Keihan Holdings (9045): FY2025 Results Summary — Record Profit on Expo 2025, Fare Revision and Land Sales

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

Note: Keihan Holdings labels the fiscal year ended March 31, 2026 as “FY2026”; the text, tables and segment data below keep the company’s own labels as shown in the presentation. Keihan Holdings Co., Ltd. posted increases in both revenue and profits for FY2026 (fiscal year ended March 31, 2026), with operating revenue of 332,471 million yen (up 18,925 million yen, or 6.0%) and operating profit of 49,152 million yen (up 7,081 million yen, or 16.8%). Profit attributable to owners of parent came to 33,581 million yen, up 5,315 million yen or 18.8%. The company cites the effect of Expo 2025 Osaka, Kansai, Japan in the Leisure & Service business and the Transportation business, the fare revision implemented by Keihan Electric Railway Co., Ltd., and the sale of lots for business use in “Keihanna Science City” in the Real estate business. In the President’s message the company states that, having overcome the COVID-19 pandemic, it has “delivered record-high profits for three consecutive years,” with FY2026 marking the third year.

Consolidated Results (Full-Year Actual)

Ordinary profit rose 6,025 million yen (14.7%) to 46,931 million yen, while EBITDA (defined in the materials as operating profit plus depreciation) increased 8,670 million yen to 73,284 million yen. Non-operating expenses rose 1,625 million yen, with interest expenses up 1,323 million yen. Extraordinary income of 3,982 million yen included contribution received for construction of +844 million yen and gain on sale of non-current assets of +673 million yen, while extraordinary losses of 3,464 million yen included a loss on tax purpose reduction entry of non-current assets of +660 million yen. Results exceeded the company’s FY2026 forecasts for operating revenue (325,400 million yen), operating profit (46,200 million yen), ordinary profit (43,900 million yen) and profit attributable to owners of parent (32,600 million yen).

Item (Millions of yen)	FY2026 results	FY2025 results	Change	FY2026 forecasts
Operating revenue	332,471	313,546	18,925 (6.0%)	325,400
Operating profit	49,152	42,071	7,081 (16.8%)	46,200
Ordinary profit	46,931	40,905	6,025 (14.7%)	43,900
Profit attributable to owners of parent	33,581	28,266	5,315 (18.8%)	32,600
Depreciation	24,132	22,543	1,588	24,300
EBITDA	73,284	64,614	8,670	70,500
Net interest income	-2,521	-1,654	-867	-2,500

On the balance sheet, total assets grew 49,685 million yen to 909,545 million yen and net assets rose 35,055 million yen to 349,563 million yen, with retained earnings up 23,976 million yen, treasury shares up 19,120 million yen and capital surplus down 15,930 million yen. The equity capital ratio was 37.5% (+1.8 pts). Interest-bearing debt stood at 382,786 million yen and net interest-bearing debt at 368,026 million yen, giving a net interest-bearing debt/EBITDA ratio of 5.0 times versus 5.5 times a year earlier. ROE was 10.4%, up 1.1 pts. Cash flows from operating activities were 40,340 million yen, investing activities -42,986 million yen and financing activities 3,568 million yen, the latter including redemption of bonds of -20,000 million yen and purchase of treasury shares of +15,213 million yen.

Segment Results

Real estate is the largest segment by both revenue and profit, accounting for 41.6% of segment operating revenue and 52.3% of segment operating profit; Transportation accounts for 27.7% of revenue and 28.1% of profit. Every segment except Retail distribution and Adjustments increased operating profit. The Group comprises 39 consolidated subsidiaries (no change year on year) and 2 equity-method affiliates (no change year on year).

Segment (Millions of yen)	Operating revenue FY2026	Operating revenue FY2025	Operating profit FY2026	Operating profit FY2025
Transportation	97,522	91,381	13,977	12,323
Real estate	146,237	139,094	26,062	22,342
Retail distribution	57,985	57,059	2,818	2,846
Leisure & Service	44,491	39,978	6,759	4,916
Other businesses	5,409	5,167	175	68
Adjustments	-19,173	-19,135	-640	-426

In Transportation, the Railway business saw increases in both revenue and profits due to factors such as the implementation of a fare revision at Keihan Electric Railway Co., Ltd. and the effect of Expo 2025 (Osaka, Kansai, Japan); the Bus business also grew, helped by the operation of buses transporting visitors to Expo 2025. Railway operating revenue was 81,402 million yen (up 7.2%) with operating profit of 12,321 million yen (up 14.0%), while Bus operating revenue was 24,398 million yen (up 2.6%) with operating profit of 1,619 million yen (up 9.3%).

Keihan Electric Railway	FY2026 results	FY2025 results	Change	Change (%)
Passenger transportation revenue (Millions of yen)	53,163	49,478	3,684	7.4
Non-commuter passes	36,128	33,481	2,647	7.9
Commuter passes	17,034	15,997	1,036	6.5
Number of passengers (Thousands of people)	271,902	266,321	5,580	2.1
Non-commuter passes	132,529	131,049	1,480	1.1
Commuter passes	139,373	135,272	4,100	3.0

