Steady performance of automobile-related cargo and existing logistics operations

「• Air cargo transportation volume increased, resulting in higher revenue and profit year on year. • The company focused on winning new business in the priority areas identified in its medium-term management plan. ― Full-year contribution from the logistics hub opened in Europe during the previous fiscal year ― New business for distribution and retail customers in Japan, and the launch of new healthcare operations」

「High-fashion logistics in the Kanto region, semiconductor logistics in the Kyushu region, and e-commerce logistics in the Kansai region performed strongly and handling increased. Although urgent transportation due to cargo being diverted from ocean to air transportation occurred in air cargo transportation, the freight margin narrowed due to higher procurement freight rates, resulting in lower earnings year on year.」

「Forwarding operations recorded lower revenue and earnings due to lower unit ocean and air freight rates. • Logistics for home-appliance manufacturers: international transportation from overseas production bases to Japan remained weak. • Logistics for home-appliance retailers: storage, transportation and delivery services for large white goods, as well as home-delivery installation services, performed strongly in Japan and handling increased.」

「Forwarding operations recorded lower revenue and earnings due to lower unit ocean and air freight rates. Meanwhile, profit margins improved through control of procurement costs despite the difficult business environment. In logistics related to home appliances, transportation, delivery, and installation services for large white goods performed strongly and handling increased.」

「In addition to increased handling volumes in forwarding and container cargo handling in port transportation as imports and exports recovered, handling increased due to the shift from ocean to air transportation against the backdrop of a shortage of ocean containers. Handling also increased in air transportation and overseas storage and transportation operations related to procuring parts and other items to maintain customers' production.」

「Handling volumes in forwarding and container cargo handling in port transportation increased as imports and exports recovered. In addition, handling increased due to the shift from ocean to air transportation resulting from the shortage of ocean containers, and air freight rates rose sharply due to tight supply and demand.」

「Air transportation handling increased because the expected reduction and normalization of the shift from ocean to air transportation caused by the shortage of ocean containers since the previous fiscal year were delayed, and air freight rates rose sharply due to tight supply and demand. In addition, handling volumes in forwarding and container cargo handling in port transportation recovered as imports and exports recovered, while handling in logistics for home-appliance manufacturers and retailers increased in response to changes in consumption trends, including demand for watching the Olympic and Paralympic Games on television and stronger preferences for high-priced consumer durables during the COVID-19 pandemic.」

「In terms of operating conditions, the impact of the COVID-19 pandemic included decreased handling in ocean forwarding and other operations due to lower imports and exports. At the same time, handling in logistics for home-appliance manufacturers and other businesses increased as stay-at-home consumption expanded, and air transportation handling increased as customers reviewed their supply chains and shifted from ocean transportation due to the shortage of ocean containers. Higher freight rates due to tight supply and demand in air transportation also had an impact.」

「Due to restrictions on economic activity in Japan and overseas to prevent the spread of infectious disease, handling in ocean and air forwarding operations declined as customer production slowed, and handling of industrial equipment and containers in port transportation operations also decreased. Consequently, operating revenue decreased by ¥4,578 million year on year to ¥114,617 million. On the other hand, handling in logistics for home-appliance manufacturers and other businesses increased as stay-at-home consumption expanded, handling increased in procurement logistics for various raw materials as customers resumed or recovered production, air freight rates rose sharply, and various selling, general and administrative expenses declined. In addition, new solution-based logistics operations began, and pharmaceuticals logistics launched in the previous fiscal year contributed for the full year, resulting in operating income of ¥6,718 million, up ¥945 million.」

「Due to restrictions on economic activity in Japan and overseas to prevent the spread of infectious disease and the resulting decline in corporate production, handling in ocean and air forwarding operations decreased, as did container handling in port transportation operations. Consequently, operating revenue decreased by ¥4,262 million year on year to ¥54,502 million. On the other hand, as customer companies in Japan and overseas resumed production within permissible limits and moved to restore production to certain operating levels despite the restrictions on economic activity, urgent transportation services related to the procurement of raw materials, parts and other items arose across the businesses. In addition, handling of home-appliance-related products in domestic manufacturers' logistics increased, resulting in operating income of ¥2,657 million, down ¥86 million from the previous fiscal year and broadly unchanged.」

