Public-Private Railway Operator to Pay Dividend

By Kyodo News International, Tokyo

Apr. 19–TOTTORI — A public-private railway operator in western Japan is considering paying dividends to its stakeholders at the request of its largest shareholder, Tottori Prefecture, officials familiar with the matter said Wednesday.

Chizu Express Co., based in Tottori City, is expected to obtain approval for paying dividends from the board Thursday, with the plan likely to be finalized at a general shareholders meeting in June, company officials said.

It will be the first Japanese public-private railway operator to pay dividends, according to officials at the Ministry of Land, Infrastructure and Transport.

Tottori Prefecture asked Chizu Express late last month to consider paying dividends as part of efforts to reassess the prefecture’s assets.

Tottori Gov. Yoshihiro Katayama, who doubles as a director of the railway operator, says it is important for a stock company to return part of its profits to its customers and stockholders.

The railway operator has booked profits for the last seven years.

Chizu Express started operating in 1994 with capital of 450 million yen. Its shareholders include Tottori, Okayama and Hyogo prefectures, and municipalities as well as financial institutions.

For fiscal 2004, the company reported 500 million yen in pretax profit and 300 million yen in net profit.

It plans to use funds — net profit minus internal reserves for capital investment — to pay dividends, company officials said.

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