Now is the time to start. I'd like to begin the 2024 financial year financial results presentation. First of all, I'd like to introduce you today's attendees. On the front row to the right is President Satoshi Horikiri, CEO and Representative Director of Nippon Express Holdings, and Director and Executive Officer. To the left of President Horikiri is Shinjiro Takezoe, President, CEO and Representative Director of Nippon Express. On the right-hand side of the back row is Tadahiro Furue, a Senior Managing Executive Officer of Nippon Express Holdings and in charge of Global Business Headquarters. To the left is the Corporate Strategy Division, Mr. Hideshi Otsuki. From the secretariat, we have Mr. Akaishi of the Corporate Strategy Division and Shinkawa of Financial Planning Division, and I myself is going to be the emcee. Today's explanation is about the financial presentation.
We have the Q&A session. We'd like to end around 18:00. The materials we will be using today are three types: financial results briefing materials, summary of financial results, update on our efforts to increase corporate value. Please refer to the information posted on our website. Please note that from now on, the information session will be held in the form of a live broadcast in both Japanese and English with simultaneous interpretation. Now, I'd like to start by asking President Horikiri to explain our financial results for fiscal year ending December 2024. Thank you, President.
Thank you for the kind introduction, and thank you for taking time out of your busy schedule to attend our financial results briefing today. We'd also like to express our sincere gratitude for your ongoing continued patronage.
I would now like to explain the overview of our financial results for the fiscal year ending December 2024, our full year earnings forecast, and our efforts to increase our corporate value. First, please turn to page 5 of the document for an overview of the financial results. Consolidated results for the fiscal year ending December 2024 are as stated in the materials. Global logistics demand has continued to recover since the second quarter, and revenue increased due to the addition of cargo-partner from this fiscal year. On the other hand, in terms of profits, operating profit and all other profits decreased due to factors such as increased labor costs and the impact of reduced handling of the infectious disease- related supplies.
Furthermore, while fourth quarter operating profit were lower than the previous year, this was due to a JPY 5.6 billion decrease in personnel-related costs resulting from the reversal of accrued paid leave liabilities from the previous year. As a result, profit actually increased and the recovery in profit continues following the third quarter. In addition, the increase in operating profit of JPY 5.3 billion compared to the previous year is due to the absence of an impairment loss of JPY 8.2 billion in the previous year on fixed assets of subsidiary NX NP Logistics and the domestic pharmaceutical business.
In addition, although revenue from the domestic pharmaceutical business has been expanding, it has not yet turned a profit, and we have recorded an additional impairment loss of JPY 2.9 billion in this fiscal year, following JPY 19.9 billion in the fiscal year before last and JPY 3.1 billion in the fiscal year ended March.
On the other hand, our handling of the pharmaceutical industry, both domestically and internationally including forwarding, has grown significantly, and we will continue to focus on this as a key industry. Next, in terms of the forecast figures announced on November 12, sales revenue was at the expected level, but profits fell short of expectation. The main reason for the large decline in operating profit compared to business profit is due to an increase in impairment losses as well as disposal losses from the demolition of old earthquake- resistant facilities. Please see page 6. As stated in the materials, there was a large downturn in logistics, Japan and overseas. We will explain the details of this along with QoQ comparison. Please turn to page 9.
In terms of business performance trends, revenue and business profit increased YoY, but the increase in profits was below the expected amount. Please turn to page 10. We show a comparison of fourth quarter versus third quarter by segment and with earnings forecasts. Given that air forwarding is in its peak season, we had expected increased revenue and profits, mainly in the logistics segment. However, although revenue and profits increased in Japan, business profit fell short of expectations. Overseas sales and profits decreased. I will now explain the status of each business in this Logistics segment. Please turn to page 11.
In the Japan segment, logistics saw an increase in sales and profits QoQ due to increased year-end demand by international air forwarding. So handling volume fell short of expectations, resulting in profits remaining at the same level as in the third quarter, resulting in a decline of JPY 2.9 billion in segment profits. In overseas air forwarding, handling volume was lower than expected, and unit gross profit also declined. In addition, for logistics, profits remained at the same level as in the third quarter due to spot costs and other factors, resulting in a decline in segment profits of JPY 3.3 billion. Please turn to pages 13- 15 of the document for details on the forwarding business handling volume and gross profit unit price. Please turn to page 17. Next, I would like to explain our financial forecast for 2025.
Regarding the outlook for the global economy this fiscal year, geopolitical risks continue, and the business environment remains uncertain. However, we expect that logistics demand, both domestically and internationally, will continue to recover slowly, and we anticipate increased revenue and profits compared to the previous year. The increase in operating profit compared to business profit is due to the domestic pharmaceutical business that I explained earlier, as well as the rebound from the impairment loss recorded in the first quarter following the integration of this special cargo business with the Meitetsu Transportation Co., Ltd. Please see page 18. We present our earnings forecasts by segment.
