Tokyo Metro Q2 FY2027: Revenue up, net profit falls 16%

Tokyo Metro reported operating revenue of ¥217.2 billion, up 3.2% year on year, for the six months ended September 2026. Operating profit fell 1.6% to ¥49.2 billion, while net income attributable to owners of the parent declined 16.3% to ¥29.2 billion.

• Passenger revenue: Revenue from both commuter-pass and non-pass customers increased, lifting total passenger revenue 3.0%. Passenger numbers rose 2.8%.
• Operating expenses: Costs rose 4.7% to ¥168.0 billion, led by higher personnel expenses and other costs, outpacing revenue growth.
• Net income comparison: The year-earlier period included a ¥6.4 billion extraordinary gain from a revision to the retirement benefit plan. There was no comparable gain this period.

Higher costs and a prior-year one-off weighed on profit despite revenue growth. More passengers and higher transport revenue supported the top line, but rising costs cut into operating profit. Net income fell further, in part because the prior-year period included the extraordinary gain.

The core transportation business grew revenue but posted lower profit, while real estate and life and business services recorded gains in both. Compared with the year-earlier period, the weakness in transportation contrasted with particularly strong growth in life-related services.

Transportation generated operating revenue of ¥197.4 billion and operating profit of ¥40.6 billion. Higher passenger revenue lifted sales, but rising expenses pulled profit below the year-earlier level. Passenger numbers increased, while cost control remains a key focus.

Real estate recorded operating revenue of ¥7.5 billion and operating profit of ¥2.9 billion. Rental income from acquired and newly opened properties, including Metro City Kanda Awajicho and Asakusa Square, contributed to growth in both revenue and profit.

Life and business services posted operating revenue of ¥14.3 billion and operating profit of ¥5.2 billion, the strongest profit growth among the three businesses. Contributions came from rental income at existing stores, the opening of LifeFit, advertising agency production fees and licensing fees associated with new contracts for fifth-generation mobile services. The business is adding growth beyond Tokyo Metro's rail operations.

Tokyo Metro left its consolidated forecast for the fiscal year ending March 2027 unchanged. It expects operating revenue of ¥437.2 billion, up 3.5% from the previous fiscal year, while operating profit is forecast to fall 9.1% to ¥81.4 billion and net income 15.3% to ¥50.0 billion.

The company made no changes to its most recently announced forecast. Revenue increased in the first half, but operating profit declined from a year earlier, leaving investors to watch whether Tokyo Metro can absorb higher costs and meet its full-year targets in the second half. The earnings release did not include the previous fiscal year's full-year results or the prior forecast amounts, so comparisons are shown using the year-on-year rates disclosed by the company.

Total assets stood at ¥2.0649 trillion at the end of the first half, an increase of ¥17.7 billion from the end of March 2026. The equity ratio rose to 36.4%, from 35.9% at the previous fiscal year-end.

The company generated cash from operations while continuing to spend on investment, mainly equipment. Proceeds from bond issuance contributed to positive financing cash flow, and Tokyo Metro is also acquiring properties for sale and issuing bonds. It forecasts interim and year-end dividends of ¥22 each, for an annual payout ¥2 higher than the previous year. The earnings release did not announce a new share buyback.

Passenger numbers and passenger revenue rose in the first half, but operating expenses grew faster, putting pressure on profit. Sustaining demand and managing cost increases will be important to achieving the full-year forecast.

• Higher personnel and other costs: Operating expenses increased 4.7% year on year. If costs continue to rise, passenger revenue growth may translate less effectively into operating profit.
• Transportation profit trends: Operating profit in the core business fell 4.8% despite revenue growth. Balancing passenger and fare revenue gains against the costs of operations and maintaining facilities remains a challenge.
• Interest and funding costs: Interest payments rose to ¥6.3 billion from ¥6.0 billion a year earlier. As the company continues to raise funds, including through bond issuance, changes in interest expenses could affect earnings.
• Uncertainty in the outlook: The company says its forecast is based on information currently available and certain assumptions, and actual results may differ due to various factors.