Keikyu Corporation (9006): FY2025 Results Summary — Revenue Up, Operating Profit Down as Prior-Year Real Estate Gain Lapses

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Keikyu Corporation reported revenue from operations of 304,192 million yen for the fiscal year ended March 31, 2026 (FY2025), up 10,332 million yen or 3.5% year on year, while operating profit declined 2,089 million yen, or 5.9%, to 33,553 million yen. As the company summarized it, revenue increased year on year, while profit decreased: the Transportation and Leisure Services businesses reported strong results; however, profit decreased due to higher personnel expenses, as well as the absence of the sale of interests in business sites in the Real Estate segment in the previous fiscal year. Profit attributable to owners of parent nevertheless increased 13.1% to 27,492 million yen, as the company recorded a 19.7 billion yen gain on sales of non-current assets with the transfer of national highway land in connection with the Shinagawa Station west exit area development project of the Ministry of Land, Infrastructure, Transport and Tourism.

Consolidated Results (Full-Year Actual)

Ordinary profit fell 17.5% to 28,854 million yen, while net income per share rose to 101.90 yen from 88.40 yen and ROE improved 0.5 percentage points to 7.2%. Against the November forecast, revenue from operations and operating profit exceeded targets due to an increase in completed construction under Other and stronger-than-expected performance in the Leisure Services segment. Net income fell short of forecast due to an impairment loss of 10.1 billion yen associated with the impact of future repair plans for the building housing Keikyu Department Store and the suspension of the Kurihama Line double-tracking project. The amount of capital investment rose 39.7% to 122,938 million yen.

Item (Millions of yen)	FY2024	FY2025	Change	Change (%)
Revenue from operations	293,860	304,192	+10,332	+3.5%
Operating profit	35,642	33,553	(2,089)	(5.9%)
Ordinary profit	34,971	28,854	(6,117)	(17.5%)
Profit attributable to owners of parent	24,301	27,492	+3,191	+13.1%
Net income per share (yen)	88.40	101.90	+13.50	+15.3%
ROE	6.7%	7.2%	+0.5pt.	－
Amount of capital investment	88,029	122,938	+34,909	+39.7%
Depreciation and amortization	28,541	29,286	+745	+2.6%

Segment Results

Transportation revenue from operations rose 2.6% to 121,591 million yen, with railway up 2.4% to 85,926 million yen driven by growth in domestic transportation demand and bus up 3.7% to 31,978 million yen following fare revisions on general routes (March 2025) and on airport and medium-distance routes (July/August 2025); segment operating profit edged down 1.0% to 18,683 million yen. Real Estate revenue fell 5.5% to 50,996 million yen and operating profit fell 32.4% to 4,680 million yen, reflecting the absence of the sale of interests in business sites in the previous year, although real estate leasing revenue rose 7.6% to 20,844 million yen on a higher occupancy rate at YOKOHAMA SYMPHOSTAGE and new lease apartments. Leisure Services revenue rose 9.1% to 34,594 million yen and operating profit rose 12.4% to 5,561 million yen, with the business-hotel guest room occupancy rate up 3.8 points to 91.4%. Retailing revenue rose 4.5% to 84,874 million yen, and Other revenue rose 19.6% to 57,797 million yen on an increase in completed construction.

Segment (Millions of yen)	Metric	FY2024	FY2025	Change	Change (%)
Transportation	Revenue from operations	118,531	121,591	+3,060	+2.6%
Transportation	Operating profit	18,877	18,683	(194)	(1.0%)
Real Estate	Revenue from operations	53,964	50,996	(2,968)	(5.5%)
Real Estate	Operating profit	6,928	4,680	(2,247)	(32.4%)
Leisure Services	Revenue from operations	31,704	34,594	+2,890	+9.1%
Leisure Services	Operating profit	4,946	5,561	+615	+12.4%
Retailing	Revenue from operations	81,251	84,874	+3,622	+4.5%
Retailing	Operating profit	2,083	2,156	+72	+3.5%
Other	Revenue from operations	48,334	57,797	+9,462	+19.6%
Other	Operating profit	3,646	3,815	+169	+4.7%