Within this, the Logistics and Japan segment is expected to continue to see increase in labor cost and other costs, but we are anticipating increased revenue and profits as we proceed with rate revisions, expand our forwarding business, and improve the profitability of our logistics business. Additionally, overseas, we expect sales and profits to increase due to the expansion of the forwarding business, and cargo-partner is also forecasting sales and profits to increase. We will continue to promote PMI and strive to create synergies. As previously announced, we have also completed the acquisition of shares in Simon Hegele, so-called SH, which operates a logistics business for medical equipment and other products primarily in Europe. Although the initial sales of the acquisition is not large, we believe it will contribute to the expansion of business performance. Next, please turn to page 23.
I would like to explain the status of our management business plan. First, regarding our business growth strategy, our track record in key industries is as described in the materials. With the exception of the technology sector, which was heavily affected by the sluggish Chinese economy, we believe that we have achieved our 2024 targets and are seeing generally solid performance. We will further strengthen our efforts and strive to improve profitability, particularly in the logistics business. Please see page 24. Next, in terms of business access, the actual volume performance of air and ocean forwarding and sales of warehouse delivery, et cetera, are as stated in the materials. Regarding aviation, international cargo volume has continued to increase YoY with International Air Transport Association statistics reporting an increase of 11.3% for the whole of 2024 compared to the previous year.
This is due to factors such as an increase in EC- related cargo and restrictions on maritime transport due to the situation in the Red Sea. Under these circumstances, our handling volume increased 32.9% YoY and was only 7.4% higher excluding impact of cargo-partner. However, in the fourth quarter alone, it increased 8.7%, showing an upward trend. Additionally, airfare overall remain at high levels, and we do not expect any major changes in the near future. As for shipping, cargo movements on major trade lanes continued to increase YoY, increasing 6.1% cumulatively from January to October. On the other hand, our company's handling volume increased 24.8% YoY due to the acquisition of cargo-partner. But due to the impact of a return to direct shipping with shipping companies, excluding the impact of cargo-partner, the increase was only 2.3%.
In addition, although freight rates are currently trending at high levels, we believe it is necessary to keep a close eye on future trends, such as changes in the supply and demand balance due to developments in the Red Sea. Next, sales from warehousing distribution increased by 6.7% YoY. We believe that the measures and investments we have implemented thus far are beginning to produce results, and we will continue to strengthen our efforts. Please turn to page 25. Next, with regard to restructuring our Japanese business, we aim to improve our operating profit margins by promoting three initiatives: transforming into a more customer-oriented company, continuing and deepening the strengthening of our Japanese business, and continuously reforming and reviewing our business foundation.
Although we have seen results from providing end-to-end solutions based on account management and revising fees, these have not yet been enough to absorb the impact of increased labor costs and other costs, and the decrease in the handling of infectious diseases- related supplies, resulting to a decrease in operating profit and a decline in the operating profit margin of 3.2%. Under these circumstances, we will strengthen our efforts to restructure our Japanese business and in relation to our continuous transformation and review of our business foundation, we would like to take advantage of Nippon Express' transition to an in-house company system to accelerate the optimization of managed resources in accordance with the characteristics of different domestic markets, thereby improving profitability and capital efficiency. Please see page 27 regarding shareholder returns for the fiscal year ending December 2024. We have set an annual dividend of JPY 300.
As a result, dividend payout ratio will be 82.3% and the total return ratio is 113.6%. As we have already announced, we are conducting share split at the ratio over 3:1 . For the fiscal year ending December 2025, we forecast an annual dividend of JPY 100. In addition, as announced today, we will acquire treasury stock up to a maximum of JPY 50 billion. We will explain the background of this decision later. I have now explained the summary of our financial results. Please turn to page 29 of the document. We have listed the main initiatives aimed at achieving our management plan. Efforts such as strengthening our account management system are progressing, and as explained in the progress of our management plan, we believe that the results are steadily emerging.
However, at the current level of performance, the hurdles for achieving the target of JPY 150 billion in business profit and ROE of 10% or more for the final year of the management plan are high. We believe that it is necessary to accelerate and further strengthen the implementation of the strategies and measures formulated in our management plan.
Under these circumstances, in order to achieve the goals of our management plan and realize our long- term vision, we have been considering strengthening our efforts to improve corporate value and have now decided on the details of these updates. The following is an overview. Please see page 2 of the initiatives to increase corporate value. To date, we have been implementing reforms such as transitioning to a holding structure and optimizing a business portfolio in order to become a logistics company with a presence in the global market.
However, our PBR is currently below 1x . In order to realize our long-term vision, we believe that we need to take on a different level of effort than before to step up our transformation efforts and have therefore reviewed our plan. In this review, we have decided to set interim targets for fiscal 2026, strengthen balance sheet management including a review of our asset holding strategy, and review our capital policy and strengthen the promotion of our business portfolio management. Please see page 3. First, regarding the analysis and evaluation of the current situation. The current ROE is lower than recognized cost of shareholders' equity. We recognize this as a main factor keeping the PBR at the current level. Please see page 4. This is a list of additions that will be made to our initial five-year cash allocation plan to further enhance our corporate value.
