Now it is time. We will now start the earnings results briefing for the second quarter of the fiscal year ending December 2025. First, today's attendees. President Horikiri will be absent due to various circumstances. We apologize for this. The main speaker for today will be Managing Executive Officer Otsuki, who will speak on behalf of Mr. Horikiri. Let me introduce today's attendees. On your right is Furue, Senior Managing Executive Officer and the Head of Global Business Division, Nippon Express Holdings. In the center of the table is Otsuki, Managing Executive Officer and Head of Corporate Strategy Division. On the left side, Takezoe, President and Representative Director of Nippon Express. The Secretariat is Akaishi, Director, Executive Officer, and the Head of the Corporate Planning Department. Akaishi. Shinkawa, Senior Manager of the Financial Planning Department. I am Tsumori of the IR Promotion Office of the Management Planning Department.
I will be moderating today's meeting. Today's schedule: Mr. Otsuki will provide a 20-minute presentation on the financial results. Then we will have a Q&A session. The meeting is scheduled to end at 6:00 P.M. We will use two materials today, the financial results presentation materials and the financial results summary. They are available on our company website. Please note that today's briefing will be conducted in both Japanese and English via simultaneous interpretation and live streaming. We kindly ask for your understanding. We will now proceed with the explanation of the financial results for the second quarter of the fiscal year ending December 2025.
This is Otsuki speaking. Thank you very much for taking time out of your busy schedule to attend our earnings results briefing today. We would also like to express our sincere gratitude for your continued support to the company. Now, I would like to present an overview of the financial results for the second quarter of the fiscal year ending December 2025, as well as our financial full-year forecast. Please turn to page 5. The consolidated financial results for the second quarter of the fiscal year ending December 2025 are as described on the slide. Amid ongoing uncertainty regarding U.S. tariff policy, overall logistic demand during the second quarter remained subdued. Nevertheless, air forwarder ordering volume increased year-on-year in the first half, supported in part by robust cargo movement in the first quarter.
On the other hand, in ocean forwarding, due to the continuous shift to BCOs, our handling volume declined year-on-year. Domestic logistics also faced sluggish cargo movement. However, revenue increased due to factors including the consolidation of Simon Hegele in February this year, a company operating logistics business for medical devices and other products, mainly in Europe.
On the profit front, consolidated business profit and operating income increased, supported by higher earnings in Logistics Japan, driven by the rebound from deteriorating gross profit per unit in the forwarding business in the second quarter of the previous fiscal year, as well as higher profits in the Logistic Support segment due to solid performance of NX Logistics. JPY 9.6 billion in year-on-year increase in operating income was significantly higher than data business profit. This is primarily attributable to reactionally increase following the recognition of impairment losses in the previous year associated with the integration of special combined delivery service business with Meitetsu Transportation Co., Ltd. Furthermore, the amount from land sales this fiscal year was JPY 4.5 billion, with gains on sales totaling JPY 4 billion, an increase of approximately JPY 1 billion compared to the previous year.
On the other hand, the decrease in net profit compared to the previous year is mainly attributable to the increase in foreign exchange losses resulting from appreciation of the yen. Please refer to page seven and eight of the presentation material for a breakdown of factors of fluctuations in revenue and operating profit. Next, regarding the figures announced on May 13. Although we initially expected the impact of U.S. tariff policy to be limited in the first half of the fiscal year, overall logistic demand remained sluggish as many client companies adopted a wait-and-see stance. As a result, revenue and all profit metrics below business profit fell short of expectations. In addition, business profit fell short of expectations by approximately JPY 1 billion. However, a one-off positive impact from reversal of cost at Simon Hegele was included in the second quarter.
In real terms, the underlying shortfall is considered to be approximately JPY 2 billion. Please refer to page 6 of the presentation material. With regard to the performance by segment, there was a large shortfall in Logistics Overseas. I will explain details focusing on the Q- on- Q trends in the business profit. Please refer to page 9. As indicated in the presentation materials, despite quarter-over-quarter decline in revenue and increase in business profit, please note that the main factor contributing to the profit increase was a one-time reporting of fixed asset tax for the first quarter. In real terms, both revenue and profit decreased year-over-year. Please turn to page 10. We present a comparative analysis of quarter-over-quarter performance as well as against the earnings forecast by segment.
Amid these conditions, in addition to a sluggish economy, there has been a particularly notable downturn in our European region where Luxury Apparel, a major segment for our company, has performed poorly. Further details regarding the status of Logistics segment will be provided in the subsequent materials. Regarding other segments, Heavy Haulage & Construction segments underperformed due to delays in project progress. However, the Logistics Support segment continued to perform solidly following the strong trend observed in the first quarter. Additionally, with respect to adjustment amount, business profit exceeded forecast due in part to reductions in consulting costs related to head office projects. Please refer to page 11. I will now provide an overview of the status of each business within the Logistics segment. First, regarding the Logistics Japan segment.
