2020/08/04 Financial Results Overview, First Quarter, FY2021/3
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FY21.3 Financial Results Overview, First Quarter August 4, 2020 Kyushu Railway Company Contents Ⅰ Financial Results for the Three-month Period 3 Ended June 30, 2020 Ⅱ Recent Circumstances, Current Initiatives, 11 and Results Forecasts 2 Ⅰ. Financial Results for the Three-month Period Ended June 30, 2020 3 Consolidated Financial Highlights for the Three-Month Period Ended June 30, 2020 (Year on Year) (\bil) Operating revenue 3 months ended 3 months ended Operating revenue declined substantially due to the YoY June, 30 2019 June, 30 2020 decrease in railway transportation revenues [¥(24.6) Operating revenue 100.4 61.8 (38.6) 61.6% billion] resulting from the influence of the COVID 19 infection. Operating income 15.4 (15.7) (31.1) - Operating income Ordinary income 16.0 (15.2) (31.3) - Profits were down accompanying the decline in Extraordinary gains and 0.1 7.0 6.9 - operating income, despite lower expenses resulting losses from suspension of train service and store closures. Net income attributable to 12.3 (5.1) (17.4) - owners of the parent (※) Extraordinary gains and losses EBITDA 21.3 (9.1) (30.5) - We recorded a gain on sale JR Kyushu Drug Eleven Co., ※Note: EBITDA = operating income + depreciation expense (excluding depreciation of leased assets held for subleasing purposes). The same applies hereafter Ltd., shares (+ ¥9.1 billion) and a provision for loss on disaster [(¥(2.1) billion] related to the restoration of the Hitahikosan Line. Change in operating revenue by segment Change in operating income by segment (¥bil) (億円) (億円)(¥bil) 1,100110 20020 1,004100.4 △(26.8)268 15.4154 △(23.9)239 10010 90090 +4.4+44 (8.2) △82 0 (6.3) 0 (5.4) 70 (1.7) +0.7 700 61.8 +0.1 618 (10) (2.2) △ 100 (0.2) 500 (15.7) ( Operating Transportation Construction a Real Restaurant and Retail Other (FY21.3 Operating 50 Adjustment △(20)200 Transportation ( Operating Construction a Real Restaurant and Retail Other (FY21.3 Operating revenues revenues FY20.3 nd Hotelsnd revenues revenues FY20.3 nd Hotelsnd 2020.3 2021.3 2021.3 ( 運 建 不 流 そ 調 ( (2020.3 運 建 不 流 そ ( 輸 設 動Estate 通 の 整 輸 設 動 通 の 営 営 営 Estate 営 業 サ 産 ・ 他 額 業 サ 産 ・ 他 ) ) 業 業 ) 収 ー ・ 外 収 ) 利 ー ・ 外 利 期 益 ビ ホ 食 期 益 益 ビ ホ 食 益 ス テ 期 期 ) ) ) ス テ ) ル ル Note: Figures for changes in operating revenues and EBITDA by segment are prior to eliminating intersegment transactions and therefore do not coincide with consolidated figures. 4 Transportation Segment There was a significant decline in revenues from railway transportation due to the trend toward people staying inside accompanying the COVID 19 infection and to measures such as the suspension of train operation, etc., which were implemented with the objective of preventing the spread of the infection. Operations on all hydrofoil ferry routes were suspended due to a government request to halt passenger transportation. YoY Trend of handling revenues (YoY) ● The year-on-year difference is almost entirely due to the influence of the COVID 19 infection. 60% (\bil) 47.9% 3 months ended 3 months ended YoY June, 30 2019 June, 30 2020 Operating revenue 44.1 17.3 (26.8) 39.2% 40% Railway Business 41.9 16.2 (25.7) 38.7% (non-consolidated) 28.2% Railway transportation 21.8% 37.8 13.2 (24.6) 34.9% revenues 20% Operating income 9.9 (13.9) (23.9) - ~ June 19: Request Railway Business Declaration of state of for self restraint in 9.8 (13.5) (23.3) - emergency, April 7 to May 25 movement among (non-consolidated) prefectures EBITDA 12.1 (11.3) (23.5) - 0% Railway Business 11.8 (11.1) (22.9) - 4月 5月 6月 1Q (non-consolidated) Apr. May June cumulative total Status of suspended train operations Handling revenues 21.8% 28.2% 47.9% 31.3% ●We suspended operation of trains, principally during the state of emergency Commuter pass revenues 48.8% 93.3% 108.8% 73.0% ●From the perspective of preventing the spread of the COVID 19 infection, Short distance revenues 31.9% 35.4% 60.0% 41.8% we suspended operation of all limited express trains on conventional lines during the Golden Week holiday period (May 2 to May 6,). Medium and long distance revenues 9.1% 12.9% 33.7% 17.9% Suspension rate Type of train Period of suspension (YoY) Kyushu Shinkansen March 20 to June 12 19% Status of hydrofoil ferry business Conventional line March 20 to June 18 28% limited express Service suspended on all routes since March 9, 2020, in accordance Conventional