Railway Passengers and Railway Revenue

The number of passengers carried on the railway business totaled 456,289 thousand, up 10,401 thousand or 2.3% year on year, and revenue from the railway business totaled 81,473 million yen in FY2024 and 83,513 million yen in FY2025, an increase of 2,040 million yen or 2.5%. Passengers carried at the two Haneda Airport stations totaled 56,625 thousand, up 2,911 thousand or 5.4%, with Haneda Airport Terminal 1 and 2 up 6.1% and Haneda Airport Terminal 3 up 3.2%. Among railway main operating expenses, personnel expenses rose 918 million yen to 20,349 million yen and repair expenses rose 241 million yen to 5,761 million yen.

Item	Unit	FY2024	FY2025	Change	Change (%)
Number of passengers carried — Commuter	Thousands of people	227,681	231,606	+3,925	+1.7%
Number of passengers carried — Non commuter	Thousands of people	218,207	224,683	+6,476	+3.0%
Number of passengers carried — Total	Thousands of people	445,888	456,289	+10,401	+2.3%
Revenue from railway business — Commuter	Millions of yen	28,915	29,405	+490	+1.7%
Revenue from railway business — Non commuter	Millions of yen	52,558	54,107	+1,549	+2.9%
Revenue from railway business — Total	Millions of yen	81,473	83,513	+2,040	+2.5%
Haneda Airport Terminal 1 and 2	Thousands of people	40,533	43,023	+2,490	+6.1%
Haneda Airport Terminal 3	Thousands of people	13,181	13,602	+421	+3.2%
Two Haneda Airport stations — Total	Thousands of people	53,714	56,625	+2,911	+5.4%

FY2026 Forecast

For the fiscal year ending March 31, 2027 (FY2026), Keikyu is looking toward a substantial increase in revenues and profit due to full-scale performance in the real estate turnover business. The company forecasts revenue from operations of 401.5 billion yen (up 32.0%), operating profit of 45.0 billion yen (up 11.4 billion yen, or 34.1%), ordinary profit of 44.0 billion yen and profit attributable to owners of parent of 30.0 billion yen, with ROE reaching 8.0%. Real Estate segment revenue is forecast to rise 181.4% to 143.5 billion yen and segment operating profit to rise to 20.0 billion yen, reflecting real estate securitization and an increase in the number of condominiums sold. Transportation segment operating profit is forecast to decline 14.4% to 16.0 billion yen, mainly due to increases in depreciation and amortization and repair expenses in the railway business and higher personnel expenses in the bus business; the taxi line is shown as － for FY2026 following the transfer of the taxi business in March 2026.

Item (Billions of yen unless noted)	FY2025 Full-Year Results	FY2026 Full-Year Forecast	Change (Full Year)	Change (%)
Revenue from operations	304.1	401.5	+97.3	+32.0%
Operating profit	33.5	45.0	+11.4	+34.1%
Ordinary profit	28.8	44.0	+15.1	+52.5%
Profit attributable to owners of parent	27.4	30.0	+2.5	+9.1%
Net income per share (yen)	101.90	115.06	+13.16	+12.9%
ROE	7.2%	8.0%	+0.8pt.	－
Depreciation and amortization	29.2	32.4	+3.1	+10.8%
Transportation — Revenue from operations	121.5	120.9	(0.6)	(0.6%)
Transportation — Operating profit	18.6	16.0	(2.6)	(14.4%)
Real Estate — Revenue from operations	50.9	143.5	+92.5	+181.4%
Real Estate — Operating profit	4.6	20.0	+15.3	+327.3%
Leisure Services — Revenue from operations	34.5	36.8	+2.2	+6.4%
Leisure Services — Operating profit	5.5	5.7	+0.1	+2.5%
Retailing — Revenue from operations	84.8	87.5	+2.6	+3.1%
Retailing — Operating profit	2.1	2.4	+0.2	+11.7%
Other — Revenue from operations	57.7	56.2	(1.5)	(2.8%)
Other — Operating profit	3.8	2.4	(1.4)	(37.1%)