As a broad framework for this initiative, we will pursue three approaches to secure and further expand equity spreads. As for the first approach, we will shift to high- profit businesses and replace assets by selling low- profit real estate and other assets, initially aiming to sell more than JPY 50 billion. Furthermore, we will review our commercial real estate holding strategy and continue to consider ways to increase cash inflows, including sales and lease backs. Next, in promoting our business portfolio strategy, we will shift to growth businesses and streamline low- profit and noncore businesses in accordance with criteria for both quantitative and qualitative evaluation. We are currently in the process of identifying target businesses and companies, but we will not disclose specific company names or target values at this time. We would like to implement these measures in order starting with projects that are ready.
For more details on the promotion of business portfolio management, please refer to pages 7-10 of the documents later.
Next, in order to reduce cross-shareholdings, we will increase this by JPY 40 billion through the sale of retirement benefit trust shares and accelerate the dissolution of cross-shareholdings. We plan to use proceeds from the sales I explained above to invest in growth areas, including M&A, to advance our business portfolio management and strengthen shareholder returns. With regard to growth investments, including M&A, we will add JPY 200 billion to our previous plan. The M&A of cargo-partner and Simon Hegele have already used up most of the JPY 200 billion of M&A funds initially planned, but we believe that further M&A is necessary to achieve our management plan. First, we will increase growth investment funds by JPY 200 billion and continue to actively consider M&A. The second approach, which involves optimizing our capital structure and utilizing appropriate financial leverage.
We will leave our capital ratio at approximately 35% in our capital policy unchanged, and we will add JPY 50 billion- JPY 100 billion in share buybacks assuming we maintain our A A credit ratings. As disclosed today, in addition to the initial plan, we have decided to acquire treasury shares up to a maximum of JPY 50 billion in 2025. Next, with regard to external borrowings necessary to implement growth investments, we expect to raise an additional JPY 200 billion- JPY 250 billion and would like to optimize our capital structure through debt equity control. Regarding our shareholder return policy, we have maintained a stable dividend policy and have never reduced our ordinary dividend. We have set targets for our shareholder return policy and have pledged to implement stable and continuous dividend.
We have now decided to take this step further and introduce a minimum dividend amount of JPY 100 per share per year based on the dividend amount for FY 2024. The third approach is reducing our cost of equity capital, which we hope to use to reduce business risk and advanced dialogue with the market and further our efforts to increase corporate value in the future.
Through the three approaches I have explained, we aim to expand the equity spread and improve ROE and PER, and as a stepping stone, achieve PBR of 1x or higher. Next, for reference, please take a look at page 13. We believe that utilizing M&A is an important factor in our growth and increasing our corporate value. In this context, we view CP's PMI as a litmus test, and we would like to explain the situation together with a review of past M&As.
From 2012- 2024, we carried out 10 M&A transactions amounting to JPY 300 billion. The proportion of M&A in our consolidated financial results is increasing, and we believe this is contributing to strengthening our management base. On the other hand, business plans did not progress as initially anticipated. There were some projects which impairment losses were recorded. We believe it is important to analyze the factors behind this and use these findings to make improvements such as strengthening our PMI system. Assessing past M&A activities, we believe that acquisition of a logistics space for key industries and a network of bases in untapped area has strengthened our global network, which in turn has led to a stronger customer base. On the other hand, we now recognize our initial selection of target companies, there was a mismatch with the value creation scenario and overall optimization.
We also recognized that the PMI structure was left to local matters resulting in limited synergies for entire group or lack of speed. Please see page 14. Based on this reflection, we have established an M&A execution system and are strengthening our PMI system centered around Global Business Headquarters to generate synergies across the entire group and are proceeding with PMI for each company, including CP. We are also working to strengthen our response capability in carrying out M&A, including human resource development, and hope to utilize this in our future M&A strategies. Next, please see page 5. We are presenting a balance sheet taking into account updates over initiatives. Here, the intermediate target of achieving an ROE over 8% for fiscal 2026 is set and as you can see on this document. Plan value for fiscal 2028, the final year of the management plan have not changed.
We aim to achieve the initial planning targets. Please see page 6. Taking into account of the cash allocation for 2024, there has been some changes from the initial numbers and also the historical information including the sale of the real estates are also listed here. I have provided an overview of our financial results for the fiscal year ending December 2024, as well as an update of our efforts to improve corporate value.
In order to achieve the goals of our current management plan and our long-term vision of achieving sales of revenues of JPY 4 trillion, business profit ratio of over 5%, and ROE over 10%. It is extremely important not only to expand our scale but also to properly replace assets and improve capital efficiency. At the same time, we aim to create a virtuous cycle by linking our efforts to strengthen shareholder returns to improved ROE.
We will consider this update as part of our future strengthening measures and will continue to consider and strengthen them. As we work together as a group towards realizing our long-term vision, we appreciate your continued support. Thank you very much.