Tokyu Corporation (9005): FY2025 Results Summary — Flat Operating Profit, Higher Net Profit on Equity-Method Gains

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

Tokyu Corporation reported FY2025 (the year ended March 31, 2026) operating revenue of 1,086.1 billion yen, up +31.1 billion yen (+3.0%) year on year, while operating profit was 103.1 billion yen, down -0.2 billion yen (-0.3%). Profit attributable to owners of parent rose +7.3 billion yen (+9.3%) to 87.0 billion yen. The company states that operating revenue increased as all business segments performed strongly, especially the Hotel and Resort business, and that operating profit was flat YoY, mainly due to the absence of last year’s large property sales.

Consolidated Results (Full-Year Actual)

Profit attributable to owners of parent increased, supported by higher equity in earnings of affiliates and the recognition of negative goodwill, as TOKYU REIT, Inc. became an equity-method affiliate of the Company following the additional acquisition of investment units. Against the forecast as of February, operating profit came in -2.8 billion yen (-2.6%) lower, which the company attributes mainly to the earlier-than-scheduled completion of construction projects across all business segments, particularly in the Transportation and Real Estate businesses, while profit attributable to owners of parent was +3.0 billion yen (+3.7%) above that forecast.

Item (Unit: Billion yen)	FY2025 Results	FY2024 Results	YoY Comparison	FY2025 Forecast as of Feb.
Operating Revenue	1,086.1	1,054.9	+31.1 (+3.0%)	1,088.0
Operating Profit	103.1	103.4	-0.2 (-0.3%)	106.0
Real Estate Sales Operating Profit	14.2	17.0	-2.7 (-16.4%)	13.3
Operating Profit excluding Real Estate Sales	88.9	86.4	+2.5 (+2.9%)	92.6
Business Profit	104.7	102.7	+2.0 (+2.0%)	107.4
Ordinary Profit	116.1	107.7	+8.4 (+7.8%)	117.6
Profit attributable to owners of parent	87.0	79.6	+7.3 (+9.3%)	84.0

On the management indices, EPS was 152.25 yen (+17.44 yen YoY), ROE 10.0% (+0.2), ROA (Business Profit to Total Assets) 3.7% (-0.1), TOKYU EBITDA 227.9 billion yen (+13.7, +6.4%) and EBITDA 191.7 billion yen (+1.7, +0.9%). Business Profit is defined by the company as operating profit plus investment gains (loss) from the equity method (excluding listed companies) plus dividend income related to the real estate business, etc.

Below operating profit, non-operating revenue rose to 31.8 billion yen from 18.6 billion yen, with investment gain from the equity method at 23.9 billion yen (+12.1); the materials note Tokyu Fudosan Holdings at 14.4 (+2.2), Tokyu Construction at 2.0 (+1.0), and 6.6 billion yen of negative goodwill equivalent arising from the additional acquisition of investment units in Tokyu REIT. Non-operating expenses were 18.8 billion yen, including interest paid of 11.8 billion yen (+2.7). Total assets stood at 2,922.8 billion yen (+223.8, +8.3%), the equity ratio at 31.2% (+0.5P), interest-bearing debt at the end of the period at 1,384.7 billion yen (+93.0), and the D/E ratio at 1.5 times.

Segment Results

In Transportation, operating revenue increased on higher passenger volumes in railway and bus services, but operating profit declined YoY due to rising costs mainly from increased hiring and employee compensation; passengers carried rose +3.1% and passenger revenue +1.8%, with Tokyu Railways passenger revenue at 152.8 billion yen (+2.6). In Real Estate, operating profit decreased in reaction to the sale of large condominiums in the previous fiscal year despite the stable profit contribution from the Real Estate Leasing business: Real Estate Sales operating profit was 14.2 billion yen (-2.7), Real Estate Leasing 24.2 billion yen (-2.0) and Real Estate Management 5.7 billion yen (+0.6). Life Service operating profit increased on steady growth across business segments, including Tokyu Recreation and Tokyu Power Supply. Hotel and Resort operating profit increased largely due to higher revenue per available room, with the overall hotel business ADR at 26,681 yen (+2,761 yen YoY) and an occupancy rate of 79.6% (-0.3p).

Segment	Metric (Unit: Billion yen)	FY2025 Results	FY2024 Results	Change
Transportation	Operating Revenue	226.9	220.6	+6.3 (+2.9%)
Transportation	Operating Profit	27.3	28.9	-1.6 (-5.7%)
Real Estate	Operating Revenue	262.9	253.7	+9.2 (+3.6%)
Real Estate	Operating Profit	43.5	48.3	-4.8 (-9.9%)
Life Service (Total)	Operating Revenue	533.2	527.3	+5.8 (+1.1%)
Life Service (Total)	Operating Profit	21.8	19.3	+2.5 (+13.0%)
Hotel and Resort	Operating Revenue	139.3	126.8	+12.4 (+9.8%)
Hotel and Resort	Operating Profit	9.7	6.6	+3.0 (+46.0%)
Elimination etc.	Operating Revenue	-76.3	-73.6	-2.7
Elimination etc.	Operating Profit	0.6	0.0	+0.5

Within Life Service, Retail operating revenue was 336.7 billion yen (-4.4) and operating profit 7.2 billion yen (+0.7), while ICT and Media operating revenue was 196.5 billion yen (+10.3) and operating profit 14.6 billion yen (+1.7); the remarks cite Tokyu Recreation +1.4 and Tokyu Power Supply +0.5 on the profit side. In the Real Estate business, the number of residential units delivered by the Company was 242 (-94 units).

