Kyushu Railway Company · TSE:9142
Kyushu Railway — H1 FY24.3 Earnings Presentation
42 slides from Kyushu Railway's earnings presentation, Nov 8, 2023
Slide 1: FY24.3 Semi-Annual Investors Meeting
FY24.3 Semi-Annual Investors Meeting November 8, 2023
Slide 2: Contents
Contents Ⅰ Financial Results for the First Six-Months of FY24.3 4 Ⅱ Full-Year Performance Forecasts and Dividend Forecasts for 8 FY24.3 Ⅲ Status of Segments 13 Ⅳ Progress on the Medium-Term Business Plan 25 Ⅴ Efforts to Realize Management Conscious of the Cost of 33 Capital and the Stock Price 2
Slide 3: Highlights
Highlights Financial results for the Owing to a gradual recovery of demand in each segment, consolidated first six operating revenues, operating income, ordinary income, and net income months of attributable to owners of the parent all increased year on year. FY24.3 In Q2, we made steady progres
Slide 4: Financial Results for the First Six-Months of FY24.3
Ⅰ Financial Results for the First Six-Months of FY24.3 4
Slide 5: Consolidated Financial Highlights for the Six-Month Period Ended September 30, 2023
Consolidated Financial Highlights for the Six-Month Period Ended September 30, 2023 （¥bil） 6 months ended 6 months ended September, 30 September, 30 YoY 2022 2023 Operating revenue・income Operating revenue 170.1 190.7 20.5 112.1% The sale of properties decreased, but revenues and Operating income 11
Slide 6: Consolidated Results for the First Six Months of FY24.3 (by Segment)
Consolidated Results for the First Six Months of FY24.3 (by Segment) （¥bil） 6 months ended 6 months ended September, 30 September, 30 YoY Major factors 2022 2023 Operating revenue 170.1 190.7 20.5 112.1% Transportation 63.4 79.3 15.9 125.1% Railway Business (non-consolidated) 62.8 77.9 15.1 124.1% I
Slide 7: Non-Consolidated Results for the First Six Months of FY24.3
Non-Consolidated Results for the First Six Months of FY24.3 (¥bil) 6 months ended 6 months ended YoY Major Factors September, 30 2022 September, 30 2023 Operating revenue 94.2 106.2 12.0 112.8% Railway transportation revenues 55.4 70.4 14.9 127.1% Moderate recovery in demand Shinkansen 18.7 28.0 9.2
Slide 8: Full-Year Performance Forecasts and Dividend Forecasts for FY24.3
Ⅱ Full-Year Performance Forecasts and Dividend Forecasts for FY24.3 8
Slide 9: Consolidated Financial Forecast Highlights for FY24.3
Consolidated Financial Forecast Highlights for FY24.3 （\bil） Results Forecasts Operating revenue YoY FY23.3 FY24.3 Even though we expect a decrease in the sale of properties, we anticipate a rise in Operating revenue 383.2 417.0 33.7 108.8% revenues owing to such factors as the gradual recovery of d
Slide 10: Consolidated Financial Forecasts for FY24.3 (by segment)
Consolidated Financial Forecasts for FY24.3 (by segment) (¥bil) Results Forecasts YoY Major factors FY23.3 FY24.3 Operating revenue 383.2 417.0 33.7 108.8% Transportation 138.3 160.7 22.3 116.2% Increase due to moderate recovery in demand Railway Business (non-consolidated) 136.5 156.9 20.3 114.9% R
Slide 11: Non-consolidated Financial Forecasts for FY24.3
Non-consolidated Financial Forecasts for FY24.3 (¥bil) Results Forecasts YoY Major factors FY23.3 FY24.3 Operating revenue 211.6 228.6 16.9 108.0% Railway transportation 121.4 142.8 21.3 117.6% Increase due to moderate recovery in demand revenues Shinkansen 44.0 53.9 9.8 122.4% Conventional Lines 77
Slide 12: FY24.3 Dividend Forecasts
FY24.3 Dividend Forecasts Shareholder return policy JR Kyushu places importance on the stable provision of return to shareholders over the long term. Over the period to FY25.3, we will aim for a consolidated dividend payout ratio of 35%, with a minimum dividend per share of ¥93.0. We will flexibly
Slide 13: Status of Segments
Il Status of Segments 13
Slide 14: Transportation Segment
Transportation Segment Railway transportation revenues continued to recovery gradually, in line with expectations. 【Results】 （¥bil） 【Forecasts】 （¥bil） 6 months 6 months ended ended FY23.3 FY24.3 September, September, YoY YoY Results Forecasts 30 2022 30 2023 Operating revenue 63.4 79.3 15.9 125.1%
Slide 15: Status of Inbound Measures in the Railway Business
Status of Inbound Measures in the Railway Business In Q2, inbound revenue was essentially on a par with Q1. We revised rail pass prices in October. Inbound revenue (approximate) Demand for JR-KYUSHU RAIL PASS 25.0 180% 1H FY19.3 1H FY24.3 JR-KYUSHU RAIL PASS Others Vs. FY19.3 160% Results Results
