Kobe Electric Railway Co.,Ltd.
9046・Prime Market・Land Transportation
Business
Kobe Electric Railway Co., Ltd. was founded in 1926 and is headquartered in Kita-ku, Kobe City. It is a regional railway company listed on the TSE Standard Market. The company operates a total of 69.6 kilometers of track across the Arima Line, Sanda Line, Ao Line, and Park Town Line, providing essential living infrastructure for residents along its lines in areas such as Kita-ku Kobe City, Sanda City, and Miki City. The group consists of the parent company, 7 subsidiaries, and 1 affiliated company. With the Transportation Business (railway, bus, and taxi) at its core, the group also operates the Land and Building Leasing Business (Real Estate Business), the Distribution Business (supermarkets, convenience stores, and food and beverage), and Others (childcare, health, construction, and facility management). The company employs a diversified management model closely tied to daily life, supporting the overall "lifestyle" of residents along its rail lines. Consolidated operating revenue for FY2026 (ending March 2026) was ¥23,347 million.
Business Model
The Railway Business stably generates passenger transportation revenue (¥9,641 million in FY2026 (ending March 2026)), supporting the drawing power and land values along its rail lines. Leveraging these trackside assets, the Land and Building Leasing Business (operating margin of 38.7%) earns high profitability, while the Distribution Business, including supermarkets and convenience stores, captures the daily consumption of residents along the lines. Other businesses such as Construction, Facility Management, and Childcare complement this structure by accumulating earnings, including through intra-group transactions. The company is proceeding with facility renewal while utilizing subsidy programs from the national and local governments, advancing both interest-bearing debt reduction and profitability enhancement in parallel.
Company Strengths
In January 2025, the company implemented a fare revision (the first in 29 years) for the Railway Business, with the full-year effect reflected in FY2026 (ending March 2026). Operating revenue of the Transportation Business rose sharply to ¥14,052 million (up ¥1,012 million, or +7.8%, year on year), and operating profit rose to ¥1,578 million (up ¥660 million, or +71.9%, year on year). Passenger numbers also continued their recovery trend, up +1.1% year on year, achieving a structural uplift in the revenue base.
The Real Estate Business achieved an operating margin of 38.7% in FY2026 (ending March 2026), the highest level within the group. The company has continued to acquire new leasing properties in the Tokyo metropolitan and Kansai areas—in April 2025 (Settsu City, Osaka Prefecture), September 2025 (Katsushika Ward, Tokyo), and January 2026 (Tachikawa City, Tokyo)—executing a strategy of building up leasing revenue. It has also expanded facilities managed under contract from the Kobe Road Public Corporation (newly taking on management of the Minodani parking lot from April 2025), strengthening its stable revenue base.
The company has diversified its operations across Railway, Bus, and Taxi (Transportation Business), Land and Building Leasing, Supermarket, Convenience Store, and Food and Beverage (Distribution Business), and Childcare, Construction, and Facility Management (Others). In FY2026 (ending March 2026), segment operating revenue was distributed across businesses, with the Transportation Business at ¥14,052 million, the Distribution Business at ¥5,296 million, Others at ¥3,482 million, and the Real Estate Business at ¥2,047 million, reducing dependence on any single business.
ENVALITH's Perspective
Performance Trend
Consolidated results for FY2026 (ending March 2026) showed operating revenue of ¥23,347 million (+5.5% year on year), operating profit of ¥2,421 million (+20.7%), ordinary profit of ¥1,861 million (+17.1%), and net income attributable to owners of parent of ¥1,462 million (+27.1%), achieving double-digit profit growth at every income level. This marked the fifth consecutive year of operating profit growth, with operating profit having expanded 2.3-fold versus FY2022 (ending March 2022). The main drivers were: (1) the full-year contribution of the January 2025 railway fare revision (Transportation Business operating profit +71.9%); (2) an increase in inbound and taxi demand driven by the Osaka-Kansai Expo (an external factor); and (3) increased revenue in the real estate leasing business from the acquisition of new properties. Meanwhile, the Distribution Business saw operating profit decline sharply by -76.7% year on year due to consumers' tendency to curb spending (an external factor: soaring energy and food prices). For FY2027 (ending March 2027), the outlook turns to a profit decline (net income -18.6%) as the special demand from the Expo fades and personnel expenses rise.
Growth Strategy
Under the Medium-Term Management Plan 2026, the company is strengthening its earnings capacity through fare revisions, real estate investment, and revitalization along its rail lines
The fare revision implemented in January 2025, the first in 29 years, contributed to results for the full fiscal year in FY2026 (ending March 2026), with Railway Business operating income reaching ¥1,578 million, up 71.9% year on year. FY2027 (ending March 2027) is expected to see a decline in profit due to a decrease in passenger transportation revenue and increased costs, but the effect of the revision will contribute permanently to boosting earnings.
The company continued to acquire new properties in the Greater Tokyo and Kansai areas, including in April 2025 (Settsu City, Osaka Prefecture), September 2025 (Katsushika Ward, Tokyo), and January 2026 (Tachikawa City, Tokyo). For FY2027 (ending March 2027), the company forecasts increased revenue and profit driven by growth in the leasing business, aiming to further expand this segment, which has the highest profit margin within the group.
The company is strengthening passenger attraction through the launch of digital tickets utilizing QR codes in conjunction with the Osaka-Kansai Expo and the launch of international flights at Kobe Airport, as well as through the rollout of special tickets such as the "Arima Gourmet & Yukemuri Ticket." A key challenge is the continued development of measures to sustain demand after the Expo concludes.
The company expanded its customer base through the launch of the sixth vehicle of the mobile supermarket "Tokushimaru" (November 2025) and renovated the KFC store in front of Mukonoso Station. However, operating income in the Distribution Business for FY2026 (ending March 2026) fell sharply to ¥24 million (down 76.7% year on year), making it an urgent priority to respond to soaring energy and food prices. For FY2027 (ending March 2027), the company forecasts increased revenue and profit driven by growth in the Supermarket Business.
The company is advancing track reinforcement and electrical equipment renewal work, utilizing national and local government subsidy programs. In March 2026, the slope construction at the platform of Arimaguchi Station was completed, and operation of a new rolling stock set began for the first time in six years. Through improved safety and convenience, the company aims to maintain long-term ridership along its railway lines.
Last updated: July 19, 2026