Expanding Distribution Volumes and Developing Procurement Routes for Used Vehicles and Used Automotive Parts

「However, as the results of structural reforms gradually became apparent, profitability improved significantly through the development of new sales channels and products and improvement of margins (spreads), resulting in a substantial increase in profit.」

「In the metal raw materials trading business, the application of revenue recognition standards following a change in transaction structure resulted in a substantial decline in reported revenue. However, as the results of structural reforms gradually emerged, profitability improved dramatically through the development of new sales channels and improved margins (spreads), resulting in a substantial increase in profit. As a result, revenue from the global trading business was ¥12,169 million, down 24.3% year on year, while segment profit was ¥327 million, up 1,882.7% year on year.」

「We will continue strengthening a stable collection and sales system through collaboration with domestic electric arc furnace manufacturers in the steel scrap field.」

「In Southeast Asia, where demand for steel scrap is expected, we will conduct market research, strengthen alliances, and seek to establish local operations in order to deploy the business model developed in Japan.」

「In the distribution of recycled resources, shipment volumes increased through stronger domestic sales and agile sales activities, and revenue and profit increased partly due to the impact of foreign exchange and other factors. However, the export environment for steelmaking raw materials is expected to remain difficult. We will continue developing products, expanding our network, and enhancing our functions in an effort to transform our business model.」

「Although the sourcing environment for metal scrap remained sluggish in the recycling resources distribution business, the sales environment recovered internationally and handling volumes increased. Profit also increased due to the recovering transportation environment and the impact of foreign exchange. In the logistics outsourcing service, strong shipments to landlocked countries and cost reductions increased profit. As a result, revenue from the global trading business was ¥17,445 million, up 3.6% year on year, and segment profit was ¥292 million, up 157.7% year on year.」

「We opened a branch in the Netherlands in July 2023. We will continue working to expand our business scope.」

「Meanwhile, profitability declined and handling volumes decreased as the domestic-overseas price differential narrowed due to weaker overseas demand for steel scrap. In addition, foreign exchange losses arising from the sharp appreciation of the yen contributed to lower revenue and profit. As a result, revenue from the global trading business was ¥24,876 million, down 17.0% year on year, and segment profit was ¥225 million, down 61.0% year on year.」

「Meanwhile, although overseas demand for steel scrap declined, crude steel production by domestic electric arc furnaces remained stable, resulting in higher domestic prices and lower overseas prices. Profitability declined and handling volumes also decreased as the domestic-overseas price differential narrowed. As a result, revenue from the global trading business was ¥16,831 million, down 16.8% year on year, and segment profit was ¥113 million, down 69.4% year on year.」

「In addition, earnings declined due to lower handling volumes resulting from reduced automobile production and other factors.」

「Although handling volumes declined, revenue and profit increased as earnings were secured through measures including capturing domestic demand and sales taking advantage of price movements. As a result, revenue from the global trading business was ¥20,233 million, up 64.9% year on year, and segment profit was ¥371 million, up 125.6% year on year.」

「A difficult business environment continued, including soaring ocean freight rates due to difficulties arranging vessels and stagnation in exports of metal scrap overseas amid the renewed spread of COVID-19. Against this backdrop, sales volumes increased as the company captured domestic demand, resulting in higher revenue and profit. As a result, revenue from the global trading business was ¥11,109 million, up 107.4% year on year, and segment profit was ¥302 million, up 387.7% year on year.」

「Amid an operating environment marked by soaring ocean freight rates, difficulty securing vessels and continued restrictions on overseas operations due to COVID-19, the company secured margins by using its regular sales scheme and passing higher logistics outsourcing costs on to customers. In addition, increased domestic collection yards and triangular trade secured handling volumes, resulting in higher revenue and profit.」

「Demand for used vehicles in the main export markets recovered quickly from the decline in the fourth quarter of the previous fiscal year, despite the resumption of lockdowns in some areas of Chile and a decline in sales of used truck parts to Southeast Asia, which had been strong in the same period of the previous year. Handling volumes for used vehicles and used auto parts remained above initial expectations. In the logistics outsourcing service, profitability was maintained by adjusting selling prices in response to lower handling volumes caused by a shortage of shipping containers. The company also worked to reduce fixed costs by reviewing yard management expenses and through other measures, but the business did not recover to the level recorded in the same period of the previous year, resulting in lower revenue and profit. As a result, revenue from the used-vehicle-related business was ¥4,034 million, down 16.4% year on year, and segment profit was ¥71 million, down 14.7% year on year.」

「Demand for used vehicles in the main export markets recovered quickly from the decline in the fourth quarter of the previous fiscal year, despite the prolonged lockdown in some areas of Chile and a decline in sales of used truck parts to Southeast Asia, which had been strong in the same period of the previous year. Handling volumes for used vehicles and used auto parts remained above initial expectations. In the logistics outsourcing service, profitability was maintained by adjusting selling prices in response to lower handling volumes caused by a shortage of shipping containers. The company also worked to reduce fixed costs by reviewing yard management expenses and through other measures, but the business did not recover to the level recorded in the same period of the previous year, resulting in lower revenue and profit.」

「Demand for used vehicles in the main export markets recovered quickly from the decline in the fourth quarter of the previous fiscal year, despite the continued lockdown in some areas of Chile and a decline in sales of used truck parts to Southeast Asia, which had been strong in the same period of the previous year. Handling volumes remained above initial expectations. The company also worked to reduce fixed costs by reviewing yard management expenses and through other measures.」

「Demand for used vehicles in Chile, one of the major destination countries, remained weak, and sales of used vehicles and used engines in Chile and Uganda were sluggish in March due to the impact of COVID-19. However, increased sales of used trucks to Southeast Asia, the recovery, centered on Dubai-bound services, in the handling volume of logistics outsourcing services that had been sluggish in the same period of the previous year, and the effect of fixed-cost reductions from downsizing used-vehicle loading yards contributed to earnings.」

「Although demand for used vehicles in Chile, one of the main export destinations, remained weak, sales of used trucks to Southeast Asia increased, profitability improved in the used-vehicle sales and maintenance business in Uganda, and the handling volume of logistics outsourcing services in Myanmar recovered from the low level recorded in the same period of the previous year due to the impact of regulations. These factors, together with the effect of fixed-cost reductions from measures such as downsizing used-vehicle loading yards, contributed to earnings.」

「Although demand for used vehicles in major destination countries remained weak, increased sales of used trucks to Southeast Asia through new customer development, the recovery of logistics outsourcing services that had been sluggish in the same period of the previous year due to regulations in major destination countries, and the effect of fixed-cost reductions from downsizing yards contributed to earnings.」

「With a view to declining procurement volumes in Japan, we will seek to increase the efficient distribution volume of used vehicles and used auto parts through measures including triangular trade tailored to market characteristics and the development of sourcing channels in new markets. We will conduct local marketing by leveraging the advantages of our overseas business bases, increase the distribution volume of used vehicles, and develop products other than used vehicles.」