Slide 16: Changing the Station System in the Railway Business
Changing the Station System in the Railway Business To improve the efficiency of the station system, on October 1, we moved to direct management of station operations that had been outsourced to a subsidiary. Issues prior to switching Projected impact on performance (annual) As some operations cou
Slide 17: Subcommittee on Rail Fares and Charges (MLIT)
Subcommittee on Rail Fares and Charges (Ministry of Land, Infrastructure, Transport and Tourism) Interim summary of the subcommittee Direction for Review of Total Cost Calculation Method (July 2022) (June 2023: Selected Key Issues) (1) Immediate measures • Introduction of accelerated depreciation ex
Slide 18: Railway business (transportation data)
Railway business (transportation data) Railway Transportation Revenues (¥bil) 6 months ended 6 months ended YoY Major Factors September, 30 2022 September, 30 2023 Total 55.4 70.4 14.9 127.1% Commuter pass 14.8 15.4 0.5 104.0% Non-commuter pass 40.5 54.9 14.4 135.5% Cargo 0.0 0.0 0.0 121.9% Shinkans
Slide 19: Real Estate and Hotels Segment: Real estate leasing business
Real Estate and Hotels Segment: Real estate leasing business The real estate leasing business performed steadily, at the anticipated level. 【Results】 【Forecasts】 （¥bil） （¥bil） 6 months ended 6 months ended FY23.3 FY24.3 September, 30 September, 30 YoY YoY Results Forecasts 2022 2023 Operating reve
Slide 20: Real Estate and Hotels Segment: Real Estate Sales Business
Real Estate and Hotels Segment: Real Estate Sales Business Condominium sales were up year on year. In the period under review, we sold a rental apartment building, whereas we sold an office building in the same period of the previous fiscal year. As a result, the sale of properties was down year
Slide 21: Condominium Sales Business
Condominium Sales Business More than 30 years after launching the business, the MJR brand has established a solid position and track record in Kyushu. We will continue to ensure a stable supply, and aim to increase the number of residents along our train lines and invigorate local communities. A
Slide 22: Real Estate and Hotels Segment: Hotel Business
Real Estate and Hotels Segment: Hotel Business Due to a further increase in accommodation demand, ADR reached the ¥19,000 level. The percentage of inbound travelers rose from Q1 as a percentage of total room sales. 【Results】 【Forecasts】 （¥bil） （¥bil） 6 months ended 6 months ended FY23.3 FY24.3 S
Slide 23: Retail and Restaurant segment
Retail and Restaurant segment The recovery trend continued, buoyed by a further recovery in foot traffic in Q2. Sales both at stores in areas surrounding stations and at suburban stores were favorable, pushing up revenue and income. 【Results】 【Forecasts】 （¥bil） （¥bil） 6 months ended 6 months end
Slide 24: Construction Segment, Business Services Segment
Construction Segment, Business Services Segment Construction Segment The order backlog is building up, and we aim to win more orders and steadily progress on construction projects. 【Results】 【Forecasts】 （¥bil） （¥bil） 6 months ended 6 months ended FY23.3 FY24.3 September, 30 September, 30 YoY YoY R
Slide 25: Progress of the Medium-Term Business Plan
Ⅳ Progress of the Medium-Term Business Plan 25
Slide 26: JR Kyushu Group Medium-Term Business Plan 2022-2024
JR Kyushu Group Medium-Term Business Plan 2022-2024 Three key strategies of the medium-term business plan 2030 Long-Term Vision Robustly promoting three key strategies during the stage for returning the We will contribute to the sustainable development of Company to a growth track Kyushu through cit
Slide 27: Key strategy 1: Completing Business Structural Reforms: Railway Business
Key strategy❶ Completing Business Structural Reforms: Railway Business Through The Future Railway Project Promoting operational efficiency through collaboration with other companies and the use of new technologies Lost-and-found inquiry service using AI and chat Development of multifunctional insp
Slide 28: Key strategy 2: City-Building in the Western Kyushu Area
Key strategy❷ Creating a model for building cities that promote well-being: City-Building in the Western Kyushu Area Usage is steadily increasing on the Nishi-Kyushu Shinkansen one year after the start of service in September 2022 By opening the New Nagasaki Station Building (scheduled for Novem
