Nippon Express Q2 FY2026: Operating profit jumps 56.7%, full-year forecast raised

The global economy continued a moderate recovery in the first half, although Middle East tensions and supply chain disruptions added uncertainty. Against this backdrop, Nippon Express achieved higher revenue and profit across the group, helped by resilient international cargo volumes, successful rate revisions, and restructuring benefits.

Revenue climbed to ¥1,356.6 billion (up 6.7% year-on-year), operating profit reached ¥44.7 billion (up 56.7%), pre-tax profit came to ¥37.3 billion (up 75.7%), and net income attributable to shareholders jumped to ¥24.2 billion (up 186.8%). The operating margin widened to 3.3% from 2.2% a year earlier, marking a clear improvement in profitability.

Full-year consolidated guidance has been raised from the forecast published on 13 May 2026. Revenue is now seen at ¥2,750 billion (up 1.9% from previous forecast), operating profit at ¥120 billion (up 20.0%), pre-tax profit at ¥105 billion (up 16.7%), and net profit at ¥70 billion (up 16.7%). Gains on the sale of low-yield properties are also expected to contribute.

Of the eight reporting segments, the five main logistics regions plus heavy haul & construction drove the top- and bottom-line expansion.

Japan saw increased air and warehouse cargo volumes, while rate revisions and cost cuts lifted revenue 2.8% to ¥643.4 billion and segment profit 44.3% to ¥27.8 billion. Americas eked out a 1.7% revenue gain to ¥70.4 billion on stronger warehouse cargo, but a decline in air freight pushed profit down 41.0% to ¥2.0 billion.

Europe benefited from automotive and e-commerce-related air freight, with revenue up 20.6% to ¥301.1 billion and profit up 17.8% to ¥4.1 billion. East Asia saw revenue rise 16.0% to ¥93.5 billion thanks to e-commerce air cargo, but higher costs left profit nearly flat, down 0.5% to ¥2.6 billion. South Asia & Oceania delivered standout growth: revenue surged 31.6% to ¥97.1 billion and profit more than doubled, up 116.2% to ¥4.2 billion, on strong air and sea freight.

In the specialist businesses, Security Transport posted revenue of ¥35.1 billion (up 2.0%) and profit of ¥1.4 billion (up 3.6%) thanks to rate adjustments and cost controls. Heavy Haul & Construction benefited from wind power projects, lifting revenue 13.1% to ¥28.0 billion and profit 62.7% to ¥3.7 billion. Logistics Support saw revenue slip 7.2% to ¥208.6 billion on lower oil-handling volumes, but price adjustments pushed profit up 26.6% to ¥9.4 billion.

Total segment profit rose 32.0% to ¥55.6 billion, with South Asia & Oceania and Heavy Haul & Construction doubling their profits.

Total assets at the end of the half-year stood at ¥2,357.6 billion, down 2.4% from the previous fiscal year-end. Cash and cash equivalents decreased by ¥59.9 billion to ¥223.4 billion. Operating cash flow was a ¥76.0 billion inflow (down ¥12.4 billion year-on-year), while investing cash outflows narrowed to ¥28.9 billion and financing cash outflows widened to ¥110.5 billion, driven by repayment of long-term borrowings, bond redemptions, and share buybacks.

An interim dividend of ¥50 per share was paid, and the full-year dividend is expected to remain unchanged at ¥100 per share, in line with the previous year. The company also executed ¥15.2 billion in share repurchases during the half, strengthening shareholder returns and improving capital efficiency. The equity ratio attributable to parent shareholders rose to 35.5% (from 34.3% at end-FY2025), indicating a stable financial base.

The company identifies the following principal risks and challenges:

• Escalating Middle East tensions could raise energy costs and disrupt supply chains, affecting logistics costs and service stability.
• Upward pressure on domestic logistics costs, including labour and fuel prices, persists.
• International cargo demand, while solid especially from Asia, remains at risk of a global slowdown.
• Exchange rate fluctuations may impact overseas earnings.
• Heightened uncertainty in the business environment complicates capital investment and M&A decisions.

Nippon Express raised its consolidated forecast for the fiscal year ending December 2026, reflecting a continued recovery in Asia-originating cargo, steady domestic logistics, and booked gains from the sale of low-yield real estate.

Operating profit is set to surge 133.1% compared with the prior year, and net profit is forecast to reach ¥70.0 billion, swinging from a low base. Upward revisions are underpinned by higher air and sea freight volumes, cost savings from restructuring, and the property disposal gains.

Nippon Express continued to push forward structural reforms in its domestic logistics operations, integrating functions and streamlining processes. Combined with rate revisions, this lifted the Japan segment’s profit margin to 4.3% from 3.1% a year earlier. The company is also accelerating the sale of low-return properties to improve asset efficiency and generate cash.

Globally, air and ocean forwarding remain growth engines. South Asia & Oceania and Europe each posted over 30% revenue growth, capturing e-commerce and automotive logistics demand. Further network expansion, including through M&A, is expected going forward.