To Our Shareholders
To Our Shareholders
following is a brief report on the performance of Seino Holdings Co., Ltd. for
the fiscal year ended March 31, 2018, our 97th term (from April 1, 2017 to
March 31, 2018).
the fiscal year under review, Japan’s economy continued to recover moderately
against a backdrop of improvements in corporate earnings and the employment
environment, a pickup in personal consumption, among other factors. Despite
this improvement, however, the outlook remains uncertain amid concerns over how
the Japanese economy will be affected by instability in the international
situation and financial and capital markets, and other uncertainties.
In the transportation industry,
the Seino Group’s mainstay business, while facing various management
challenges, such as rising outsourcing costs and increasing personnel expenses
under a strained labor supply/demand environment, we have been steadily
increasing freight volumes amid the improving economic landscape and have
started to see the results of our initiatives aimed at receiving reasonable
transport fees and charges.
Facing such circumstances, the
Seino Group has formulated the medium-term management plan “Value-Up Challenge
2020: Take Off Toward Growth,” which commenced in the fiscal year under review.
While seeking to stretch our “strengths” accrued up until now, we have united
to pursue maximization of our corporate value, and to create new value.
As part of these measures, Seino
Holdings Co., Ltd. entered into a capital and business alliance agreement with
Hankyu Hanshin Holdings, Inc. and HANKYU HANSHIN EXPRESS Co., Ltd. on December
25, 2017 so that the signing parties could play complementary roles to provide
new logistics services to customers inside and outside Japan.
Furthermore, in order to provide logistics
supporting three temperature zones across Japan and the Asian region, we made Show-wa
Reizo Co., Ltd. (Chuo Ward, Tokyo), which owns three large-scale refrigerating/freezing
warehouses in suburban areas of Tokyo’s metropolitan area, and ice manufacturer
SHOREIFIT (Chuo Ward, Tokyo) our subsidiaries on October 2, 2017, and at Indonesia’s
PT Seino Indomobil Logistics, we started the transportation of refrigerated
foods in that country on October 11, 2017.
In addition, on May 30, 2017, we
also acquired 100% of the shares of Shin-ota Taxi Co., Ltd. (Minokamo City,
Gifu Prefecture), Kani Taxi Co., Ltd. (Kani City, Gifu Prefecture), and Tajimi
Taxi Co., Ltd. (Tajimi City, Gifu Prefecture) to make each of them our
subsidiaries. We aim to contribute to the local regions and society through the
taxi businesses and community bus operations and other businesses of these
As a result, operating revenue for the fiscal year ended March 31, 2018 was ¥596,130 million (up 5.0% year on year), operating profit was ¥27,879 million (up 2.8% year on year), ordinary profit was ¥29,120 million (up 0.7% year on year), and profit attributable to owners of parent was ¥20,046 million (up 10.1% year on year).
Transportation Services Business
the Transportation Services Business, working under our medium-term management
plan, we responded to the issue of the population decline and shortage of labor
caused by the aging population and low birth rate by promoting our strategic
vision “Gain efficiency through virtuous cycles,” and striving to improve
efficiency by making best use of the potential of our personnel.
Seino Transportation Co., Ltd., the core company of the Transportation Services
Business group, we continued negotiations to receive reasonable transport fees
and charges, and fuel surcharges, as a measure to place importance on
profitability in order to continue to ensure stable transportation quality. In
addition, we focused on increasing the volume of freight handled through
capturing and keeping new freight consignors. On the other hand, while
proceeding with further improving delivery precision for fixed-time,
fixed-route deliveries by using a multiple-trip system on routes between Tokyo
and Osaka, we strengthened efforts to switch part of the long-distant routes to
rail, which led to improved revenues, shortened labor hours and reduced
in the field of logistics, by incorporating the “manufacturing/processing work”
of our customers in addition to our existing “Logistics + Transportation,” we were
able to add factory functions and offer added value.
for the purpose of recruiting and training personnel amid the shrinking
population of Japan’s labor force, we promoted the establishment of subsidies
for acquiring motor vehicle licenses and the enhancement of social service
facilities through the establishment and extension of facilities. We also strove
to improve employee retention rates by shortening labor hours through working style
reform and reducing the burden of operations. In addition, our safety promotion
instructors lead efforts to conduct safety education and training courses for
the entire company to improve skills and awareness.
As a result of the above, operating revenue for this segment was ¥443,167 million, up 4.8% year on year, and operating profit was ¥20,965 million, up 4.7% year on year.
