East Japan Railway Company (9020) Q2 2026 earnings summary

Executive summary

• Consolidated operating revenues and operating income for the first half significantly exceeded initial plans, driven by strong railway usage and higher sales at station stores, with no major natural disasters impacting results.

• Full-year earnings forecasts for operating revenues, EBITDA, operating income, and profit attributable to owners were all revised upward, with operating income projected at JPY 405 billion, up JPY 18 billion from prior guidance.

• Annual dividend forecast increased to JPY 70 per share, with a payout ratio of 33.3%, reflecting improved earnings and a policy to gradually raise payout ratios.

• Management is advancing the "To the Next Stage 2034" strategy, focusing on safety, digital transformation, and dual access management for mobility and lifestyle solutions.

• Comprehensive income increased 32.1% year-over-year to JPY 170,177 million.

Financial highlights

• Q2 FY2026.3 operating revenues rose to JPY 1,463.0 billion (+4.9% YoY); operating income was JPY 231.4 billion (-1.7% YoY).

• Profit attributable to owners increased to JPY 147.2 billion (+5.3% YoY), mainly from gains on investment securities sales.

• All segments posted revenue growth; transportation and retail/services saw income gains, while real estate & hotels income declined due to lower real estate sales.

• Extraordinary gains rose sharply due to increased sales of investments in securities.

• Personnel expenses rose by JPY 19 billion, and maintenance expenses increased by JPY 13.5 billion due to front-loaded repair costs.

Outlook and guidance

• Full-year operating revenues forecast revised to JPY 3,058.0 billion (+JPY 35.0 billion from prior forecast), with operating income projected to rise 7.5% to JPY 405.0 billion and profit attributable to owners expected to increase 5.7% to JPY 237.0 billion.

• ROE expected at 8.1% (+0.4%), ROA at 3.9% (+0.2%).

• Dividend payout ratio to gradually rise to 40% by FY2028.3 as growth investments stabilize.

• Free cash flow is currently negative due to growth investments but expected to turn positive from FY 2026.

• Committed to reducing cross-shareholdings by 30% (market value ratio) by 2031.