While unit sales price and gross profits in international air forwarding declined quarter-over-quarter, strong intra-Asia cargo movements led to increased volumes, resulting in revenue levels comparable to those of the first quarter. Next, in ocean forwarding. Although gross profit in the business decreased quarter-over-quarter, both revenue and profit increased driven mainly by growth in overseas moving business. With respect to logistics, there have been no significant changes in domestic logistics, and the overall trend remains sluggish. However, quarter-over-quarter decrease in profit is attributable to factors such as reactionary decline in following the peak moving season and the increase in personal cost, resulting in a profit level that was roughly in line with our expectations.
As a result, the Logistics Japan segment achieved generally expected level of profit in the quarter, largely attributable to one-off expense recognition of fixed asset taxes versus the forecasted JPY 3.9 billion increase in profit quarter-over-quarter. Next, regarding the Logistics Overseas segment. Although air forwarding volumes increased Q- on- Q, a decline in unit sales price, gross profit per unit due to a decrease in long-haul shipments from Asia to the U.S. resulted in an outcome below the profit increase forecast. Although the volume handled in ocean forwarding increased quarter-over-quarter, revenue declined due to lower unit sales prices. On the other hand, while unit gross profit also decreased, reductions in outsourcing expenses, such as vehicle chartering costs, led to an increase in profit both quarter-over-quarter and year-over-year.
In Logistics, despite increased revenue from the addition of Simon Hegele, both quarterly and year-over-year profits declined due to decrease in transactions with existing clients in Europe and higher initial costs associated with the start-up of new warehouse in South Asia and Oceania, resulting in overall downturn. Moreover, while cargo-partner has experienced an increase in air freight from Asia to Europe, primarily driven by e-commerce related shipments, its ocean freight forwarding within Europe has remained sluggish, resulting in decreased profits both quarter-over-quarter and year-over-year. As a result, the Logistics Overseas segment maintained profit levels comparable to the first quarter, falling short of the projected profit increase by minus JPY 3.4 billion.
Details regarding the handling volume and unit gross profit trends in the forwarding business can be found on pages 13- 15 of the material, and additional information on changes in the external environment is provided on pages 2- 3 of the supplementary documents for your later reference. Next, please refer to page 17. With respect to the full year consolidated earnings forecast, taking into account the results for the first half and comprehensive assessment of prospects, we have decided to make downward revision to our forecast for revenue and all profit lines are below the business profit.
It should be noted that the operating profit increased by JPY 20.9 billion year-on-year, which is significantly larger than business profits, primarily due to rebound from the previous year, which saw [inaudible] impairment loss from the integration of Meitetsu Transportation in the special combined delivery service and an impairment loss in the domestic pharmaceutical business, as well as an increase in gains from land sales during the current fiscal year. Specifically, the value of land sold this term was JPY 9.2 billion, with gains from such sales reaching JPY 7.3 billion, representing an increase of JPY 2.9 billion in gains from sales of land compared with the previous year. On the other hand, comparatively, modest increase of JPY 8.2 billion in net income over the previous term, despite higher operating income, is primarily attributable to an increase in foreign exchange losses due to yen appreciation.
Furthermore, while a special loss is anticipated in relation to the recently announced implementation of the Second Career Support program, this has not been incorporated in the current forecast. Once the amount is finalized, we plan to provide an updated figure around mid-November. Please refer to page 18. We are comparing the status of forecast revisions by business segment. As explained earlier, the impact of U.S. tariff policies has served as a negative factor, resulting in sluggish logistic demand during the second quarter. Meanwhile, given that negotiation agreements are currently progressing in various countries, including Japan, we are assuming in our earning forecast that international logistic demand will show signs of recovery going forward. Although we anticipate that a full-scale rebound will require a certain amount of time. Regarding the European region, which has seen substantial adjustments, we are implementing cost control measures through structural reforms amid ongoing economic stagnation.
Furthermore, with regard to Logistics Japan, we have revised our outlook downward as the recovery of international logistics is expected to require some time, and domestic logistic is also projected to remain sluggish for the foreseeable future due to weak demand recovery. In this context, to secure short-term performance, our primary focus will be placed on space control in the forwarding business and the maximization of our internal resource, while appropriately allocating our operational workforce. Through these measures, we aim to implement cost controls in response to demand trends. In addition, expanding warehousing capacities in the U.S. and newly established production bases, as well as capturing trade lanes arising from supply chain modifications, will be key focus areas, and we are diligently preparing and responding to these changes.
While making every effort to secure our short-term performance, we will continue to accelerate business growth in the global market, restructure our Japanese operations to achieve our long-term vision, advancing organizational and business structure reforms accordingly. Please refer to pages 4- 13 of the supplementary materials for further details on the segment overview for your later reference.