Vehicle Sales Business
passenger vehicle sales, we worked to promote campaigns and other activities
centered on establishing original cars with special specifications and new vehicle
models. However, the cycle of the new-model effect for the biggest selling car
models came to an end and this led to the number of new vehicles sold in the
current fiscal year ending slightly lower than that of the previous fiscal
year. In used vehicle sales, however, the number of vehicles sold grew year on
year as a result of increased retail sales through local-area oriented sales
activities. In the service division, we strove to secure revenues by promoting vehicle
inspections and vehicle maintenance and garage services, as well as the sales
of products that lead to repeat visits such as maintenance packages and
In truck sales, sales were robust in Japan and the number of vehicles sold at SUBIC GS AUTO INC. in the Philippines increased significantly. Moreover, the number of new vehicles sold increased year on year. While increasing the number of garage services through promoting vehicle maintenance and garage services, such as vehicle inspections, we also focused on sales of used-parts.
As a result of the above, operating revenue for this segment was ¥103,342 million, up 3.1% year on year, and operating profit was ¥4,922 million, down 2.6% 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 an increased unit sales price and higher sales volume in the sales of fuel and firm sales of domestic tissue papers, operating revenue for this segment was \31,575 million, up 13.8% year on year, and operating profit was \809 million, up 5.7 % year on year.
Leasing for Real Estate Services Business
the Leasing for Real Estate Services Business, we strive to effectively utilize
business resources by leasing the former truck terminal and store sites, which
had been replaced mainly due to the impact of urban development and
increasingly cramped conditions.
Operating revenue for this segment was ¥1,598 million, up 3.6% year on year, and operating profit was ¥1,239 million, down 3.1% year on year.
Other Business segment includes the information services business, the housing
sales business, the passenger transportation business, the construction
contract business, and the personnel services business. As a result of strong
sales for software development, cloud services and information device sales in
the information services business and other factors, operating revenue for this
segment was ¥16,445 million, up 8.6% year on year, and operating profit was ¥920
million, up 26.6% year on year.
In our outlook for the Japanese economy, we expect that the moderate tone of recovery will continue amid the ongoing improvement in the employment and income environments, with positive effects also expected from various policy measures. Nevertheless, there are lingering uncertainties reflecting concerns such as the impact of various problems in overseas countries and fluctuation in the financial and capital markets.
Facing such circumstances, the Seino Group will steadily implement the various measures of the three-year medium-term management plan “Value-Up Challenge 2020: Take Off Toward Growth,” which is currently in the second year. While seeking to stretch our “strengths” accrued up until now and pursue maximization of our corporate value, we will accelerate our reforms and bold initiatives to create new value.
In our mainstay Transportation Services Business, we are seeing various optimistic signs such as an increase in consumer-related freight and production-related freight against the backdrop of robust increases in domestic private-sector demand as well as positive trends in regard to receiving reasonable transport fees and charges. On the other hand, with increasing personnel expenses and rising outsourcing costs as well as persistently high fuel costs and the like, it is important that the Seino Group not only implement initiatives aimed at securing sustainable revenues and profits, but also take measures in response to the labor shortage.
As part of this response we continue to implement initiatives to receive reasonable transport fees and charges, and fuel surcharges, carry out strategies to acquire new customers and improve the ratio of new customers who continue to consign with us, and work to strengthen the logistics business. In addition, we will work to streamline operations through various efforts including initiatives for expansion of model shifts and introduction of articulated trucks, promotion of the transition to EDI (electronic data interchange), and provision of positional data of transportation vehicles (Ichishiru). As the improvements in time productivity are gained through such measures, we expect to enjoy improvements in not only customer satisfaction but also employee satisfaction.
Meanwhile, bearing in mind that the volume of freight transportation in Japan will shrink as the population declines and the conditions of low birthrate and aging population advance, we plan to further strengthen our cooperation with HANKYU HANSHIN EXPRESS Co., Ltd., which has strength in the international transportation business, in order to realize sustainable growth both in Japan and overseas.
In passenger vehicle sales in the Vehicle Sales Business, we expect that the growth in the number of new vehicles sold will be eroded by the changes in the social structure such as low birthrate and aging population, and declining car ownership among young adults. As a result, we plan on keeping the business stable through expanding our portfolio of businesses relating to used car sales, car part sales, vehicle inspections and automotive repairs while focusing on new vehicle sales of mini-sized vehicles with small engine displacement. In truck sales also, we will make efforts to expand and enhance our portfolio of businesses relating to vehicle inspection and automotive repairs. While carrying out initiatives for used vehicle part sales, and working to boost customer satisfaction through store renewal and introducing the latest equipment, we will carry out sales activities that are locally based.
In the Merchandise Sales Business and Other Business, we will expand our sales by strengthening existing businesses and develop new products designed from the viewpoint of the customer.
In the Leasing for Real Estate Services Business, we will work to develop our leasing and sales of idle real estate while effectively utilizing underutilized real estate.
making steady efforts to achieve these business challenges, the Seino Group
will work to strengthen the business foundation and contribute to our customers’
prosperity to achieve further growth.
To all shareholders, we sincerely ask for your ongoing encouragement and support into the future.
President and Chief Operating Officer