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 a new 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 this Medium-term Management Plan, we will make focused investments, which may temporarily slow profit growth due to increased depreciation and amortization. However, we will continue to grow our top line through steady execution of each strategy. Our target for operating income in FY2027 is 36.0 billion yen or more. Furthermore, by strengthening the link between business strategy and financial strategy, we aim to achieve both growth and financial soundness. Specifically, we target a ratio of net interest-bearing debt to EBITDA in the 7 times range and an ROE level of around 7% in FY2027.

Currently, we recognize that we have made a good start, with an improved credit rating and fiscal 2025 operating profit projected to reach a record high. This is driven by factors including the Osaka/Kansai Expo effect, expanding inbound demand, and enhanced profitability in our real estate business. Moving forward, we will continue to closely monitor the impact of external environmental changes, such as rising prices, on our financial position and performance. Based on a comprehensive assessment of the overall business environment, including the progress of each strategy and investment, we aim to achieve further improvement of the target figures in our Medium-term Management Plan.