KNT-CT Holdings Co., Ltd.

Business Details

The sole reportable segment of KNT-CT Holdings. It is built on two pillars: individual travel media/web sales (including escorted tours) by Club Tourism Co., Ltd., and corporate/group travel and MICE business by Kinki Nippon Tourist Co., Ltd. The segment covers three areas: domestic travel, overseas travel, and inbound (visit-Japan) travel. Funding relies solely on internal capital, with no borrowings or bond issuance. The company has resolved to merge the group's four main companies into a single entity effective around April 1, 2027.

Recent Overview

Net sales rose 8.2% to ¥297,065 million; net profit improved significantly, up 26.1%, aided by deferred tax asset recognition

In the fiscal year ended March 2026, overseas travel volume in particular increased, resulting in net sales of ¥297,065 million (up 8.2% year on year). On the other hand, operating income rose only slightly to ¥6,071 million (up 0.5% year on year) due to factors such as increased human capital and system investment and the cancellation of overseas tours related to Middle East conditions. Ordinary income increased to ¥7,555 million (up 11.5% year on year), aided by higher interest income (up from ¥590 million to ¥995 million). Due to the additional recognition of deferred tax assets (income tax adjustment of -¥2,504 million), profit attributable to owners of parent increased significantly to ¥9,682 million (up 26.1% year on year). As a subsequent event, on May 13, 2026, the company entered into merger agreements to absorb Club Tourism, Kinki Nippon Tourist, and Kinki Nippon Tourist Blue Planet (effective April 1, 2027). The company also resolved to acquire and cancel 250 shares of Class B shares for a total of ¥25,115 million (scheduled for June 30, 2026). The forecast for FY2027 (ending March 2027) calls for net sales of ¥307,000 million (up 3.3%), operating income of ¥6,200 million (up 2.1%), ordinary income of ¥7,000 million (down 7.4%), and profit attributable to owners of parent of ¥6,000 million (down 38.0%), indicating an expected decline in profit.

Key Products

Growth Drivers

• Expansion of inbound travel: Demand has grown substantially on the back of continued yen depreciation and increased airline seat supply, driving the travel industry as a whole
• Recovery in overseas travel: Gradual recovery toward pre-pandemic levels, with rising travel unit prices also contributing
• Expansion of Club Tourism's high-value-added products: Differentiated products such as chartered cruises, private viewings of special exhibitions, and Grand Egyptian Museum tours have been well received
• Capturing demand related to major sporting and cultural events: Active involvement in events such as World Athletics Championships Tokyo 25, Tokyo Marathon 2026, and the Osaka-Kansai Expo
• Positioning regional co-creation business and inbound travel business as growth pillars, promoting the establishment of a DMC business model and rebuilding of a global network
• Expansion of non-operating income due to increased interest income (from ¥590 million in the prior period to ¥995 million in the current period)
• Consolidation of management resources, unification of decision-making, and improved operational efficiency through the merger into a single company (absorption of the group's four main companies) in April 2027
• Utilization of a combined customer base of 10 million people and enhancement of BtoC business value through the integration of the individual travel business (to be implemented in April 2026)

Risks

• Domestic travel: Risk of sluggish demand growth due to continued consumer frugality amid rising travel costs, including accommodation, and higher living costs
• Overseas travel: Risk that soaring travel costs, driven by yen depreciation, higher prices at destinations, and persistently high crude oil prices, will suppress demand recovery
• Geopolitical risk: Risk of cancellation of overseas tours due to deteriorating conditions such as in the Middle East (tour cancellations occurred during the current period due to Middle East conditions)
• Natural disasters and infectious diseases: Risk of a sharp decline in demand in the event of large-scale natural disasters, international terrorism, conflicts, or infectious disease outbreaks
• OTA competition and digitalization: Intensifying competition due to the business expansion of OTAs, including foreign firms, and the advancement of dynamic pricing functions
• Rising costs: Risk that increases in personnel expenses, system investment, and depreciation will squeeze profits (increased human capital and system investment suppressed operating income in the current period as well)
• Population decline and aging: Structural downward pressure on travel demand due to demographic changes in Japan
• Integration risk associated with the merger into a single company: Execution risk related to system integration, organizational restructuring, and personnel allocation in connection with the absorption-type merger scheduled for April 2027
• Cash outflow associated with redemption of Class B shares: A total expenditure of ¥25,115 million is planned for June 2026, with implications for the company's finances
• Forecasted decline in profit for FY2027 (ending March 2027): Profit attributable to owners of parent is forecast to decline significantly to ¥6,000 million (down 38.0% year on year)