Review of Operations

Review of Operations
Transportation
In our transportation operations, we view providing comfortable, convenient, high quality transportation services
with safety as their top priority as our greatest social
responsibility. During the year, we undertook numerous
efforts to ensure the safety of operations. In accordance
with the revisions of various laws related to transportation
affecting the Group, we revised our Safety Management
Regulations and further enhanced the safety management system, working to maintain proper operations. In
addition, we committed ourselves to capital investments
and other measures to increase safety quality.
In the railway business, we moved forward with various underground construction projects. We completed
a portion of a tunnel at a crossing on Kannana Dori
(number-seven circular road) between Higashi-Kitazawa
and Setagaya-Daita stations, which is being built to accelerate completion of multiple double tracks connecting
suburbs on Odakyu lines, which is a key management
issue. Moreover, we made preparations to start excavations for the construction of shield tunnels running under
the tracks. Among other initiatives, we took various steps
to improve services, such as enhancing the line between
Izumi-Tamagawa and Mukougaoka-Yuen stations to increase carrying capacity through multiple double tracks
and launching the new 4000 series of commuter carriages in September 2007 to further boost safety and other
features for passengers. Other efforts included introducing an improved train timetable, launching the direct connection to the Tokyo Metro lines using the new 60000
series Romancecar (MSE), and expanding the frequency
of trains and number of passenger carriages per train
to relieve congestion and increase the number of seats
available.
In our sales activities, we made efforts to boost passenger numbers for the Romancecar and attract visitors
to the Hakone region through television commercials
and other promotional tools. We also revised the content of our Hakone Freepass package, which boosted
its sales. Among other measures, we strove to increase
revenues through aggressive marketing of the OdakyuTokyo Metro Pass and other promotional products as
well as making Group-wide efforts to stimulate demand.
We took various actions to improve the degree of convenience of passengers based on the use of the IC card
PASMO transit pass system. For example, we launched a
new service in June 2007 enabling users to earn Odakyu
points when using the automatic charge system in com-
08
bination with an OP credit card. And, in March 2008, we
expanded the scope of sales of joint work and school
commuting PASMO transit passes with other transportation companies.
Among efforts to improve facilities and equipment, we
began construction necessary for the introduction of a
D-ATS-P System, a new train operation control system
that will enable more immediate and detailed control of
train operations. We are taking this step in order to effect
a fundamental enhancement of safety in train operations.
Similarly, we are continuing to make progress with the
construction of a Centralized Train Crossing Surveillance
System to boost safety measures. As a whole, the Group
continued efforts to improve its train station facilities,
including making the facilities “barrier free” for handicapped and elderly passengers. On our Odakyu lines, we
proceeded with renovations at Shin-Yurigaoka, Ebina,
and other stations, while the Hakone Tozan Co., Ltd.,
made improvements at Hakone-Yumoto, Kazamatsuri,
and other stations.
In our bus service operations, bus companies pushed
ahead with the introduction of buses with low-pollution
exhaust gas at such companies as Odakyu Bus Co., Ltd.
and Tachikawa Bus Co., Ltd., and worked to improve
services, notably through the adoption of barrier-free
facilities. To further boost convenience for passengers,
timetables were improved, bus routes were re-examined
to better meet customer needs, and the use of the IC
card PASMO transit pass expanded to more routes.
Among measures to improve transport convenience in
the Hakone region, our ropeway operations completed
replacing the ropeway between Owakudani and Togendai stations, starting operations of the new section in
June 2007. The reconstruction of Togendai Station, the
main transportation terminal of the Group in the Hakone
area was also completed during the fiscal year, complete
with barrier-free facilities.
Besides these initiatives, the Company achieved firm
growth in passengers carried and revenues benefited
from a change in the accounting method for the IC card
PASMO transit pass system. As a result, operating revenues in this segment amounted to ¥171,712 million, rising ¥4,079 million, or 2.4%, from a year earlier. However,
operating income edged down ¥218 million, or 0.8%, to
¥26,091 million, primarily due to an increase in depreciation expenses.
Operating Results by Segment
Segment
Railway business
Bus service business
Taxi business
Sightseeing boat business
Ropeway business
Other transportation businesses
Eliminations
Total operating revenues
Operating Results of the Railway Business of Odakyu Electric Railway Co., Ltd.
