JR East's operating profit rose 13.6% to ¥262.9bn in the six months to September 30, on revenue up 8.4% to ¥1.585tn. The company credits more rail passengers and the effect of a fare revision.
Fares and riders
Passenger rail revenue reached ¥999.9bn, from ¥915.8bn a year earlier, and passenger-kilometres rose to 65.2bn from 63.9bn. JR East says it changed how it calculates passenger traffic this period and recalculated the prior year on the new basis. The transport segment's operating profit rose 24.0% to ¥177.5bn.
Net profit attributable to owners of the parent grew only 3.2% to ¥152.0bn. Property and hotel operating profit fell 13.8% to ¥41.2bn, because of lower profit on property sales, even as segment revenue rose 8.0%.
Higher guidance
JR East raised its full-year forecast from the guidance announced on April 30, saying rail use was strong and rail revenue ran ahead of plan. Operating profit is now forecast at ¥450.0bn (previously ¥429.0bn) and net profit at ¥265.0bn (previously ¥255.0bn). The board has resolved an interim dividend of ¥44 a share, against ¥35 a year earlier.
Property merger done
On October 1, JR East completed an absorption merger of its real estate subsidiary into Itochu's urban development subsidiary, under an agreement the four parent and subsidiary companies signed on April 15. The Itochu unit survives, and JR East holds 60% of the voting rights in the combined developer. Advisory costs are roughly ¥500mn. Goodwill and the fair value of acquired assets are not yet determined.
Governance cases
The filing says group companies face a Fair Trade Commission investigation into bid-rigging on Hokkaido Shinkansen construction, official guidance over a Hokuriku Shinkansen design tender, and a business suspension for improperly collecting travel-agency fees. These are separate matters. JR East has added full-time auditors at group companies.