Message from the Chief Financial Officer

I assumed the role of CFO in April 2026. Drawing on my practical experience in finance and accounting, and group corporate management, I have spearheaded various transformations across diverse fields—including railways, digital transformation, human resources, and sustainability—while maintaining safe and secure transportation as our core principle. Leveraging this experience, I will actively pursue both financial and non-financial information in a transparent manner and engage in dialogue with stakeholders. This approach will support the sustainable growth and enhanced corporate value of our group.

Our Group is promoting the Medium-term Management Plan, " NANKAI Group Medium-term Management Plan 2025-2027" targeting FY2025 through FY2027. During this plan, we will focus our investments on both the real estate and public transportation businesses to achieve an “Accelerated expansion of the real estate business” and a “Transformation into a public transportation business that paves the way for the future,” further developing our core businesses and significantly increasing corporate value. Accordingly, we plan to invest up to 360 billion yen, the largest amount in our history.

To accelerate these investments, we will secure funding from operating cash flow, borrowing, and corporate bonds, but also through asset sales and the reduction of cross-shareholdings. We will optimize cash allocation while considering the perspectives of ensuring fundamental financial soundness and improving capital efficiency.

In this Medium-term Management Plan, our shareholder return policy is to gradually increase the consolidated dividend payout ratio with a target of around 30% by FY2027, while maintaining a policy of stable dividends, and to flexibly acquire treasury shares as necessary. Based on this policy, we purchased treasury shares from July 2025 to January 2026, with a total limit of 12 billion yen.

Furthermore, to improve corporate value in the medium to long term, we are implementing measures to improve both ROE and PER. To improve ROE, we are focusing on three key areas: creating excess profits, improving asset efficiency, and optimal capital structure. To improve PER, we are concentrating on three pillars: growth strategies, ESG management, and IR activities. Based on these principles, we are advancing various initiatives to realize management of the company with an awareness of capital costs and stock prices, including ROIC-based management and business portfolio management.

In the first year of the Medium-term Management Plan, FY2025, we recognize that we made a steady start, with operating revenue and profits at all levels reaching record highs. This was driven by factors such as the positive impact of EXPO 2025 and our ability to capture inbound demand. Furthermore, in light of a business environment that has improved beyond our initial assumptions and our enhanced earnings capacity, we have upwardly revised the numerical targets of the Medium-term Management Plan. At the same time, through the steady execution of our strategies, we aim to further accumulate profits, particularly in our core businesses.

Looking ahead, the external environment remains uncertain, with rising geopolitical risks, deterioration in Japan–China relations, and increasing cost pressures from inflation and interest rates, creating a somewhat challenging backdrop for the industry as a whole. Nevertheless, under the new NANKAI Group management structure, we will continue to pursue both profit growth and improved capital efficiency, with the aim of achieving our updated FY2027 targets of operating income of 42.0 billion yen or more, ROE of 7% or more, and a ratio of net interest-bearing debt to EBITDA in the 7 times range.