Nagoya Railroad Co., Ltd. Financial Analysis Report – Net Profit Growth of 116.3%

Business Description

Nagoya Railroad Co., Ltd. is a diversified company primarily involved in the transportation sector. The company’s core business operations include:

• Traffic Transport
• Real Estate
• Leisure and Services
• Distribution
• Aviation Services
• Other services such as equipment maintenance, information processing, and insurance agency

Geographically, the company operates mainly in Japan, with a significant presence in the Nagoya region.

Industry Position

Within the transportation industry, Nagoya Railroad holds a strong position, competing with other major players in the Japanese market. The company’s market share is bolstered by its diversified business segments, providing a competitive advantage.

Revenue Streams and Customer Base

The company’s revenue streams are diversified across multiple segments, with significant contributions from traffic transport and real estate. Customers range from daily commuters and real estate clients to leisure service users and aviation service customers. The company’s supply chain is robust, supporting its various business operations effectively.

Financial Statement Analysis

Income Statement

• Operating revenues for the six-month period ended 30 September 2024 increased to ¥334,518 million from ¥283,728 million in the same period of the previous year.
• Operating income grew significantly to ¥24,168 million from ¥15,900 million year-on-year.
• Profit attributable to owners of the parent more than doubled to ¥21,588 million, reflecting a 116.3% increase.

Balance Sheet

• Total assets increased to ¥1,369,810 million as of 30 September 2024, up from ¥1,303,205 million as of 31 March 2024.
• Total liabilities also rose to ¥892,833 million from ¥839,151 million within the same period.
• Shareholders’ equity improved to ¥337,609 million, indicating a solid financial position.

Cash Flow Statement

• Net cash provided by operating activities increased to ¥29,797 million from ¥19,031 million year-on-year.
• Net cash used in investing activities expanded to ¥71,144 million, primarily due to increased purchases of fixed assets.
• Net cash provided by financing activities was ¥36,345 million, reflecting a higher issuance of bonds.

Dividend Information

The company has forecasted an annual dividend of ¥30.00 per share for the fiscal year ending 31 March 2025, up from ¥27.50 in the previous fiscal year.

Key Findings

Strengths:

• Strong revenue growth across various segments.
• Significant increase in operating income and net profit.
• Improved cash flow from operating activities.

Risks:

• Increased total liabilities.
• Higher net cash outflows from investing activities.

Special Activities

The company has applied the “Accounting Standard for Current Income Taxes” from the beginning of the current semi-annual period, impacting its financial reporting [[10]].

Investment Recommendations

For Existing Investors

Given the strong financial performance and increased dividends, current investors should consider holding onto their shares to benefit from potential future gains and dividends.

For Potential Investors

Prospective investors might find Nagoya Railroad Co., Ltd. an attractive investment due to its diversified revenue streams, strong financial growth, and improved cash flows. However, they should also consider the increased liabilities and higher net cash outflows from investing activities.

Disclaimer

These recommendations are based on the company’s semi-annual financial report for the period ending 30 September 2024. Investors should conduct their own due diligence and consider their financial situation before making investment decisions.