Nippon Express (9147) Q2 2025 earnings summary

Executive summary

• Revenue for Q2 FY2025 rose 1.8% year-over-year to ¥1,271.9 billion, mainly from the Simon Hegele acquisition, but logistics demand remained sluggish and profit attributable to owners fell 24.2% to ¥8.6 billion due to higher costs and foreign exchange losses.

• Operating income surged 50.7% to ¥28.7 billion, rebounding from prior-year impairment losses and increased land sales.

• Comprehensive income turned negative at ¥(5.2) billion, mainly due to adverse foreign exchange impacts.

• Japan segment profit increased, offsetting overseas softness, with air forwarding volume up but ocean forwarding volume down due to customer shift to BCOs.

Financial highlights

• Operating income increased by ¥9.6 billion year-over-year, with a ¥4 billion gain from land sales, and business profit reached ¥31.9 billion, up 25.7% year-over-year.

• Net profit for the period was ¥9.0 billion, down 22.2% year-over-year, mainly due to foreign exchange losses and higher taxes.

• Revenue and all profit metrics below business profit fell short of expectations, with business profit about ¥1 billion below forecast.

• Gross profit for the six months was ¥115.9 billion, up 9.3% year-over-year, with a gross margin of 9.1%.

• Cash and cash equivalents decreased by ¥57.6 billion to ¥193.7 billion compared to year-end 2024.

Outlook and guidance

• Full-year revenue forecast revised down to ¥2,600.0 billion (0.9% year-over-year growth); operating profit forecast cut to ¥70.0 billion (42.6% growth), and profit attributable to owners of parent to ¥40.0 billion (26.1% growth).

• Forecasts were revised downward due to high logistics costs, increased personnel expenses, and weaker international logistics demand amid U.S. tariff and Middle East uncertainties.

• Special loss from Second Career Support program not yet included; update expected mid-November.

• Recovery in international logistics demand is expected to be gradual, with cost controls and structural reforms underway, especially in Europe.

• Commitment to achieving 2026 interim targets: operating profit of at least JPY 100 billion and ROE of at least 8%.