Central Japan Railway sees improved outlook as subsidiary dissolves

Central Japan Railway Company announced its consolidated subsidiary, Nippon Sharyo Manufacturing, LLC, will complete its dissolution by the end of March 2026. This move is expected to positively impact Nippon Sharyo's financial outlook, leading to a revision in its consolidated financial forecast for the fiscal year ending March 31, 2026.

Nippon Sharyo’s revised forecast shows net sales increasing to JPY 98,000 million, operating profit to JPY 8,200 million, and ordinary profit to JPY 8,600 million. Net income attributable to owners of parent is projected to reach JPY 8,000 million, up significantly from the previous forecast of JPY 6,600 million. The dissolution is expected to allow previously recognized losses on valuation of shares to be treated as tax losses, decreasing income taxes.

However, Central Japan Railway anticipates recognizing an extraordinary loss of approximately JPY 2,200 million on a consolidated basis due to the reversal of foreign currency translation adjustment upon the subsidiary's dissolution. The company states that the overall impact on its consolidated financial results will be immaterial. Additionally, Nippon Sharyo will recognize deferred tax assets of JPY 2,197 million in the first half of the fiscal year ending March 31, 2026.