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, 2022, our 101st term (from April 1, 2021 to March 31, 2022).
During the fiscal year under review, the economy of Japan had been expected to see a resurgence in economic activity as a result of progress in vaccinations for novel coronavirus disease (COVID-19), but due to the emergence of new variants of the virus, amongst other factors, the outlook remained unclear throughout the period.
In the transportation industry, which is the mainstay business of the Seino Group, there were concerns about the impact on corporate profits of supply constraints, soaring prices for crude oil and raw materials, and other factors, but personal consumption and industrial production entered a moderate recovery trend, and some positive signs were visible with regard to the volume of freight transportation in Japan.
Guided by the concepts of the “Connecting our values - For the Prosperity of our Customers” three-year medium-term management plan, which was in its second 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.
As part of that, the Group prioritized achieving finer granularity within its delivery network for the major conurbations of the Tokyo metropolitan area and the Kinki metropolitan area, which comprise the major sources of consumption. In addition, in preparation for establishing three temperature zone logistics, the Company made subsidiaries of KANTO LOGITEC CO., LTD. (headquartered in Hidaka City, Saitama Prefecture), and MARUKYU UNYU CO., LTD. (headquartered in Ito-gun, Wakayama Prefecture), which have particular strengths in supporting the three temperature zones of frozen, chilled, and dry.
As a result, operating revenue for the fiscal year ended March 31, 2022 was ¥607,657 million (up 2.6% year on year), operating profit was ¥27,545 million (up 12.2% year on year), ordinary profit was ¥30,269 million (up 9.1% year on year), and profit attributable to owners of parent was ¥17,255 million (up 3.6% year on year).
Transportation Services Business
In the Transportation Services Business, we based our operations on the Seino Group’s nationwide transportation and delivery network, in accordance with the medium-term management plan, while utilizing the logistics resources of other companies. We also began offering the “Ippo” logistics concierge service which introduces and proposes the optimal solution for the customer.
In this service the Company acts as the contact point for distribution, selects one of its partners, and handles everything from communications to inquiries such as tracking. It has been well received as a one-stop solution for resolving the difficulties faced by customers.
At Seino Transportation Co., Ltd., the core company of the Transportation Services Business, we have been seeking to strengthen our sales structures by increasing the number of planners and working to receive reasonable transport fees. In addition, we implemented initiatives to win new customers and raise the percentage of continuing shipments in order to secure higher volumes of cargo handled. These included utilizing the Customer Management System, which centrally manages customer information, and the Seino Yuso Navi Pro service, which proposes the optimal transportation mode for the volume and size of customer cargo.
On the other hand, we have continued our efforts to improve the operational efficiency for regular scheduled routes and the efficiency of sorting and loading, as well as optimizing costs so that they are correlated with the volume of cargo handled, with the aim of ensuring more stable profits. We also took steps to reduce CO2 emissions, mitigate the shortage of truck drivers, and reform working styles, such as by launching our third round-trip route mixed-block train, “Kangaroo Liner TF60,” which operates between Tokyo Freight Terminal and Higashi Fukuyama station.
In terms of expansion efforts, Seino
Transportation Co., Ltd. opened the Inzai distribution warehouse (Inzai City,
Chiba Prefecture), and the Ryugasaki branch (Inashiki-gun, Ibaraki Prefecture),
as well as relocating the Sagamihara branch (Sagamihara City, Kanagawa
Prefecture) and the Nagoya-Nishi branch (Ama City, Aichi Prefecture). Seino
Super Express Co., Ltd. relocated the Yokaichi sales office (Higashiomi City,
Shiga Prefecture), while Nohi Seino Transportation Co., Ltd. opened the
Kakamigahara Kawashima distribution center (Kakamigahara City, Gifu
Prefecture). In this way we worked to strengthen our logistics infrastructure
and expand our earnings.
As a result of the above, operating revenue for this segment was ¥453,253 million (up 2.8% year on year) and operating profit was ¥21,107 million (up 14.9% year on year).
Vehicle Sales Business
In the business of passenger car sales in the Vehicle Sales Business, in addition to ongoing store renewals to improve customer satisfaction, we implemented measures such as campaigns to take advantage of new model introduction effects, and proposals for early replacement through the use of residual value installment sales. However, the business was affected by semiconductor shortages, delivery delays caused by constraints on parts supply resulting from the spread of COVID-19 in Southeast Asia, and other problems, leading to volume sales of new vehicles recording a year-on-year decline.
