Higher SG&A Expenses from Staffing Expansion and Pressure on Segment Operating Profit
First written in FY2018-Q2. 5 of 12 entries say "Mitigated", first in FY2019-Q1. Latest entry: FY2027-H1.
Osg Corporation moved to the "Worse" side of this theme in 2024, the same year as the typical company in this theme.
The whole theme swung hardest in 2018: 1 of 6 companies on the "Worse" side.
3 other companies' latest entry also says "Worsened".
- FY2027-H1WorsenedAnnual report
「During the current interim consolidated accounting period, costs increased as we continued investing in human capital to improve service quality, but we secured stable earnings, mainly from existing customers.」
In the maintenance business, costs related to continued human capital investment remained elevated. Although revenue increased, operating income fell 15.4% year on year. - FY2025-Q1WorsenedAnnual report
「SG&A expenses increased as the Company hired personnel to expand its maintenance structure in preparation for future customer growth. As a result, sales were ¥490.359 million, down 1.1% year on year, and operating profit was ¥73.942 million, down 11.2%.」
SG&A expenses increased as personnel were hired to expand the maintenance structure, resulting in a 1.1% decline in sales and an 11.2% decline in operating profit. - FY2021MitigatedAnnual report
「Despite the impact of acquiring new franchisees and franchisees refraining from activities to acquire new customers, the new plant’s operation, a review of delivery efficiency and online sales initiatives resulted in revenue of ¥1,380.708 million, up 1.0% year on year, and operating profit of ¥112.061 million, up 54.0%.」
In the HOD business, while the effects of restrictions on sales activities persisted, the pressure on profit was eased by the launch of a new plant, a review of delivery efficiency and online initiatives, resulting in a 54.0% increase in operating profit. - FY2020-Q1Profit pressure from reinforcing HOD personnelAnnual report
「As a result, sales were ¥280.846 million, up 5.0% year on year, but operating profit was ¥5.992 million, down 60.3%, due to increased staffing to expand the support structure for franchisees.」
In the HOD business, sales increased as staffing was expanded to strengthen support for franchisees, while operating profit declined 60.3% year on year. - FY2019MitigatedAnnual report
「As a result, the Company's replacement operations progressed smoothly, but delays in retailers' replacement operations resulted in sales of ¥1,832.018 million, down 2.0% year on year. Operating profit was ¥238.097 million, up 36.8%, reflecting the lower cost ratio and the effect of controlling SG&A expenses.」
It reports that sales declined 2.0% due to delays in retailers' replacement operations, while operating profit in the Maintenance business rose 36.8% as a result of a lower cost ratio and tighter control of SG&A expenses. - FY2019-Q3MitigatedAnnual report
「As a result, our own replacement operations progressed steadily, but delays in replacement operations by dealers resulted in revenue of ¥1,387.029 million, down 2.4% year on year. Operating profit was ¥192.876 million, up 15.0%, due to lower cost of sales and the effect of controlling selling, general and administrative expenses.」
It reports that sales declined due to delays in retailers' replacement operations, while operating profit rose 15.0% as a result of a lower cost ratio and tighter control of SG&A expenses. - FY2019-Q2MitigatedAnnual report
「As a result, revenue was ¥928.478 million, up 0.2% year on year, and operating profit was ¥134.409 million, up 42.2%, due to lower cost of sales and the effect of controlling selling, general and administrative expenses.」
The company reported that lower cost of sales and controlled selling, general and administrative expenses resulted in a 42.2% year-on-year increase in operating profit in the maintenance business. - FY2019-Q1MitigatedAnnual report
「We increased staff in the previous fiscal year and have been working to provide better services. In the first quarter, maintenance work for a major beverage manufacturer that had been performed in the same quarter of the previous year was pushed back to the second quarter or later in the current fiscal year, resulting in revenue of ¥425.928 million, down 0.7% year on year. However, operating profit was ¥45.240 million, up 103.1%, due to lower cost of sales and the effect of controlling selling, general and administrative expenses.」
The company reported that, despite the cost burden following staff expansion in the maintenance business, lower cost of sales and controlled selling, general and administrative expenses resulted in a 103.1% year-on-year increase in operating profit. - FY2018-Q3RestatedAnnual report
「As a result, revenue was ¥1,421.531 million, up 3.6% year on year, but operating profit was ¥167.779 million, down 29.9%, because personnel expenses and other selling, general and administrative expenses increased as staff were reinforced in anticipation of future expansion of the maintenance business. In the HOD (home water delivery) business, shipments of bottled water increased as we acquired new franchisees. As a result, revenue was ¥886.608 million, up 10.1%, but operating profit was ¥19.160 million, down 44.4%, because personnel expenses and other selling, general and administrative expenses increased following staff reinforcement from the first quarter.」
The company again explained that revenue increased in the maintenance and HOD businesses, while higher personnel expenses and other selling, general and administrative expenses associated with staff reinforcement reduced operating profit year on year. - FY2018-Q2First statedAnnual report
「During the current fiscal year, we increased our workforce to further improve service quality. As a result, revenue was ¥926.598 million, up 2.6% year on year, but operating profit was ¥94.491 million, down 41.3%, due to higher personnel expenses and other selling, general and administrative expenses. In the HOD (home water delivery) business, shipments of bottled water increased as we acquired new franchisees. As a result, revenue was ¥584.539 million, up 8.6%, but operating profit was ¥6.050 million, down 84.0%, because personnel expenses and other selling, general and administrative expenses increased following staff reinforcement from the first quarter.」
The company explained that increased staffing in the maintenance and HOD businesses lifted revenue, while higher personnel expenses and other selling, general and administrative expenses reduced operating profit in both businesses year on year.