FY2027 Q1 delivered higher revenue and profit, putting operating profit ahead of the full-year plan.

FY2027 Q1 operating revenue was ¥156,292 million, operating profit was ¥21,017 million, ordinary profit was ¥20,712 million, and quarterly net income attributable to owners of the parent was ¥14,193 million. Compared with operating revenue of ¥148,613 million and operating profit of ¥19,003 million in the same period of the previous year, operating revenue rose 5.2% and operating profit rose 10.6%, indicating improvement in both the top line and core operating profit. However, net income growth was limited to 1.5%, and it remains necessary to confirm how much of the improvement at the operating level will remain after taxes and non-operating income and expenses.

The full-year forecasts are operating revenue of ¥673,000 million, operating profit of ¥72,000 million, ordinary profit of ¥63,500 million, and net income attributable to owners of the parent of ¥56,000 million. No revisions were made to the forecasts as of Q1. Q1 progress rates were 23.2% for operating revenue, 29.2% for operating profit, 32.6% for ordinary profit, and 25.3% for net income. Operating revenue was slightly below a simple 25% allocation, while operating profit and ordinary profit were above it, putting earnings ahead of plan. However, rail and tourism-related businesses are affected by seasonality, including summer holidays, autumn foliage, and the year-end/New Year period, so it is too early to judge whether the full-year plan will be exceeded based solely on Q1 outperformance.

FY2026 full-year operating profit was ¥71,861 million and ordinary profit was ¥68,831 million. Accordingly, the FY2027 full-year forecast calls for operating profit to rise by only ¥139 million, or 0.2%, while ordinary profit is expected to decline by ¥5,331 million, or 7.7%. Although Q1 operating profit growth could support the full-year plan, the possibility remains that higher non-operating expenses, such as interest payments, will constrain ordinary profit. In H1, the gap between operating profit and ordinary profit and net income will also warrant attention.

The main text of the earnings summary does not provide a detailed breakdown of the specific factors behind Q1 changes, instead referring readers to supplementary explanatory materials. At the next earnings release, it will therefore be necessary to confirm in H1 cumulative figures whether the Q1 earnings growth was driven by higher passenger numbers, tourism and hotel demand, rental income, or improvement in the distribution business, as well as the extent of changes in personnel costs, repair expenses, and financial costs. A key point will be whether the operating margin can be maintained even if operating revenue progress remains below 25%, or whether higher costs become apparent from Q2 onward.