Next, please turn to page 23. This is the overview of the progress of the business plan initiatives. First, on our business growth strategy, the results for key industries are provided in the material. Technology has significant impact of the liquidation of our U.S. subsidiary in the previous year, as well as the Lifestyle segment, which was affected by the loss of major customers' ocean forwarding business due to the shift to BCO, both recorded lower results year-on-year. Additionally, in the second quarter, the slow movement of the international logistics resulted in a slowdown in growth across other industries as well. Please see page 24. Next, with regard to our business segments, the volume performance of Air and Ocean F orwarding, as well as sales from Warehouse and Distribution Services are presented here.
Air transportation, according to IATA's report, international cargo volume for the cumulative period from January to June increased by 3.5% year-on-year. Partly due to the cautious stance of many companies over U.S. tariffs, logistics demand for international air freight has remained subdued compared to initial projections. Furthermore, air freight rates have been trending downward in line with falling jet fuel prices and prevailing demand trends. Under these circumstances, our handling volume increased by 1.3% year-on-year, and excluding the impact of e-commerce-related cargo, our performance is largely in line with market movements. Next, marine transportation. Demand for shipments from Asia to U.S. has fluctuated due to U.S. tariff policy. However, cargo flows on other major trade lanes have remained stable. As a result, the total volume across all major trade routes increased by 6.5% in five months from January to May.
Freight rates are declining sharply on routes from Asia to the United States due to a softening of supply-demand conditions. Meantime, other key lanes remain stable. However, concerns remain on potential rate declines due to ongoing deliveries of new vessels, further relaxing demands and supply balance. In these circumstances, our handled cargo volume decreased by 5% due to factors such as customer shifting to BCO. Next, regarding sales from warehouse and distribution operations. We recorded year-on-year increase of 4.7%, which we attribute to the effectiveness of our ongoing initiative and investment. Our expansion of end-to-end solutions driven by account management focusing on key industries aims to position logistics as the core business while increasing the volume handled through related forwarding services.
Currently, in both Japanese and non-Japanese global accounts, there has been increasing number of cases where high-quality logistics operations in Japan are recognized, leading to overseas business opportunities, as well as cases where forwarding services transaction expanding to logistics. We will continue our efforts to expand handling volumes from both logistics and forwarding business perspectives. Please see page 25. This is about the restructuring of our Japan business. We are striving to improve our operating margin through these three initiatives outlined in the material. We have started to see positive results such as end-to-end solution and price revisions to offset increased labor and other costs, as well as decrease in handling of infectious disease-related supplies. OP increased and operating margin improved by 0.6% year-on-year to 3.1%.
Furthermore, leveraging the in-house company system at the Nippon Express as a catalyst, we will further accelerate the optimization of allocation of management resources to various domestic markets to enhance profitability and capital efficiency. Next, please refer to page 26. Key initiatives to achieve our business plan objectives. While we recognize that our initiatives such as strengthening the account management structure are key steady progress. We are making steady progress. We believe it is necessary to further accelerate and enhance the execution of our strategies and measures in the business plan in the mid to long term, in addition to short-term actions. As I mentioned, we anticipate changes to the supply chain may occur in the future. We consider it increasingly important to address our customers' challenges through end-to-end solutions encompassing the entire supply chain.
Furthermore, to enhance corporate value, we will steadily enhance balance sheet management, including a review of our asset holding strategies, the revision of our capital policies, and the strengthening of our business portfolio management. In order to achieve the current business plan target, we are committed to achieve our interim targets for 2026 operating profit of at least JPY 100 billion and ROE of at least 8%. The most critical factor is to accelerate the strategies and the initiatives outlined in the business plan. With regard to our operating profit targets, we will implement additional measures while using the now JPY 70 billion in operating profit as a baseline and to aim to achieve over JPY 100 billion through three key initiatives. Please see page 27. First, as the main driver of revenue growth, we will expand business profits by promoting the strategies and measures specified in our business plan.
Second, we will start measures to reduce indirect costs to improve the SG&A expense ratio by approximately 1 percentage point from the fiscal 2024 actual, targeting around 5% by 2028. In addition, we recently disclosed the Second Career Support program. This initiative is intended not only to optimize the age structure of the company and rejuvenate the organization, but it will also lead to a certain reduction in the personnel expenses. Thirdly, land sale. We plan initial transactions of more than JPY 50 billion. We will accelerate this initiative and expand the sales amount for the fiscal year 2026 to approximately double of the fiscal year 2025. Through these three initiatives, achieving the operating profit of JPY 100 billion will not only improve ROE, but also contribute to the success of our current business plan. Please refer to page 29.
Lastly, shareholder returns for the fiscal year ending December 2025. There are no changes to our dividend forecast, with interim and year-end dividend each at JPY 50, totaling JPY 100. The dividend payout ratio at 62.3% with the share buyback up to JPY 50 billion. The total shareholder return ratio amounts to 187.4%. We project a cumulative total shareholder return ratio of 154.7% for the two-year period from fiscal 2024. We will continue to pursue enhancement of corporate value, achieving the targets of business plan, and further enrich and enhance shareholder returns. This concludes the overview and other explanations of the financial results for the second quarter of the fiscal year December 2025. That is all for my presentation. Thank you.