[Company analysis] West Japan Railway Company (西日本旅客鉄道)

「West Japan Railway Company (西日本旅客鉄道)」is the largest railway company in western area of Japan. It is one of the three Japan's representative railway companies(「East Japan Railway Company(東日本旅客鉄道)」,「West Japan Railway Company(西日本旅客鉄道)」and「Central Japan Railway Company(東海旅客鉄道)」which inherited the railway business from「National Railways(日本国有鉄道)」on April 1, 1987. This company is commonly known as "JR West Japan" and the English abbreviation is "JR West". The number of consolidated employees is approximately 47,842.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	West Japan Railway Company
Company name (Japanese)	西日本旅客鉄道
Date of establishment	Wednesday, April 1, 1987
Headquarters location	〒530-8341 大阪市北区芝田二丁目4番24号
Capital	100,000
Consolidated sales	1,529,308
Consolidated operating profit	196,946
Consolidated total assets	3,237,596
Consolidated capital	1,179,861
Capital adequacy ratio	36.4%
Consolidated number of employees	47,842

 

 

 

2. Summary and Features

 
In Japan,「West Japan Railway Company」has regional railway lines mainly in the three prefectures of Hokuriku, the Kinki region, and the Chugoku region. The total operating distance is 5,007.1km, which is the second longest level among the Japanese railway companies after「East Japan Railway Company」. The inter-city transportation is mainly handled by the "Sanyo Shinkansen(山陽新幹線)" and "Hokuriku Shinkansen(北陸新幹線)", and the conventional limited express trains and high-speed trains play support roles.

 

In total sales,「JR West」is second largest railway company in Japan, after「JR East」. The core of sales is the demand for commuting to work and school in the Keihanshin area, which is called the second largest economic zone in Japan. Unlike the Tokyo metropolitan area where there were no competitors comparable to JR, the Keihanshin area was called the "private railway kingdom", and so many private railways competed with each other. Thus, from its establishment,「JR West」has continued to compete with private railways such as「Kinki Nippon Railway(近畿日本鉄道)」,「Hankyu Electric Railway(阪急電鉄)」, 「Hanshin Electric Railway(阪神電気鉄道)」,「Sanyo Electric Railway(山陽電気鉄道)」,「Nankai Electric Railway(南海電気鉄道)」and「Keihan Electric Railway(京阪電気鉄道)」. 

In profitability, 「JR West」was outperformed by not only「JR East」but also「Central Japan Railway Company.  however,「JR West」has great stability based on the blance between conventional line and the Shinkansen. So their sales do not  depend heavily on specific service or area. In addition to their railway business and transportation business(buses and ships), they also operate commercial facilities in the metropolitan area, including station buildings, retail business, restaurant business, tourism business, real estate development, venture capital through group affiliates.

 

 

Currently,「JR West」is making capital investments mainly on the "Sanyo Shinkansen" and "Hokuriku Main Line" and limited express trains and routes near Hanshin, in order to enhance profitability. In particular, considering the "Fukuchiyama Line derailment accident" in 2005, they have set the medium-term management plan goal to improve safety in the railway business. As an aside, there is「Nishi-Nippon Railroad Co., Ltd.(西日本鉄道株式会社)」in the Fukuoka area, which has a name similar to「JR West Japan(JR西日本)」in Japanese. But it is a completely separate company with no direct connection.

 

 

 

3. Major Business

 

■ Transportation industry

■ Distribution industry

■ Real estate industry

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		1,441,411	1,500,445	1,529,308
Consolidated operating profit		176,392	191,365	196,946
Consolidated total assets		3,007,852	3,072,965	3,237,596
Consolidated net assets		1,032,610	1,116,304	1,179,861
Breakdown of sales	Transportation business	929,104	950,887	953,913
	distribution business	233,908	239,822	245,525
	Real estate business	109,590	139,680	148,500
	Others	168,808	170,055	181,368