JR West’s April-June Net Profit Rises 4% Despite Derailment

Aug. 9–TOKYO — West Japan Railway Co. said Tuesday its group net profit in the April-June quarter rose 4.0 percent from a year ago to 13.87 billion yen, despite the fatal April 25 train derailment and crash in Amagasaki, Hyogo Prefecture.

In the first three months of the 2005 business year, JR West said its pretax profit jumped 16.7 percent to 24.75 billion yen on operating revenues of 293.71 billion yen, up 0.5 percent.

JR West booked 3 billion yen in accident-related losses, including 1.8 billion yen for consolation payments to families of the deceased and the medical treatment of injured passengers.

But the railroad operator achieved the profit gain due in part to a cut in personnel expenses.

JR West traced the fatter revenues mainly to greater sales at its travel agency segment and retail business subsidiary, which outweighed the impact the massive accident inflicted on its mainline passenger business.

But JR West did not revise downward its profit and revenue projections for the full year to next March 31, saying, “It is difficult at this juncture to precisely estimate the size of the expense we will incur in the coming months due to the derailment.” But the railway operator acknowledged that it “will likely incur a sizable expense due to the derailment” on the commuter train on its Fukuchiyama Line.

As a result, the company left unchanged its projections for group net and pretax profits for the 12-month period to March 31 at 49 billion yen and 82 billion yen, respectively, while estimating its operating revenue at 849 billion yen.

The accident forced a two-month halt to JR West’s train operations on the line between the stations of Amagasaki and Takarazuka until June 18.

The accident killed 107 people, including the train driver.

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