Consolidated Results
(Year ended March 31, 2008)
Thousands of
Millions of yen
(%)
U.S. dollars
Operating Revenues
Year-on-year
¥ 128,240
38,092
3,994
2,176
1,672
1,110
(3,572)
¥ 171,712
$ 1,291,177
383,528
40,210
21,913
16,836
11,182
(35,967)
$ 1,728,878
1.9
3.9
(2.2)
22.4
40.8
10.9
—
2.4
Consolidated Results
(Year ended March 31, 2008)
Category (unit)
Number of business days (days)
Operating kilometers (kilometers)
Kilometers traveled by passenger trains
(thousands of kilometers)
(%) Year-on-year
366
120.5
0.3
0.0
167,714
0.1
Commutation
Non-commutation
Total
Commutation
Revenues from passenger transportation
Non-commutation
(millions of yen) Total
Miscellaneous revenues from transportation
(millions of yen)
434,856
279,175
714,031
44,203
69,099
113,302
2.0
6.1
3.6
1.8
2.3
2.1
4,296
(0.3)
Total revenues from transportation (millions of yen)
Car load efficiency (%)
117,599
47.8
2.0
—
Number of passengers
carried
(thousands)
Note: Load efficiency computation method
Load efficiency = total passenger kilometers (number of people passing between stations x kilometers
between stations) / (kilometers traveled by passenger cars x average capacity) x 100
TOPICS
New Romancecar MSE
Weekday
Helping out the business scene with a comfortable, reserved
seat service during rush hours
The Company operates a business limited express daily during commuting hours
on the Honatsugi-Kitasenju, Kitasenju-Karakida, and other lines.
The passenger carriages on this special service have a relaxed hotel ambience
inside created by spacious 2.3-meter high ceilings and a combination of direct
LED and indirect fluorescent lighting. The thickness of the seatbacks has been
reduced to allow lots of leg space, and passengers can even cross their legs and
sit comfortably. The retractable tables in the armrests can be used to enjoy a
meal or drink or work on a laptop computer. Since all seats are reserved, the ride
is so pleasant that passengers can even forget that they are commuting.
Holiday
The luxurious, hotel-styled passenger cabin provides
an elegant start to the trip
On weekends and special holidays, the Company operates a sightseeing limited
express on the Kitasenju-Hakone-Yumoto line. Stepping into the passenger
cabin, passengers are greeted by a luxurious atmosphere that gets their holiday
started just a bit early.
Based on universal design, the cabins have wide aisles, seats for people in
wheelchairs, and toilets fitted with baby chairs—everything a family needs for
a safe and comfortable trip. Moreover, from May 2008, the Company started
operating a Bay Resort train on about 30 holidays annually that goes as far as
Shin-Kiba, making it more convenient for those visiting the Bay area. The new
service provides easy access to Odaiba, KidZania Tokyo in Toyosu, Tokyo Disney
Resort in Maihama, and other Bay area attractions.
09
Merchandising
Responsible for the department store business, Odakyu
Department Store Co., Ltd. sought to enhance the product range and mix at each of its stores through such actions as creating and marketing an original product line
“Only Odakyu.” The department store also endeavored
to expand revenues by aggressively initiating a variety of
sales measures, such as holding events to commemorate the 45th anniversary of the opening of the Shinjuku
store. The department store also commenced the total
refurbishing of the Shinjuku store in conjunction with
the installation of new escalators as the last stage of
renovations that have already included the expansion of
floor space of the foods section and the refurbishing of
the restaurant floor. In addition, the Odakyu Department
Store expanded and renewed facilities at its Machida
store during the fiscal year.
In the store business, Odakyu Shoji Co., Ltd., actively
worked to increase its business base by introducing 24hour operations at its Odakyu OX supermarkets as well
developing new businesses by opening a Seijo annex
store and a Sagamihara store. The company remained
committed to activities to improve merchandise and service quality, working hard to acquire ISO 9001 certification, an international quality standard.
In addition to these efforts, segment performance was
boosted by the consolidation of the profits of the home
centers operated by Beaver Tozan Co., Ltd. Consolidated operating revenues increased ¥5,344 million, or 2.1%,
to ¥260,911 million. Operating income rose ¥519 million,
or 11.1%, to ¥5,195 million.
