The following is a brief report on the performance of Seino Holdings Co., Ltd. for the fiscal year ended March 31, 2024, our 103rd term (from April 1, 2023 to March 31, 2024).
During the fiscal year under review, the Japanese economy continued to experience a moderate recovery driven mainly by growth in service consumption and inbound tourism demand amid further advancement in the normalization of social and economic activities, which was in spite of rising uncertainty caused by the increasingly unstable international situation, slowdowns in overseas economies, and persistently high prices of energy and raw materials.
In the transportation industry, which is the mainstay business of the Seino Group, amid weak conditions for construction-related freight and consumer-related freight in particular, the conditions surrounding corporate activities continued to be severe due to soaring prices for crude oil and raw materials and measures taken in response to the “2024 problem.”
Operating under such conditions, the Group formulated “Medium- and Long-Term Management Direction — Vision and Roadmap 2028” to aim for an ROE (return on equity) of 8.0% or higher in order to quickly realize a PBR (price book-value ratio) of at least 1.0 times through growth and appropriate capital measures. Based on that, we deployed measures that struck the right balance of growth, profitability, and capital efficiency, through making higher-profit margins integral to our operations by promoting efficiency improvements and striving for stable growth while maintaining our competitive edge in our special mixed freight transportation, and making logistics and chartered transportation, which we consider should be the cornerstone of our total customer service, our growth engine.
As a result, operating revenue for the fiscal year ended March 31, 2024 was ¥642,811 million (up 1.8% year on year), operating profit was ¥23,403 million (down 17.9% year on year), ordinary profit was ¥24,496 million (down 25.1% year on year), and profit attributable to owners of parent was ¥14,561 million (down 23.4% year on year).
In the Transportation Services Business, we are working to achieve growth and improve profitability in our mainstay special mixed freight transportation as set forth in Roadmap 2028. In addition to enhancing our network, which already has national coverage, we will utilize our numerous branches and scale of personnel, which we identify as strengths, and work on receiving reasonable transport fees, concentrating on the long-distance and heavy-load categories. We will also secure higher volumes of cargo handled through actively expanding our base of shippers.
At Seino Transportation Co., Ltd., the core company of the Transportation Services Business group, underwent an absorption-type merger with the group companies, Kanto Seino Transportation Co., Ltd., Nohi Seino Transportation Co., Ltd., and Tokai Seino Transportation Co., Ltd. on April 1, 2023 to accelerate the efficiency of freight service runs, reorganize the network of relay points and consolidation points, eliminate small loads and innovatively shift to transportation structures that correlate to the volumes of cargo handled. Furthermore, we verified cost management correlated with revenue and volumes of cargo handled at short intervals with successful outcomes. In other areas, aiming to realize Green logistics, we actively deployed O.P.P. (Open Public Platform) Kangaroo service runs and started sharing package deliveries with TONAMI Transportation Co., Ltd. in Kanazawa City, Ishikawa Prefecture and Okazaki City in Aichi Prefecture. Moreover, we started a demonstration trial of Japan’s first implementation of large trucks running on hydrogen fuel cells (FC), and introduced hydrogen fuel cell (FC) small trucks and electric (EV) small trucks into our operations.
In terms of expansion efforts, Seino Transportation Co., Ltd. relocated the Matsudo branch (Nagareyama City, Chiba Prefecture) and Kyoto branch (Fushimi-ku, Kyoto City), opened the Shinkiba distribution warehouse (Koto-ku, Tokyo), Atsugi distribution warehouse (Aiko-gun, Kanagawa Prefecture), Gifu-Hashima Logistics Center (Hashima City, Gifu Prefecture), and the Kita-Osaka Hub (Ibaraki City, Osaka Prefecture), a dedicated office for relay transportation destined for Kyushu. In addition, Seino Super Express Co., Ltd. relocated the Toyama sales office (Toyama City). In this way we worked to strengthen our logistics infrastructure and improve the efficiency of our relay operations to expand our earnings.
As a result of the above, operating revenue for this segment was ¥470,237 million (down 0.9% year on year) and operating profit was ¥15,273 million (down 30.2% year on year).