Slide 29: Key strategy 2: City-Building in the Fukuoka Area
Key strategy❷ Creating a model for building cities that promote well-being: City-Building in the Fukuoka Area In the city of Fukuoka, which has the largest population growth rate among ordinance-designated cities, we are promoting urban development in a wide range of areas, including not only real
Slide 30: Disclosing profitability for train lines
Key strategy❷ Creating a model for building cities that promote well-being: Disclosing profitability for train lines Disclosing profitability for train lines with an average of less than 2,000 passengers per day Of these, in regard to those lines on which the average number of passengers in FY20
Slide 31: The BRT on the Hitahikosan Line
Key strategy❷ Creating a model for building cities that promote well-being: The BRT on the Hitahikosan Line On August 28, 2023, Hitahikosan Line BRT Hikoboshi Line service commenced on the Soeda–Yoake/Hita segment, which a disaster made impassible in July 2017. The number of passengers has been
Slide 32: Human Resource Strategy: Increasing Employee Engagement
Human Resource Strategy｜Increasing Employee Engagement Since FY23.3, the management team has held an “opinion exchange event for all employees” in response to a decline in employee satisfaction due to concerns and dissatisfaction regarding salaries and bonuses and the lack of communication in the
Slide 33: Efforts to Realize Management Conscious of the Cost of Capital and the Stock Price
Ⅴ Efforts to Realize Management Conscious of the Cost of Capital and the Stock Price 33
Slide 34: Efforts to Realize Management Conscious of the Cost of Capital and the Stock Price
Efforts to Realize Management Conscious of the Cost of Capital and the Stock Price ・We recognize that improving return on capital is an important Recognition management issue. of the - In addition to operating revenue, operating income, and EBITDA, the current medium-term business current plan indic
Slide 35: APPENDIX
APPENDIX 35
Slide 36: Balance Sheet and Cash Flow Statement
Balance Sheet and Cash Flow Statement Balance Sheet （¥bil） 6 months ended Results September, 30 YoY Major factors FY23.3 2023 Total Assets 996.6 1,011.4 14.7 Cash and time deposits 37.2 40.4 3.1 Securities 15.0 21.5 6.4 Property, plant and equipment 632.2 649.5 17.3 Increase due to acquisition of re
Slide 37: EBITDA by Segment
EBITDA by Segment Transportation Real Estate and Hotels （¥bil） （¥bil） EBITDA EBITDA margin EBITDA EBITDA margin 40 40% 40 60% 35.6 36.2 34.3 30 29.5 30% 31.8 31.9 30.5 30 50% 20 20% 13.1 22.2 10 18.9% 17.0% 10% 20 40% 9.5% 0 0% 39.5% FY19.3 FY20.3 FY21.3 FY22.3 FY22.3 FY23.3 (10) -10% 10 30% 33.7% (
Slide 38: Trends in the Railway Business
Trends in the Railway Business Railway transportation revenues (Shinkansen), passenger Internet train reservation services: load factor on the Kyushu Shinkansen (Hakata－Kumamoto) Number of reservations, sales （¥bil） （¥bil） Shinkansen Passanger load factor(right) （10,000 rersevations） 80 60% 600 40 5
Slide 39: Trends in the Real Estate and Hotel Businesses
Trends in the Real Estate and Hotel Businesses Station building tenant sales Hotel occupancy rates and average unit prices (¥bil) 250 Other main station buildings JR Hakata City (¥) ADR(left) Occupancy Rates(right) 222.1 16,000 14,624 100% 203.0 202.6 13,877 200 184.6 13,103 11,766 11,370 80% 111.0
Slide 40: Overview of Major Development Pipelines
Overview of Major Development Pipelines Floor space/Lot Name Location Schedule Notes (Uses, etc.) area/Units/Rooms March 2022: Opening under elevated ・Integrated development incorporating commercial facilities, hotels, railway tracks Nagasaki Station area offices, etc. Nagasaki City, November 2023:
Slide 41: Railway Business Expenses
Railway Business Expenses Leasing and other fees for the Shinkansen facility We lease facilities from the Japan Railway Construction, Transport and Technology Agency, which owns the Shinkansen facilities, and pay certain Leasing fees, etc., are based on the average benefit over the first 30 years
Slide 42: Forward-Looking Statements
Forward-Looking Statements These materials contain forward-looking statements concerning business forecasts, targets, etc. of the JR Kyushu Group. These statements are judgments made by the Company based on information, projections, and assumptions available at the time of the materials’ creation. A
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