In Real estate, the Real estate sales business increased revenue and profits mainly due to the sale of lots for business use in “Keihanna Science City” and the hotel condominium “Rihga Royal Resort Okinawa Chatan,” recording operating revenue of 94,333 million yen and operating profit of 12,976 million yen (up 31.3%). The Real estate leasing business grew on contributions from “Station Hill Hirakata,” which opened in the previous fiscal year, with operating revenue of 30,758 million yen and operating profit of 11,480 million yen. In Retail distribution, the Department store business saw decreases in both revenue and profits due to factors such as a reactionary drop from the strong inbound sales in the previous fiscal year, posting operating revenue of 23,349 million yen and an operating loss of -121 million yen; the Shopping mall management business benefited from “Hirakata Mall,” which opened in September 2024, and the Store business from “THE STORE Hirakata Mall.” In Leisure & Service, the Hotel business grew on the effect of Expo 2025 and strong inbound tourism demand, with operating revenue of 40,408 million yen (up 11.7%) and operating profit of 6,439 million yen (up 38.3%); occupancy at Hotel Keihan was 84.5% (+2.7 pts) and at Keihan Hotels & Resorts 78.0% (-0.1 pts). The Leisure business was supported by the commissioned operation of the hydrogen fuel cell ship “Mahoroba” in conjunction with Expo 2025.

FY2027 Forecast

For FY2027, the company forecasts declines in both revenue and profits. Although revenue increases due to the fare revision by Keihan Electric Railway, the company points to a reactionary drop from the sale of lots for business use in the Real estate business and from the effect of Expo 2025 (Osaka, Kansai, Japan) across each business in the previous fiscal year. EBITDA is forecast at 69,000 million yen (-5.8%), interest-bearing debt at 440,000 million yen (+14.9%), the net interest-bearing debt/EBITDA ratio at 6.2 times and ROE at 8.3%. Consolidated capital expenditure is planned at 73,400 million yen versus 48,620 million yen in FY2026.

Item (Millions of yen)	FY2027 forecasts	FY2026 results	Change	Change (%)
Operating revenue	321,800	332,471	-10,671	-3.2%
Operating profit	42,400	49,152	-6,752	-13.7%
Ordinary profit	38,100	46,931	-8,831	-18.8%
Profit attributable to owners of parent	29,000	33,581	-4,581	-13.6%
Depreciation	26,600	24,132	2,467	10.2%
EBITDA	69,000	73,284	-4,284	-5.8%
Interest-bearing debt	440,000	382,786	57,213	14.9%
ROE	8.3%	10.4%	-2.1%	—

Segment (Millions of yen)	Operating revenue FY2027 forecasts	Operating revenue FY2026 results	Operating profit FY2027 forecasts	Operating profit FY2026 results
Transportation	99,900	97,522	13,500	13,977
Real estate	132,400	146,237	20,100	26,062
Retail distribution	58,600	57,985	2,800	2,818
Leisure & Service	45,600	44,491	6,700	6,759
Other businesses	4,500	5,409	200	175
Adjustments	-19,200	-19,173	-900	-640

By segment, the company attributes the Transportation decline in profits mainly to an increase in depreciation associated with capital expenditure such as the manufacture of new rolling stock, despite higher revenue from the fare revision. Real estate declines primarily due to a reactionary drop from the sale of lots for business use and hotel condominiums in “Keihanna Science City.” Retail distribution reflects the impact of tenant replacement and increases in various expenses, and Leisure & Service reflects increases in various expenses such as renovation. Keihan Electric Railway’s passenger transportation revenue is forecast at 55,970 million yen (up 5.3%), while the number of passengers is forecast at 268,658 thousand people (down 1.2%).

Shareholder Returns

The company’s shareholder return policy is to aim to increase dividends through sustainable profit growth, with a consolidated dividend payout ratio of approximately 30% based on the business performance in each fiscal year, and to flexibly conduct share buybacks while considering financial soundness, capital efficiency and other factors. Based on this policy, the annual dividend payout for FY2027 is forecast to be 86 yen per share.

Item	FY2025	FY2026	FY2027 (forecast)
Annual dividend (yen)	40	100	86
Dividend payout ratio	14.9%	30.0%	29.9%

Medium-Term Plan and Long-Term Strategy

Alongside the results, Keihan Holdings announced an update to its long-term management strategy and the formulation of a new medium-term management plan, “Refining Our True Value 2028” (FY2027–FY2029), positioned as a “run-up phase focused on refining our businesses” toward profit growth in FY2031. The quantitative targets for FY2031 have been raised to an ROE of the 10% level (previous target: 8% level) and profit attributable to owners of parent of 38 bn yen or more (previous target: 30 bn yen or more), with an interim FY2029 plan of 30,000 or more and an ROE of the 8.5% level. The company also targets ROA (ratio of operating profit to total assets) at around the 5% level; FY2026 segment ROA was 5.2% for Transportation, 4.9% for Real estate, 8.7% for Retail distribution and 15.7% for Leisure and service.

Cash allocation for FY2027–FY2031 assumes operating CF of ¥380 bn and sales of fixed assets of ¥55 bn+ (including sale of rental assets of ¥45 bn+) against investment of ¥360 bn, of which growth investment is ¥250 bn (including acquisition of new rental properties of ¥100 bn) and maintenance and renewal investment is ¥110 bn. Shareholder returns are set at ¥70 bn+, based on a dividend with a 30% payout ratio plus flexible share buybacks, described as strengthening shareholder returns compared with the previous medium-term plan. The company targets an equity ratio of around 35%, equity of approximately ¥400 bn and an interest-bearing debt balance of ¥500 bn or less. Major development projects along the railway lines include the extension of the Nakanoshima Line, the Sanjo Station Area Project, the Kyoto Station Southeast Area Project and the Kyoto Tower renovation.

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.