To Our Shareholders
To Our Shareholders
The following is a brief report on the performance of Seino Holdings Co., Ltd. for the fiscal year ended March 31, 2023, our 102nd term (from April 1, 2022 to March 31, 2023).
During the fiscal year under review, although Japanese economy started to exhibit evidence of normalization of socio-economic activities accompanying the easing of restrictions on activities due to the novel coronavirus disease (COVID-19), giving rise to expectations of an economic recovery, the outlook has remained unclear due to soaring prices for raw materials, resources and energy resulting mainly from the impact of the situation in Ukraine, in addition to rising import costs and inflation as a result of the rapid depreciation of the yen caused by the widening gap between interest rates in Japan and the U.S., among other factors.
In the transportation industry, which is the mainstay business of the Seino Group, the volume of freight transportation in Japan showed signs of recovering, including a gradual pickup in industrial production overall. However, due to soaring prices for crude oil and raw materials, supply constraints and other factors, the conditions surrounding corporate activities continued to be severe.
Guided by the “Connecting our values - For the Prosperity of our Customers” three-year medium-term management plan, which was in its final year, the Seino Group responded to these conditions by offering value aimed at resolving the issues faced by customers, and concentrating its investments on growth areas such as logistics, with all employees moving forward as one to enhance its corporate value.The Seino Group has positioned the construction of an “open public platform” (O.P.P.) that enables mutual sharing of delivery services between cargo owner companies and logistics companies and provides customers with one-stop, no-stress services as the focus of its group-wide strategies, and as part of those efforts, has established a joint venture, HACOBELL INC., together with RAKSUL INC. Furthermore, the Seino Group made TIKUTAKUBIN Co., Ltd., which was a pioneer in the mail delivery business, a subsidiary in order to establish a delivery network in the last-mile field.
As a result, operating revenue for the fiscal year ended March 31, 2023 was ¥631,507 million (up 3.9% year on year), operating profit was ¥28,501 million (up 3.5% year on year), ordinary profit was ¥32,688 million (up 8.0% year on year), and profit attributable to owners of parent was ¥19,013 million (up 10.2% year on year).
Transportation Services Business
Based on the medium-term management plan, the Seino Group transformed to “Logistics Seino” while promoting efficiency in our mainstay special mixed freight transportation service “Less-than-truckload Seino,” and securing stable profits. In order to contribute to our customers’ value chains, we leveraged the advantage of our nationwide operations without being limited to the Seino Group’s domains and strove to strengthen our sales in logistics fields with potential for growth, such as by aiming to develop advanced logistics specialized for the electronics and healthcare business categories. By collaborating with warehouse business operators nationwide, sharing information on available space, and combining outsourcing of logistics operations, we optimized the overall logistics from the viewpoint of the customer, and developed our “Mitsukaru Souko” (warehouse finder) service for minimizing the time for opening logistics sites.
At Seino Transportation Co., Ltd., the core company of the Transportation Services Business group, we rebuilt deteriorating facilities and invested in renovations for extending the useful lives of facilities, while making full use of this company’s logistics and transportation function. We worked to translate these efforts into winning new cargo owner companies and raising the percentage of continuing shipments, thereby securing higher volumes of cargo handled. Moreover, in response to the so-called “2024 problem” resulting from limits being placed on the maximum number of hours that drivers can work overtime, we promoted reasonable transport fees, mainly in the long-distance category where costs will increase and in the heavy-load category where profitability is low, and worked to secure profits. In addition, we promoted diagramming for establishing a system of on-time route departures that does not depend on the volume of cargo handled, as well as utilized unit-load transport and other measures to improve the efficiency of the entire transport operation and optimized costs so that they are correlated with the volume of cargo handled. We also took steps to reduce CO2 emissions and reform working styles, such as launching operation of articulated trucks at the Nishi Hiroshima branch and Kita Osaka branch.
As a result of the above, operating revenue for this segment was ¥474,701 million (up 4.7% year on year) and operating profit was ¥21,869 million (up 3.6% year on year).
Vehicle Sales Business
In the business of passenger car sales, amid the intensifying competition between channels as a result of the introduction of a system where all Toyota dealers nationwide sell the full lineup of Toyota vehicles, we merged two subsidiaries in January 2023 and established TOYOTA COROLLA NETZ GIFU CO., LTD., aiming to be the dealer shops chosen by customers. As the largest Toyota dealer group in Gifu Prefecture, we put our customers first and aim to provide an improved level of service in which they can feel reassured and trust. Along with ongoing renovations to dealer shops to increase customer satisfaction, we also engaged in other efforts, including launching promotions that take advantage of the effects of introducing new models and making early replacement proposals through the use of residual value installment sales. Although new vehicle sales were lower than those in the previous year due to the global semiconductor shortage and repeated shutdowns of manufacturers accompanying stoppages in the supply of parts, because the number of vehicles allocated to the dealer shops increased starting from the fourth quarter and the profit per vehicle rose due to an increase in the number of high-priced models sold, both revenue and profit increased compared to the previous year. Moreover, used vehicle sales also recorded a year-on-year decline in volumes, due to a reduction in the number of traded-in vehicles caused by delivery delays of new vehicles and difficulties in procuring vehicles caused by the rising market. However, the increase in retail prices caused by delivery delays of new vehicles, and the rise in the auction market, resulted in higher operating revenue. In the service division, we strove to secure earnings through vehicle inspections and vehicle maintenance and garage services, as well as through sales of products, such as maintenance packages that lead to repeat visits, and expanding the lineup of recommended products.
