IR

Financial Results
NON-CONSOLIDATED FINANCIAL HIGHLIGHTS FOR SIX MONTHS ENDED SEPTEMBER 30, 1997

EAST JAPAN RAILWAY COMPANY(9020)

  November 12, 1997
Millions of Yen
  Six Months ended September 30, 1996 Six Months ended September 30, 1997 change(%)
Operating Revenues 986,912 974,370 -1.2
Net Income 34,989 32,257 -24.6
 
  March 31, 1997 September 30, 1997 Change(%)
Total Assets 6,716,092 6,727,863 -0.4
Total Shareholders' Equity 692,526 714,579 3.2
Figures are rounded down to the nearest million.

Overview of Interim Results and Outlook

During the first half of the fiscal year, the Japanese economy was impacted by steep drops in domestic demand, such as consumer spending and housing construction, in the wake of the April 1997 consumption tax hike. This has resulted in an unfavorable outlook for the economy, which had been posting a gradual recovery. In this environment, passenger volume at JR East declined compared with the same period a year earlier.

Due to the decline in passenger volume and the transfer of certain directly operated stores to JR East group companies and the closing of underperforming stores, operating revenues decreased 1.3% to 974.3 billion yen. Operating expenses increased due to the termination of special reductions in property taxes as well as amortization of a payment required upon the merger of Japan Railways Group Mutual Aid Association into the Welfare Pension (national pension). Non-operating expenses were down sharply as losses on early redemptions of certain bonds and interest expenses fell. As a result, ordinary income decreased 6.8% to 61.4 billion yen and net income was down 7.8% to 32.2 billion yen.

For the second half of the fiscal year, the outlook for the Japanese economy remains uncertain. JR East will take aggressive revenue-expansion actions that make effective use of the Akita hybrid Shinkansen, the new Shinkansen to Nagano and other services, work to strengthen the Company's financial position, and take other measures to make operations more efficient. In this manner, the Company will make efforts to achieve the goals set forth for the current fiscal year.