Operating Results by Segment
Category
Odakyu Department Store in Shinjuku
Odakyu Department Store in Machida
Department Stores Odakyu Department Store in Fujisawa
Others
Total
Supermarkets, Convenience Stores and Others
Eliminations Total operating revenues
Odakyu Department Store in Shinjuku
10
Consolidated Results
(Year ended March 31, 2008)
Thousands of
Millions of yen
(%)
U.S. dollars
Operating Revenues
¥ 113,428
48,349
17,611
7,523
186,911
83,488
(9,488)
¥ 260,911
$ 1,142,048
486,801
177,312
75,750
1,881,910
840,595
(95,531) $ 2,626,974
Year-on-year
(0.3)
1.3
(0.7)
4.7
0.3
6.2
—
2.1
Odakyu OX at Seijyo
Real Estate
In real estate development, the Company and Odakyu
Real Estate Co., Ltd., sold detached houses centered on
the “Machida Yakushi-dai Hearty Hill” development while
focusing condominium sales efforts on “Garden Arena
Shin-Yurigaoka”. To increase profitability in this segment,
Odakyu Real Estate conducted aggressive sales of detached houses in such developments as “Odakyu Court
Avenue Sagamigaoka” and of condominiums in “Odakyu
Proudia Kurihira@”.
In real estate leasing, the Company worked to expand
its revenue base, opening the commercial facility “Odakyu
Oyamagaoka Shopping Center” in July 2008 and commencing operations of Odakyu Marche Shin-Yurigaoka
in March 2008. Odakyu Marche Shin-Yurigaoka is a
commercial facility comprising 12 stores in the extension
built onto Shin-Yurigaoka Station. Among other efforts,
the Company also focused on enhancing and revitalizing
facilities, including opening a refurbished food floor at
Honatsugi Mylord!, and a renovated restaurant floor at
Shinjuku Mylord. In addition, the Group took steps to
expand its operating base during the fiscal year. Odakyu
Nishi-Shinjuku Building Co., Ltd., acquired 95% of the
jointly owned Shinjuku Daiichi Seimei Building, which is
next to the Odakyu Century Building, while Odakyu Real
Estate actively acquired rental condominiums.
However, due to the decline in revenues in reaction to
the large sale of land by the Company in the previous fiscal year and to lower sales of condominiums, segment
operating revenues dipped ¥6,435 million, or 8.3%, to
¥70,906 million. Reflecting the decline in operating revenues, operating income fell ¥2,766 million, or 20.1%, in
operating income to ¥10,972 million.
In September 2007, to establish an organization that
will unify the Group’s real estate operations and make
them more efficient, the Company concluded a share exchange agreement with Odakyu Real Estate, solidifying
their parent company and wholly owned subsidiary relationship. Following this step, the Company transferred its
real estate operations to Odakyu Real Estate in October
2007. Based on these measures, the Company will now
be responsible for the planning and implementation of
complex and large-scale development projects, while
Odakyu Real Estate will act as the core company of the
real estate operations and be responsible for overall operations, including the development and sale of detached
houses and condominiums.
Operating Results by Segment
Consolidated Results
(Year ended March 31, 2008)
Thousands of
Millions of yen
(%)
U.S. dollars
Operating Revenues
Year-on-year
Category
Real Estate Development
Real Estate Leasing
Other operating revenues
Eliminations
Total operating revenues
¥ 35,321
39,302
1,879
(5,596)
¥ 70,906
$ 355,622
395,713
18,922
(56,343)
$ 713,914
(19.7)
9.4
(2.1)
—
(8.3)
TOPICS
Odakyu Oyamagaoka
Shopping Center Opens
The Odakyu Oyamagaoka Shopping
Center recently opened on a site about
1.5 kilometers from the north side of JR
East Railway’s Hashimoto Station. The
shopping center was developed on land
allocated to a land readjustment project
and has been leased solely to Mr Max
Corporation, the discount store chain.
Odakyu Oyamagaoka Shopping Center
Odakyu Marche Shin-Yurigaoka
Odakyu Marche
Shin-Yurigaoka Opens
The Company has opened a commercial complex with 12 stores recently built inside Shin-Yurigaoka Station. The complex enhances
the convenience of customers using the station, offering daily-use convenience and bakery stores, a cafe on the upper level for meeting
people, and a daily necessities store that supports women’s lifestyles.