In truck sales, although new vehicle sales recorded a year-on-year decrease due to the suspension of vehicle shipments as a result of the issue regarding the manufacturer’s misconduct concerning engine certification, we worked to secure earnings by increasing used vehicle sales utilizing a used vehicle sales network, encouraging customers to visit the workshop for preventive maintenance and working to bring outsourced inspection and maintenance operations in-house.
As a result of the above, operating revenue for this segment was ¥94,209 million (down 4.1% year on year) and operating profit was ¥4,709 million (up 4.9% year on year).
Merchandise Sales Business
The Merchandise Sales Business engages in the sale of fuel, paper and paper products, and other products. As a result of the above, operating revenue for this segment was ¥33,517 million (up 9.0% year on year) and operating profit was ¥800 million (up 7.8% year on year).
Leasing for Real Estate Services Business
In the Leasing for Real Estate Services Business, we mainly work to make maximum use of the potential of real estate by leasing the sites of former truck terminals, stores, and other locations.
As a result of the above, operating revenue for this segment was ¥2,191 million (up 8.9% year on year), and operating profit was ¥1,614 million (up 7.0% year on year).
The Other Business segment includes the information services business, the housing sales business, the construction contract business, and the personnel services business. Operating revenue for this segment was ¥26,886 million (up 14.8% year on year), and operating profit was ¥1,174 million (down 1.7% year on year).
With regard to the outlook for the Japanese economy going forward, although production activities are expected to gradually pick up as shortages in the supply of semiconductors and other parts ease and industrial production strengthens, we expect that we will need to continue closely monitoring the impact from persistently high resource and energy prices and rising inflation.
In the transportation industry, which is the mainstay business of the Seino Group, shortages of long-distance truck drivers and other labor due to the shrinking workforce have become an issue.
Given such conditions, the Seino Group will work to address the low birthrate and aging population, environmental problems and other social issues we face, based on the slogan “‘Team Green Logistics’ –Creating Together, Contributing to the Future–.” Amid the need to optimize the sustainable logistics network, we will work to strengthen our collaboration with various partners beyond the boundaries of our current customers, industries and business sectors and co-create “Green Logistics” as a united team in order to encourage consideration for the environment throughout the entire supply chain in line with the O.P.P. concept.
We have positioned our less-than-truckload transportation service as one part of social infrastructure, and in order to ensure that the provision of such service is stable, Seino Transportation Co., Ltd. merged with four group companies in April 2023. Through such efforts, we will work to reduce the number of vehicles with low loads, boost the operational efficiency for operations of the same economic zone, and rebuild and optimize the entire transportation system. In addition, we will collaborate with other companies in the industry while strengthening hub functions, address the “2024 problem” through “Green Logistics,” which includes combining modal shifts, and mitigate the risk of being unable to conduct transport operations, while striving to secure stable earnings. Furthermore, in the chartered vehicles field, which is a growth area, we started the “Mitsukaru Charter” (charter finder) service that enables customers to arrange for chartered vehicles through HACOBELL INC.’s website that has an excellent UI/UX. We will carry out sales activities based on our advantage of being able to offer the optimal transportation modes that combine less-than-truckload transportation service and other methods.
In order to leverage the advantage of our nationwide operations, while implementing a cross-functional approach spanning the entire Seino Group, we will newly establish the Logistics Department, putting us in good stead to resolve problems as the “general contact point for customers” and make proposals on the optimal logistics in cooperation with other companies in the industry. In the specialized fields of the electronics, healthcare, automotive battery and other growth markets, we will establish three new departments for providing solution services for each of those industries, and position these departments as part of our growth strategy of the Company. We will also invest personnel and other management resources to strengthen our sales capabilities, aiming to achieve dramatic growth.
In the business of passenger car sales in the Vehicle Sales Business, TOYOTA COROLLA NETZ GIFU CO., LTD. will aim to be the dealer shops chosen by customers through various measures, such as working to optimize its dealer network by carrying out ongoing renovations together with the new establishment, elimination or consolidation of dealer shops and service centers based on an analysis of the local trading area, and introducing license plate recognition systems for ensuring prompt, personalized service for customers visiting the shops. In addition, we will strive to boost productivity by consolidating headquarters functions and backyard operations and securing personnel, thereby ensuring profits.
In truck sales, while aiming to increase sales of large trucks following the resumption of shipments from the manufacturer, as well as leases, insurance and other financial products, and small and medium-sized trucks, we will work to secure earnings by securing a solid number of vehicles by inviting customers to bring their vehicle in early for vehicle inspections and periodic maintenance and through increased sales of parts to repair centers and other businesses. In other areas, we will strive to enhance ES through the introduction of advanced maintenance equipment and other measures, which should have a positive effect on the retention and recruitment of mechanics.
In the Merchandise Sales Business, Leasing for Real Estate Services Business, and Other Business, we will take steps to expand the business domain and strengthen our existing businesses.
In accordance with our new medium-term management plan and for the prosperity of our customers, the Seino Group will work to connect hearts and contribute to the future by being a corporate group chosen by customers by offering value that goes beyond logistics, and aim to achieve further growth.
To all shareholders, we sincerely ask for your ongoing encouragement and support into the future.
President and Chief Executive Officer