Shareholder Returns

Based on a dividend payout ratio policy of around 40%, the annual dividend will be 46 yen, continuing annual dividends of at least 46 yen. The FY2025 plan is an annual dividend of 46.0 yen per share (interim 23.0 yen, year-end 23.0 yen), a consolidated dividend payout ratio of 45.1%, following 26.0 yen in FY2024. The company expects to pay 46 yen per share in FY2026 in line with its dividend payout ratio policy of around 40% (payout ratio 40.0%) and will maintain a dividend policy of at least 46 yen from FY2027 onward. Keikyu also plans to acquire 30 billion yen in share buybacks in FY2026, partially toward a return of gains from real estate sales in advance of the formation of a REIT and partially to optimize its capital structure, after executing share buybacks of 10.0 billion yen in FY2025. Treasury shares will be used for growth-oriented M&A and incentive programs, including stock-based compensation, and a portion of the acquired treasury shares will be cancelled to enhance shareholder returns and improve capital efficiency.

Medium-Term Plan and Topics

Keikyu describes itself as on track to achieve the FY2026 targets in the final year of the 20th Integrated Management Plan. Operating profit was 35.6 billion yen in FY2024 and 33.5 billion yen in FY2025 against a FY2026 target of 45.0 billion yen; ROE was 6.7% and 7.2% against a FY2026 target of 8.0%, with the company aiming to sustain ROE of 8% or more and 10% or more over the long term. The net interest-bearing debt/EBITDA ratio was 6.1x in FY2024 and 7.0x in FY2025, with a FY2026 target of below 7x, and the equity-to-asset ratio was 35.7% and 34.4%, with the balance sheet managed to maintain a medium- to long-term equity ratio of 25%–30% while utilizing leverage and maintaining an A credit rating. The company recognizes its cost of equity is 6-7% based on a comprehensive assessment that reflects investor dialogue.

In real estate, Keikyu is considering the securitization of all real estate owned by the Group in principle and aims to begin private REIT operations in the second half of FY2026. In preparation, it executed a capital and business alliance in October 2025 with Sumitomo Mitsui Trust Bank, Limited and Sumitomo Mitsui Trust Real Estate Investment Management Co., Ltd., and Keikyu Asset Management Co., Ltd. changed its name to Keikyu SMTB Asset Management Co., Ltd. The private REIT targets approximately 100 billion yen in assets over five years, including offices, rental residential properties and hotels, and the company is reviewing asset sales to execute over 150.0 billion yen during the five-year period from FY2025 to FY2029. FY2025 real estate securitization sales, comprising the Shinagawa Station land for widening national road, Prime Nexus (3 properties), office buildings (2 properties) and the Keikyu Tsurumi-Ichiba dormitory, generated proceeds of approximately 25.0 billion yen in total.

Other initiatives to enhance corporate value include the transfer of all shares in six Keikyu Taxi Group companies, including Keikyu Kotsu Co., Ltd., to newmo, Inc. as of March 31, 2026; the transition to next-generation railway operations, with the Smart Support System installed at all 42 stations targeted in FY2025 and platform doors installed at 4 stations in FY2025 (cumulative total 21 stations) with plans to install at 20 stations between FY2026 and FY2028; and a collaboration between Keikyu Store and Patience Capital Group in the supermarket business launched in March 2026. Cash allocation for the five years from FY2025 to FY2029 assumes approximately 300 billion yen of operating cash flow and approximately 200 billion yen from securitization associated with the real estate strategy and other asset sales on the cash-in side, against approximately 510 billion yen of growth investments, approximately 320 billion yen of investment in the Takanawa 3-Chome development and approximately 160 billion yen of maintenance and renewal investment.

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.