Kobe Electric Railway Co.,Ltd.

Business Details

The Transportation Business segment consists of Kobe Electric Railway (Railway Business), Shintetsu Bus Co., Ltd. (Bus Business), and Osaka Shintetsu Toyonaka Taxi Co., Ltd. / Shintetsu Taxi Co., Ltd. (Taxi Business). Its primary operating areas are the regions along the railway lines, including Kita-ku Kobe City, Sanda City, and Ono City, with the Railway Business forming the core of operating revenue. The segment supports the region's public transportation infrastructure by providing safe, secure, and comfortable transportation services. In FY2026 (ending March 2026), the full-year effect of the fare revision contributed significantly, resulting in substantial increases in both operating revenue and operating profit.

Recent Overview

The full-scale contribution of the fare revision effect drove a substantial improvement, with operating profit up 71.9% year on year.

In FY2026 (ending March 2026), operating revenue for the Transportation Business was ¥14,052 million (up ¥1,012 million, +7.8% year on year), and operating profit was ¥1,578 million (up ¥660 million, +71.9% year on year), achieving substantial profit growth. In addition to the full-year contribution of the January 2025 railway fare revision, increased inbound demand and taxi demand due to Expo 2025 Osaka, Kansai, and the expansion of chartered pick-up/drop-off services in the Bus Business contributed to the results. Capital investment also continued, including the introduction of a newly built train set for the first time in six years and barrier-free improvements at Arimaguchi Station. For the next fiscal year (FY2027, ending March 2027), the Railway Business is expected to see revenue growth but profit decline due to a decrease in passenger transportation revenue and increased costs such as personnel expenses.

Key Products

Growth Drivers

• Revenue contribution from the January 2025 railway fare revision (the first in 29 years), with the full-year effect reflected in FY2026
• Increased leisure demand, inbound demand, and taxi demand associated with Expo 2025 Osaka, Kansai
• Revenue growth from ongoing sales activities for chartered pick-up/drop-off services for companies and schools in the Bus Business
• Revenue expansion in the Taxi Business through the use of ride-hailing apps, strengthened driver recruitment, and the full-scale launch of community transportation services
• Strengthened passenger attraction through the sale of digital tickets and special commemorative tickets
• Sale of QR-code-based digital tickets in conjunction with the launch of international flights at Kobe Airport

Risks

• Long-term decline in passenger demand due to continued population decline along the railway lines
• Expected revenue growth but profit decline in the Railway Business in the next fiscal year (FY2027, ending March 2027) due to decreased passenger transportation revenue and increased personnel and other expenses
• Cost pressure from sustained high energy and raw material prices
• Profitability challenges on the Ao Line (cost reduction measures such as infrastructure/operation separation are under discussion with stakeholders)
• Risk of service disruption due to natural disasters, etc. (addressed through track reinforcement and electrical equipment renewal work)
• Impact on passenger demand from stagnant personal consumption due to U.S. tariff policy and unstable international conditions