With bullet trains going full throttle, JR Central posts record profit
NAGOYA -- Central Japan Railway Co. reported Wednesday that its group net profit jumped 32% on the year to 241 billion yen ($2.31 billion) in the nine months through Dec. 31, as a recovering economy spurred travel on its Tokyo-Osaka high-speed line.
The company, also known as JR Central, saw sales climb 4% to 1.24 trillion yen, also a record.
Revenue from its shinkansen bullet train service rose 4% to 845.1 billion yen. Total travel volume -- calculated by multiplying the number of passengers by distance traveled -- rose for both weekends and weekdays, increasing 4% to a record 37 billion passenger-kilometers. More people took to the rails as Tokyo Disneyland celebrated its 30th anniversary and the famed Ise Grand Shrine held special events to mark the upgrading of its buildings.
With shinkansen travel volume remaining high in early 2014, JR Central will likely outstrip fiscal 2012's record tally of 46.9 billion passenger-kilometers.
The company had been booking loss provisions to pay for a major upgrade on the Tokyo-Osaka shinkansen line. With the renovation work starting this fiscal year, the company is no longer required to book this expense.
While JR Central logged 35 billion yen in depreciation expenses for a magnetic-levitation test line in Yamanashi Prefecture that reopened in August, the decrease in loss provisions was able to offset the cost. The resulting 2% drop in group operating expenditures fattened its bottom line.
The company is maintaining its net profit forecast of 229 billion yen for the full year through March. Profit has been "higher than anticipated, but not by all that much," a company official said. Even so, JR Central is widely expected to beat the projection.