FY2026 Forecast

For FY2026, operating revenue and operating profit are expected to increase due to a rise in the number of passengers of the Transportation business, as well as an increase in condominium sales in the Real Estate business, and profit attributable to owners of parent is expected to increase due to higher operating profit, etc. The company also notes that the FY2026 forecast has been revised upward from the plan updated in May 2025.

Item (Unit: Billion yen)	FY2026 Forecast	FY2025 Results	YoY Comparison	FY2026 Management Plan (announced in May 2025)
Operating Revenue	1,140.0	1,086.1	+53.8 (+5.0%)	1,105.0
Operating Profit	110.0	103.1	+6.8 (+6.6%)	105.0
Real Estate Sales Operating Profit	14.4	14.2	+0.1 (+1.0%)	9.5
Operating Profit excluding Real Estate Sales	95.5	88.9	+6.6 (+7.5%)	95.5
Business Profit	111.5	104.7	+6.8 (+6.5%)	107.0
Ordinary Profit	111.4	116.1	-4.7 (-4.1%)	109.0
Profit attributable to owners of parent	90.0	87.0	+2.9 (+3.4%)	81.0

By segment, the FY2026 forecast calls for Transportation operating revenue of 234.4 billion yen (+7.4) and operating profit of 31.0 billion yen (+3.6); Real Estate operating revenue of 289.7 billion yen (+26.7) and operating profit of 45.9 billion yen (+2.3); Life Service operating revenue of 552.1 billion yen (+18.8) and operating profit of 22.4 billion yen (+0.5); and Hotel and Resort operating revenue of 141.9 billion yen (+2.5) and operating profit of 10.4 billion yen (+0.6). Assumptions disclosed for the year include Tokyu Railways passengers carried of 1,143,831 thousand people (YoY +2.4%) and passenger revenue of 156.8 billion yen (YoY +2.6%), a full-year hotel occupancy rate of 80.6% (YoY +1.0P) with an ADR of 27,887 yen (YoY +1,206 yen), 345 residential units sold (YoY +103 units), and labor costs expected to increase approximately +7.0 billion yen YoY. On management indices, EPS is forecast at 158.15 yen and ROE at 9.6%, with TOKYU EBITDA of 236.8 billion yen.

Shareholder Returns

For FY2026 the company plans an annual dividend of 32 yen per share (a planned 2-yen dividend increase) and share repurchases of up to 20 billion yen / 13 million shares (planned; depending on market conditions and other factors, some or all orders may not be executed). Under the current Three-Year Medium-Term Management Plan, the shareholder return policy is to maintain stable dividends and aim for sustainable dividend growth in line with profit growth (in the medium- to long-term, aiming for a payout ratio of 30%, considering business performance and financial situation) and to implement capital policies including share buybacks in a flexible and proactive manner. The materials state that a total payout ratio of approx. 40% will serve as a near-term guideline. In FY2025, dividend payments were -15.5 billion yen and share repurchases -10.0 billion yen.

Item	FY2025	FY2026 Forecast
Dividend per share (Yen)	30	32
Share repurchases (Billion yen)	10.0	20.0

Medium-Term Plan and Topics

The company updated its management indices and numerical plans based on the earnings outperformance in FY2025, the current business environment, and further management efforts. The FY2027 plan calls for operating revenue of 1,180.0 billion yen, operating profit of 112.0 billion yen, Business Profit of 114.0 billion yen, ordinary profit of 117.0 billion yen, profit attributable to owners of parent of 92.0 billion yen, TOKYU EBITDA of 240.0 billion yen, EBITDA of 210.0 billion yen, interest-bearing debt of 1,440.0 billion yen, total assets of 3,080.0 billion yen and ROE of 9.3%. The materials note that the figures for FY2027 are current targets and will be formally announced again in the next medium-term management plan to be formulated in the future, which is scheduled to be formulated and disclosed during FY2026.

On business portfolio management, the Medium-term Management Plan calls for a total of 70 billion yen in property sales over three years, and the company states it has executed approx. 45 billion yen over a two-year period (FY2024-25), including the decision to transfer two properties to Tokyu REIT in March 2026 and the sale of five rental apartment properties to the private fund “TR1 Realty” launched by Tokyu Asset Management for a total of approx. 14 billion yen. On the investment plan for FY2024-2026, the three-year total was revised to 490.0 billion yen from 520.0 billion yen announced in May 2025, as extensions to Shibuya redevelopment project timelines resulted in a 30-billion-yen reduction in total investment over the three-year period.

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.