Overview of Fiscal 2010
During the fiscal year from April 1, 2010, to March 31, 2011 (fiscal 2010),Japanese economy showed some signs of recovery, however unemployment levels remained high and commodities saw gradual but continuous deflation, resulting in conditions remaining in a feeble state.
In these challenging circumstances, the Keikyu Group has remained dedicated to offering safe, reliable, and high quality services, and improving operational efficiency. We have made concerted efforts in response to the full-fledged internationalization of Haneda Airport, and striven to strengthen our management base.
However, due to the negative effect on Japan’s economic activities caused by the Great East Japan Earthquake, which occurred in March, operating revenues decreased 2.0% year on year to \299,841 million, operating income decreased 4.7% to \19,519 million, recurring income increased 0.1% to \13,407 million, and net income decreased 4.3% to \7,044 million.
Although direct damage to the Keikyu Group by the Great East Japan Earthquake was minimal, individual business operations were affected. Against this backdrop, all Group employees coordinated with each other, with the railway operations striving to reduce power consumption, given electricity capacity limitations, while continuing to offer stable transportation services. In the bus operations, express intercity bus services linking Tokyo with areas affected by the disaster rapidly resumed. Our retailing operations worked hard to continue providing a stable supply of products in department stores and other sales outlets. We will continue, in the future, to faithfully carry out our responsibilities as a corporate group responsible for lifelines such as public transportation.
The characterizing feature of the Keikyu Group is based on its railway line network in one of the most densely populated and industrialized areas in Japan that extends across a dynamic region between Shinagawa, Kawasaki, Yokohama and the Miura Peninsula and most notably Haneda Airport in which high-density business development is taking place and flourishing future growth is expected.
The Keikyu Group remains firm in its resolve to improve its enterprise value by making the most of business opportunities along Keikyu railway lines which notably include the full-fledged internationalization of Haneda Airport.
MANAGEMENT POLICY
1.Key Management Policy
Inspired by the Keikyu Group philosophy-“To contribute to the development of society by creating new value through business that support urban lifestyles”-we are striving to provide safe and reliable services and products through the mainstay rail and bus transportation business as well as other businesses, including real estate, operation of hotels, leisure services and retailing. As a group closely linked to regional communities and lifestyles, we are strengthening Group management primarily along Keikyu railway lines with the goal of maximizing enterprise value.
2.Management Strategies
The Keikyu Group considers thorough safety and reliability in all its business activities to be of prime importance, and strives to supply safe and reliable services and products not only in the transportation business but in all Group business operations.
The Keikyu Group also considers a wide variety of areas, from Haneda Airport, which has become a gateway to the world, to business and commercial areas such as Shinagawa, Kawasaki, and Yokohama, and areas rich in nature such as Yokosuka, Miura, Zushi, and Hayama, to be business sites. The Group is constantly working to make maximal use of these geographical advantages, and to increase the value of the areas along Keikyu railway lines by improving customer convenience.
Moreover, we will emphasize compliance and strive to contribute to local communities, while we further reinforce our Corporate Governance System. We will vigorously address social issues, such as environmental protection.
Furthermore, we will step up our efforts to bolster the foundation of the business through a review of businesses and organizations as necessary, efficient use of resources, and maximization of asset efficiency in response to changes in the economic and social environment. Also, we will work to enhance efficiency of Group management capability while at the same time strengthen the financial position and competitiveness.
3.Basic Policy on the Distribution of Profits and Cash Dividends for Fiscal 2010 and Fiscal 2011
Keikyu regards the return of profits to shareholders as one of the most important management priorities. Keikyu’s policy on the distribution of profits is to maintain stable dividend payments, taking financial performance and the financial position into consideration.
Adhering to this policy, Keikyu maintained payment of annual dividends of \5 per share, consisting of an interim dividend of \2.5 and a year-end dividend of \2.5, for 26 consecutive fiscal years since 1982. In order to promote return of profits to shareholders, Keikyu has paid cash dividends of \6 per share since fiscal 2008. Although the economic environment is harsh, Keikyu intends to maintain stable dividend payments for fiscal 2011.
Internal reserves are earmarked for capital investment in safety-related projects and for investment in strategic business locations, notably Shinagawa and Haneda Airport, as well as for repayment of interest-bearing debts in order to bolster the foundation of the business and strengthen the financial position. Also, in order to implement a flexible capital measure in response to changes in the operating environment, we will consider share buyback.
A message from the president
Outlook for Fiscal 2011
The business climate surrounding the Keikyu Group is expected to continue to remain harsh, due to the effects of the Great East Japan Earthquake and the ensuing electrical power shortages.
Given these circumstances, the outlook for the economy such as individual spending trends are unclear; however at present, management forecasts a business performance on a consolidated basis for the fiscal 2011 as follows.
The “Transportation” and “Leisure Services” businesses are expected to see a reduction in operating revenues due to a decrease in travelling. Furthermore, construction subcontracting related business included in “Other” business, is forecast to see a reduction in revenues as a result of the completion of the large scale projects from the previous period. As a result, operating revenues are expected to a 1.6% year on year decrease to \295,000 million.
With regard to income, in addition to reduced revenue, increases in depreciation for railway operation, etc., are expected to result in a 26.7% year on year decrease in operating income to \14,300 million, a 43.3% year on year decrease in recurring income to \7,600 million, and a 71.6% year on year decrease in net income to \2,000 million.
June 29, 2011
Tsuneo Ishiwata
President and Representative Director
Notice of Change of English Company Name
We change our English Company Name“Keikyu Corporation”on October 21, 2010.(Previous English Company Name: Keihin Electric Express Railway Co., Ltd.) more
