Business / Corporate

Flooded bullet trains could cost JR East ¥11.8 billion

JIJI, Staff Report

East Japan Railway says the book value of its Hokuriku Shinkansen bullet trains flooded by Typhoon Hagibis stood at ¥11.8 billion as of the end of September.

Ten 12-car Hokuriku Shinkansen trains at a JR East-managed switching yard in the city of Nagano were damaged by flooding from the nearby Chikuma River.

Eight of the 10 trains are owned by JR East, one of the two operators of the high-speed Hokuriku Shinkansen line, and two by West Japan Railway Co., or JR West, the other operator.

If JR East scraps the eight trains, it would be forced to report a related loss of up to ¥11.8 billion.

The company expects that Typhoon Hagibis dented its revenue by ¥12 billion in October. JR East, however, has not changed its earnings forecast for the business year to next March as it has yet to assess the full damage from the typhoon.

JR West plans to report the book value of ¥3 billion for its two flooded Hokuriku Shinkansen trains as an extraordinary loss.

JR West estimates it suffered a revenue fall of ¥2.9 billion from the typhoon, while Central Japan Railway Co. (JR Tokai) is citing ¥3 billion.

“We suffered a lot of damage from the typhoon and have still been unable to fully calculate relevant costs,” Ryoji Akaishi, executive director of JR East, said Monday.

He indicated that JR East still doesn’t know when it will finish calculating the damage from the typhoon.

It costs about ¥300 million to produce one Hokuriku Shinkansen train car.

The damage had forced JR East and JR West to partially suspend the line, but operations on the entire route were resumed as of Friday.

For the April-September first half of the current business year, group revenue at JR East rose 2.1 percent from a year earlier to ¥1.52 trillion.

Operating profit increased 1.5 percent to ¥296.5 billion and net profit rose 5.4 percent to ¥188.5 billion, the railway operator revealed.

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