9025 Konoike Transport Co., Ltd.
May 2025
Q&A Highlights, Financial Results Briefing for the Fiscal Year Ended March 2025 and Medium-Term Business Plan 2027 Briefing
This Q&A session is a summary of the main questions asked by attendees at the analyst and institutional investor meetings. Certain sections have been edited to facilitate understanding.
Airport-Related
Q1) I understand you have plans to expand takeoff and landing slots at Kansai and Narita airports. Do you see room for growth in your airport operations under the current business model? Also, how do you view the potential for expanding operations at regional airports, given that some regional airports have begun sharing ground handling across different airlines.
A1) Our main operations are currently centered at Narita, Kansai, and Haneda airports, and we believe there is ample growth potential as expansion and slot increases move forward. To capture that growth, however, we must ensure proper staffing and build a structure capable of meeting demand. We and other industry players are actively hiring foreign nationals under the Specified Skilled Worker system, and we expect that trend to continue. We also intend to explore our options for regional airports, including shared services, particularly at Naha Airport in coordination with airline partners. However, we will take a cautious approach toward entering new regional airports, as many have limited daily flights and existing local ground handling companies face staffing challenges.
Q2) What assumptions underlie your Airport-Related earnings forecast for the current fiscal year?
A2) Flight volume at Haneda and Narita has already exceeded pre-COVID-19 levels. And while we expect overall traffic to return to 100% at Kansai, we project our handling volume to recover to around 80%, taking into account the proportion of flights to and from China within our contracted services. We aim to increase revenue under these conditions by taking active measures to capture ground handling demand across all airports and continuing to revise unit prices. Our earnings forecast also reflects higher personnel-related costs, including an increase in headcount from approximately 4,350 at the end of the previous fiscal year to around 4,600 by the end of the current year, as well as training costs and temporary double staffing.
Q3) The forecast for Airport-Related profit is flat, the medium-term plan projects an increase of
approximately 1.6 billion yen over three years. Airport-Related seems to drive profit within the overall plan. Does this mean you are building the foundation this fiscal year and expect returns from the second year onward?
A3) As mentioned earlier, we plan to increase employees from approximately 4,350 to 4,600 this fiscal year and expect to incur costs related to training and temporary double staffing.
However, we expect training to improve efficiency, for example by enabling individual employees to serve multiple airlines. We expect to achieve growth in the medium term by fully preparing our response structure and adding personnel in line with airport capacity expansion.
Business in India
Q4) How much of the profit target figure on page 9 is related to India? Also, could you share your outlook for the recently acquired Steel-Related company?
A4) The profit target shown in the materials includes profit from overseas operations across all segments, which means figures include India-related businesses under Steel-Related. While we cannot disclose a detailed breakdown, JKTI, which operates a rail transport business, currently accounts for the majority. To this end, we expect the newly acquired FSNL to grow beyond that level going forward. We confirmed at a recent site visit that FSNL conducts the same business that we operate in Japan and we believe we can improve productivity significantly by applying our operational expertise. FSNL also expects this from us. With steady execution, we see strong potential for results. However, following privatization, we anticipate some front-loaded costs due to necessary capital investment and hiring. But we remain confident in the medium- to longterm growth potential of the company.
Overseas Business
Q5) Could you comment on your certainty of achieving the profit targets for the Overseas Business? How much of the 3.3 billion profit target for fiscal 2028 can be considered reasonably certain, given the country risks associated with overseas operations for Japanese logistics companies and the mixed track record of industry peers? Also, what is your expected breakdown of Japanese vs. non-Japanese customers?
A5) Japanese forwarders have traditionally built their overseas business by serving Japanese manufacturers, focusing on capturing export demand from Japan. As you noted, expanding business overseas in a challenging market environment has been difficult. However, the North and Central American business, the CTO and AFTO business in India, and FSNL, all of which are listed on page 9 of the materials do business with local companies. We believe that by continuing to advance these businesses, we can fully achieve our profit target and aim to make it a reliable outcome.