「In addition to implementing these measures, cargo handling in warehouse operations, including food ingredients, increased and remained at a high level, handling in logistics operations for home-appliance manufacturers increased, and new handling of pharmaceuticals and logistics for home-appliance manufacturers began, resulting in higher cargo volumes. Meanwhile, inventory storage and transportation costs increased due to greater-than-expected fluctuations in handling volumes before and after the consumption tax increase in logistics for home-appliance retailers, and from February 2020 onward, cargo volumes fell below expectations due to the effects of requests to refrain from going out in Japan and lockdowns in other countries,」

「In the logistics business, under the Medium-Term Management Plan 2017, the Group worked to fundamentally strengthen earnings by implementing various measures, including reductions in selling, general and administrative expenses and other costs and gross profit improvement measures. Operating revenue was ¥178.178 billion, up ¥271 million year on year, while operating income was ¥8.360 billion, down ¥122 million. Factors included increased handling of food ingredients and other cargo in warehouse operations, which remained at a high level, increased handling in logistics operations for home appliance manufacturers, and the launch of new logistics operations for pharmaceutical products and home appliance manufacturers. These gains were offset by lower volumes resulting from slower international cargo movements and higher storage and transportation costs caused by greater-than-expected fluctuations in logistics volumes for home appliance retailers before and after the consumption tax increase.」

「Although external conditions had an impact, including lower handling volumes in air transportation of electronic components and semiconductors on the revenue side and higher labor costs due to labor shortages on the cost side, the company implemented measures under the Medium-Term Management Plan 2017 to fundamentally strengthen the earnings capacity of the logistics business, including reductions in selling, general and administrative expenses and measures to improve gross profit. In addition, cargo handling in warehouse operations, including food ingredients, increased and remained at a high level, handling in logistics operations for home-appliance manufacturers increased, handling in logistics operations for home-appliance retailers increased before the consumption tax increase, and new handling of pharmaceuticals and logistics for home-appliance manufacturers began. As a result, operating revenue increased by ¥2,770 million year on year to ¥119,196 million, and operating income increased by ¥667 million to ¥5,772 million.」

「Although the business was affected by changes in the external environment, including lower volumes of air transportation of electronic components, semiconductors and other products as air freight market conditions deteriorated, lower logistics volumes for home appliance retailers due to continued adverse weather, and higher labor costs resulting from labor shortages, the Group worked under the Medium-Term Management Plan 2017 to fundamentally strengthen earnings in the logistics business. In addition to implementing various measures, including reductions in selling, general and administrative expenses and other costs and gross profit improvement measures, the Group benefited from project transportation of automotive-related cargo in its air transportation operations and high storage balances resulting from increased handling of coffee beans, a major warehouse cargo. Consequently, operating revenue was ¥58.765 billion, up ¥1.412 billion year on year, and operating income was ¥2.743 billion, up ¥429 million.」

「In addition to implementing these measures, strong domestic and international forwarding operations, project air transportation of automotive-related parts and other products, increased handling of storage and cargo-handling operations for healthcare cargo, a current priority area, and increased handling in delivery and transportation operations for home-appliance retailers resulted in operating revenue of ¥177,906 million, up ¥8,400 million year on year, and operating income of ¥8,483 million, up ¥3,680 million.」

「In addition to implementing these measures, strong domestic and international forwarding operations, project air transportation of automotive-related parts, increased handling of storage and cargo-handling operations for healthcare cargo, a current priority area, and increased handling of air conditioners and other products in delivery and transportation operations for home-appliance retailers due to the extremely hot summer resulted in operating revenue of ¥116,425 million, up ¥5,760 million year on year, and operating income of ¥5,105 million, up ¥2,229 million.」

「In the first quarter, domestic and international forwarding operations performed strongly, project air transportation of automotive prototypes and parts was undertaken, and handling of new healthcare cargo, a priority area, increased.」

「During the fiscal year, storage and air cargo transportation volumes grew. In addition, the launch of new healthcare logistics services and increased volumes in supply chain management services contributed to generally solid performance across the logistics business.」

「In addition to strong handling of automotive-related cargo and contributions from the Marukyo Unyu Group and Prime Cargo Group, which became consolidated subsidiaries from the previous fiscal year, operating revenue for the logistics business increased by ¥2,125.6 million year on year to ¥163,254 million, while operating income increased by ¥171.3 million to ¥3,415 million.」

「Existing operations, including air cargo transportation and other logistics-related businesses, generally performed solidly, with automotive-related cargo remaining strong.」