11
Construction
Other Businesses
In terms of segment performance, work completed by
Odakyu Construction during the fiscal year declined
compared with the previous fiscal year, resulting in operating revenues falling ¥10,680 million, or 11.6%, to
¥81,184 million. Operating income dipped ¥1,303 million,
or 51.2%, to ¥1,240 million.
From the perspective of increasing corporate value by
further reinforcing the operations of Odakyu Construction,
the Company, Odakyu Construction Co., Ltd., and Daiwa
House Industry Co., Ltd., concluded a capital and business alliance in March 2008 that hinged on the sale to
Daiwa House of part of the Company’s stake in Odakyu
Construction. The sale transfer was made in April 2008. In
conjunction with this action, the Company concentrated
its railway maintenance business in Odakyu Setsubi Co.,
Ltd., from the point of view of establishing a uniform organizational structure to work with and to further enhancing
the safety of its railway operations.
Operating Results by Segment
Category
Balance of construction carried over
from year ended March 2007
Balance of orders received in year
ended March 2008
Total
Balance of completions in year ended
March 2008
Balance of construction carried over to year ending March 2009
Other operating revenues
Eliminations
Total operating revenues
Consolidated Results
(Year ended March 31, 2008)
Thousands of
Millions of yen U.S. dollars
(%)
Operating Revenues
Year-on-year
¥ 57,561
$ 579,551
(9.7)
89,522
901,346
(0.5)
147,083
1,480,897
(4.3)
84,462
850,405
(12.2)
62,620
630,492
8.8
1,177
(4,455)
¥ 81,184
11,850
(44,854) $ 817,401
16.5
—
(11.6)
In the hotel business, we changed the name of the former
“Century Hyatt Tokyo” to the “Hyatt Regency Tokyo”.
Operated by Odakyu Hotels Co., Ltd., “Hyatt Regency
Tokyo” was renamed in October 2007 with a view to bolstering the marketing power of the hotel. In addition, we
continued to upgrade and refurbish the hotel’s facilities.
We also began offering improved services at the Odakyu
Hakone Highland Hotel, operated by The International
Tourist Corporation, opening a bathhouse in April 2007
and spa facilities in October 2007.
In the restaurant business, Odakyu Restaurant System
Co., Ltd. and Giraud Restaurant System Co., Ltd. worked
to attract more customers by actively opening new restaurants and launching new types of businesses.
As a result, operating revenues in this segment increased ¥2,103 million, or 2.1%, to ¥102,106 million yearon-year. Because of the increased depreciation expenses
arising from the development of the hotel business, however, operating income decreased ¥824 million, or 28.5%,
to ¥2,071 million.
Operating Results by Segment
Category
Hyatt Regency Tokyo
Hotel Century Shizuoka
Odakyu
Hotel Century
Hotel
Business Southern Tower
Others
Total
Restaurants and Dining
Travel
Building Management and Maintenance
Others
Eliminations
Total operating revenues
Consolidated Results
(Year ended March 31, 2008)
Thousands of
Millions of yen U.S. dollars
(%)
Operating Revenues
Year-on-year
¥ 11,901
4,337
$ 119,824
43,666
(1.9)
4.2
3,577
36,013
(0.3)
10,103
101,725
29,918
301,228
22,442
225,955
7,517
75,691
20,709
208,508
28,017
282,086
(6,497)
(65,418)
¥ 102,106 $ 1,028,050
(1.7)
(0.8)
7.9
(0.6)
(3.2)
5.2
—
2.1
Note:The Century Hyatt Tokyo was renamed the Hyatt Regency Tokyo on October 1, 2007.
TOPICS
Membership-Based Rental Garden AGRIS SEIJO Starts Operations
The Company has started operations of AGRIS SEIJO, a membershipbased rental garden on a plot of artificial land above the railway tracks at the
West Exit of Seijogakuen-Mae Station. The AGRIS SEIJO site was created
to provide some greenery above the tracks and was made possible by
moving the Seijogakuen-Mae Station platform underground based on the
construction of multiple double tracks and overhead crossings. Situated
just one minute from the station in an ideal locale, the rental garden has 300
plot allotments on the approximately 5,000 square meter site and also has a
clubhouse complete with a scenic lounge.
12