Used vehicle sales also recorded a year-on-year decline in volumes, due to the reduction in traded-in vehicles caused by delivery delays of new vehicles and difficulties in sourcing caused by the rising market. However, the increase in retail prices for new vehicles caused by the delivery delays, and the rise in the auction market, resulted in higher operating revenue and gross profit. In the service division, as well as focusing on initiatives to increase contact with customers by inviting them to bring their vehicles in with the aim of increasing the efficiency of workshop visits, we worked to secure earnings by strengthening proposals for accessory products.
Truck sales were affected by production adjustments resulting from semiconductor and parts shortages in a similar way to passenger vehicle sales, but domestic new vehicle sales recorded a year-on-year increase. In addition to strengthening used vehicle sales, we worked to secure earnings by encouraging customers to visit the workshop for preventive maintenance and working to bring outsourced operations in-house.
In terms of office expansion efforts, Toyota Corolla Gifu Co., Ltd. rebuilt the headquarters and Gifu branch (Gifu City).
As a result of the above, operating revenue for this segment was ¥98,220 million (down 0.1% year on year) and operating profit was ¥4,491 million (down 6.1% year on year).
Merchandise Sales Business
The Merchandise Sales Business engages in the sale of fuel, paper and paper products, and other products. Sales of domestic tissue paper increased, but due to a decline in operating revenue from fuel, amongst other factors, operating revenue for this segment was ¥30,753 million (down 0.9% year on year), although cost reductions and other efforts resulted in operating profit of ¥789 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 ¥2,013 million (up 8.0% year on year), and operating profit was ¥1,508 million (up 1.0% 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 ¥23,417 million (up 18.7% year on year), and operating profit was ¥1,194 million (up 145.8% year on year).
With regard to the outlook for the
Japanese economy going forward, the effects of various policies being
implemented and improvements in overseas economies are expected to bring about
a recovery in business conditions, but the outlook is predicted to remain
uncertain due to the impact of such factors as resurgences in infections and
soaring prices for raw materials.
In the transportation industry,
which is the mainstay business of the Seino Group, there are concerns about
rising fuel prices caused by the increase in crude oil prices, and labor
shortages, including shortages of long-distance drivers. However, with capital
investment expected to accelerate and industrial production projected to be
strong, the recovery trend in the volume of freight transportation in Japan,
centered on production-related freight, is forecast to become clearer.
Under such conditions, in
preparation for the building of an efficient and flexible logistics platform in
the Transportation Services Business by the Group as a whole, we will
restructure our main route timetables in order to achieve optimal overall
In order to accelerate our
transition from “Less-than-truckload Seino” to “Logistics Seino,” we will make
full use of distribution facilities while improving spatial and task
efficiency, and implementing initiatives for semi-automation through the use of
assistive robots. We will also use the functions of the entire Group to create
order-made proposals that resolve customer problems.
Moreover, we will further broaden
the application of EDI to contribute to the customer’s use of information,
which will open the way to improved operational efficiency, while also driving
transportation reforms by promoting modal shifts, moving to heavier vehicles
and taking other labor-saving measures.
In other areas, we will rebuild
deteriorating facilities and accelerate the use of cashless operations, seek to
strengthen recruitment and improve retention rates by promoting working style
reforms and health management, implement measures for a sustainable society,
including reductions in our CO2 emissions in preparation for
achieving carbon neutrality, and execute brand strategies to raise awareness of
Because competition between channels is intensifying as a result of the introduction of Toyota vehicles being sold in parallel with all other models, in the Vehicle Sales Business we are working to become the supplier chosen by customers through the implementation of such measures as ongoing renewal of stores and service workshops, and the introduction of number plate recognition systems to speed up our response to visiting customers. Furthermore, we are moving forward with the optimization of our sales network through a program of establishing new stores and consolidating existing stores, based on analysis of the local trading area. In truck sales, delivery delays for new vehicles are expected to continue, and so we will work to secure earnings through sales of used vehicle and by conducting inspections and maintenance. In other areas, we will strive to enhance ES by introducing advanced maintenance equipment and improving the working environment, which should have a positive effect on the recruitment and retention 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 the three-year medium-term management plan, the Seino Group will continue to contribute to the prosperity of customers, and to achieve further growth by implementing measures that result in the happiness of people everywhere.To all shareholders, we sincerely ask for your ongoing encouragement and support into the future.
President and Chief Executive Officer