagoya Station District Redevelopment Project in December 2025 and plans to announce the direction of the review within FY2026, proceeding on the premise of lowering the degree of difficulty and risks and reducing the scale of investment while taking into account the feasibility of the business and its financial soundness, and continuing discussions on bringing in new external partners. To improve capital efficiency, the company continues to promote securitization of assets through private funds and REITs and sale to external parties, targeting 130.0 billion yen from FY2024 to FY2030, of which 25.0 billion yen was securitized in FY2024 and FY2025; it launched a REIT business in October 2025. The cross-shareholding sale target through FY2030 has been revised to 60.0 billion yen based on the market price as of March 31, 2026, from the previous 50.0 billion yen, with 9.9 billion yen sold in FY2024 and FY2025. As part of business portfolio management, the company decided to withdraw from the Transport (forwarder) Business, announced on May 11, 2026, finalizing the sale of Meitetsu World Transport Co., Ltd. to Shibusawa Logistics Corporation. In the Real Estate Business, Meitetsu City Design took over the condominium development and sales business from YAHAGI REAL ESTATE in April 2026, and the Group is building a collaborative framework with Tosei. The FY2026 targets under the medium-term management plan are operating income of 50.0 billion yen, ROE of approximately 8% and a net interest-bearing debt/EBITDA ratio in the 6.0x range; the company states that while operating income is expected to fall short of the target in FY2026, it expects to achieve the target for ROE and the net interest-bearing debt/EBITDA ratio.

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.