line April 11 to May 31 8% local trains with a government request to halt passenger transportation D&S trains March 20 to June 18 65% [1Q operating revenues: ¥(0.4) billion YoY] * Continued suspension of certain D&S trains 5 Railway business Railway Transportation Revenues (\bil) 3 months ended 3 months ended YoY Major Factors June, 30 2019 June, 30 2020 Total 37.8 13.2 (24.6) 34.9% Commuter pass 8.3 6.1 (2.1) 73.8% Non-commuter pass 29.5 7.0 (22.4) 24.0% Shinkansen 13.3 3.2 (10.0) 24.5% Decline due to influence of COVID 19 Commuter pass 0.7 0.6 (0.1) 85.4% Decrease due to rebound from previous year’s longer Golden Week holiday period Non-commuter pass 12.6 2.6 (9.9) 21.0% Decline due to influence of COVID 19 Conventional Lines 24.4 9.9 (14.5) 40.6% Decrease due to suspension of all limited-express trains during Golden Week Commuter pass 7.6 5.5 (2.0) 72.7% period Decrease due to rebound from previous year’s longer Golden Week holiday Non-commuter pass 16.8 4.4 (12.4) 26.1% period Passenger-Kilometers (Millions of passenger-kilometer) 3 months ended 3 months ended YoY June, 30 2019 June, 30 2020 Total 2,361 1,155 (1,205) 48.9% Commuter pass 1,122 850 (272) 75.8% Non-commuter pass 1,238 304 (933) 24.6% Shinkansen 493 135 (357) 27.6% Commuter pass 52 44 (8) 84.5% Non-commuter pass 440 91 (349) 20.7% Conventional Lines 1,867 1,019 (848) 54.6% Commuter pass 1,070 806 (263) 75.3% Non-commuter pass 797 213 (584) 26.8% 6 Real Estate and Hotels Segment In the real estate lease business, revenues were significantly lower due to the closure of station buildings, rent reductions offered to support tenants, etc. In the hotel business, there was a significant decrease in occupancy rates due to the influence of hotel closure and people staying at home. YoY Real Estate Lease ● In the real estate lease business and the hotel business, the year-on-year differences are 150% 105.9% 104.8% 100.2% almost entirely due to the influence of the COVID 19 infection.. (\bil) 88.5% 100% 3 months ended 3 months ended Station building 41.9% YoY tenant sales (YoY) 50% June, 30 2019 June, 30 2020 Operating revenue 0% 19.7 11.5 (8.2) 58.4% 1Q 1Q 20.3期1Q 2Q 3Q 4Q 21.3期1Q FY2020.3 FY2021.3 Real Estate Lease 13.3 10.2 (3.1) 76.4% Status of closed Closure of five major station buildings for approximately up to 40 days, centered on the facilities period of the state of emergency Condominium Sales 2.3 0.4 (1.9) 20.1% Amount of influence Hotel Business 3.9 0.8 (3.1) 20.9% Support measures for station building tenants in the 1st quarter Operating income During period of 5.0 (0.3) (5.4) - 50% reduction closure April to May Real Estate Lease Fixed rent During period of 4.4 1.6 (2.7) 37.6% reductions 10% to 30% reduction operation Approximately Condominium Sales 0.1 (0.2) (0.3) - June 10% to 30% reduction ¥(1.5) billion Reduction of sales Hotel Business promotion expense April to May 100% reduction 0.4 (1.8) (2.2) - payments EBITDA 7.6 2.6 (5.0) 34.2% In addition to the above, postponed payment of fixed rent and certain expenses in April and May Real Estate Lease 6.6 4.0 (2.6) 60.6% Office buildings / Solid trend, with no change in vacancy rates rental apartments Condominium Sales 0.1 (0.2) (0.3) - Hotel Business 0.8 (1.2) (2.0) - Hotels 100% 81.8% 79.0% 78.6% 56.1% 50% Occupancy rate 10.9% 0% 1Q 1Q 20.3期1Q 2Q 3Q 4Q 21.3期1Q FY2020.3 FY2021.3 Status of closed 8 domestic facilities closed for approximately up to 80 days, facilities centered on the period of the state of emergency 7 Retail and Restaurant Segment Conditions were difficult, mainly at stores in areas surrounding stations, due to a decline in railway passengers and a significant decline in the number of visitors to facilities around stations as a result of the closure of station buildings, etc. Challenging conditions are expected to continue, especially in the restaurant business, as people refrain from going out. Decline in YoY number of approx. railway ● The year-on-year difference is almost entirely due to the influence of the COVID 19 infection. passengers (40)% (\bil) Short distance revenues 3 months ended 3 months ended YoY (June) YoY June, 30 2019 June, 30 2020 Operating revenue 26.0 19.6 (6.3) 75.4% Decline in Decline in Operating income 0.7 (1.5) (2.2) - number number of people in EBITDA 1.1 (1.0) (2.2) - of station areas building surrounding • Due to the transfer of a portion of our shares in JR Kyushu Drug Eleven Co., Ltd., from the end of customers stations approx.