In passenger vehicle sales of the Vehicle Sales Business, the new vehicle sales volume grew for the first nine months due to vehicle production showing a trend of recovery from the supply constraints associated with the semiconductor shortage, and although the sales volume switched to a decline in the fourth quarter owing to the impact of the issue regarding the misconduct of manufacturers concerning certification, the new vehicle sales volume significantly surpassed the previous fiscal year on a full-year basis. The used vehicle sales volume also significantly surpassed the previous fiscal year due to an increase in trade-ins accompanying the increase of new vehicle sales as well as strong wholesale sales. We also focused efforts on after-sales services including vehicle inspections, check-ups, maintenance and repairs. In addition the increase in customer satisfaction, we are also investing to improve employee satisfaction (ES), which has a positive effect on the retention and recruitment of sales staff and service mechanics.
In truck sales, despite the impact of the suspension of vehicle shipments as a result of the issue regarding the misconduct of manufacturers concerning engine certification, there was a recommencement of shipments for some vehicle types and sales of large and medium sized vehicles were strong. As a result, new vehicle sales recorded a year-on-year increase. Moreover, in used vehicle sales, the number of vehicles sold was higher than that of the previous fiscal year.
In terms of office expansion efforts, TOYOTA COROLLA NETZ GIFU CO., LTD. Kagashima branch (Gifu City) was merged, and efficiency of the store network was improved.
As a result of the above, operating revenue for this segment was ¥108,663 million (up 15.3% year on year) and operating profit was ¥5,808 million (up 23.3% year on year).
The Merchandise Sales Business engages in the sale of fuel, paper and paper products, and other products. Sales of domestic tissue papers in particular were firm and there was a rise in sales unit prices for fuel sales. As a result, operating revenue for this segment was ¥35,747 million (up 6.7% year on year) and operating profit was ¥948 million (up 18.5 % year on year).
In the Leasing for Real Estate Services Business, we are working to utilize our holdings of land and former sites to maximize their potential and transform this business into one that is valuable for the local region.
As a result of the above, operating revenue for this segment was ¥2,246 million (up 2.5% year on year), and operating profit was ¥1,648 million (up 2.1% 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 ¥25,917 million (down 3.6% year on year), and operating profit was ¥1,394 million (up 18.8% year on year).
For the future outlook for Japan’s economy, the moderate pace of recovery can be expected to continue taking into account the ongoing improvements in the employment and income environment among other factors such as the effects of various government policies. On the other hand, the outlook is expected to be uncertain with risks that could lead to negative outcomes for the Japanese economy such as a downswing in overseas economic conditions together with causes for concern such as rising prices and the situation in the Middle East.
In the transportation industry, which is the mainstay business of the Seino Group, with the aging of the population, the shrinking of the workforce is accelerating, and together with the “2024 Problem,” we can foresee the potential risk of not having the workforce to carry goods.
Operating under such circumstances, in this fiscal year, the second year of Roadmap 2028, the Transportation Services Business will continuously work toward realizing the targets of that roadmap not only by concentrating on optimizing its own company systems, but also through coordinating and cooperating with other companies in the industry as part of the Open Public Platform (O.P.P.). Specifically, we intend to leverage our own company’s strength, namely our overwhelmingly competitive and stable transportation capabilities offered by our nation-wide network for special mixed freight transportation, and engage in O.P.P. with other companies in our industry that have different competitive advantages and also utilize O.P.P. to improve operations in inefficient regions. In this way we seek to improve the convenience of customers and boost efficiency of parcel delivery in the logistics sector.
Additionally, as a way to accelerate our transformation to “Logistics Seino,” while strengthening the charter business, one of our mainstay fields, we will work to cultivate a deeper alliance with HACOBELL INC.
In other areas, in order to expedite and streamline decision making in the business operations related to the last one mile, in April 2024, we established SEINO LAST ONE MILE Co., Ltd. to oversee six operating companies, and in addition to that, we made NICHIYU Co., Ltd. (Yokohama City), which has strengths in the last one mile of parcel delivery in Kanagawa Prefecture, a consolidated subsidiary.
In passenger vehicle sales in the Vehicle Sales Business, we will renew branches and service workshops to improve customer satisfaction and open new business locations based on analysis of commercial area reach. In addition, we will seek to make our operations more efficient by optimizing our branch network through consolidating some branches. Moreover, we will focus on the recruitment and training of service mechanics, to undertake the highly profitable services, by pursuing workstyle reforms and improving the workplace environment.
In truck sales, we will be able to respond to customer needs following the easing of supply constraints and the recommencement of shipments. Therefore, we aim to expand sales, focusing not only on new vehicle sales but also on used vehicle sales, leases, and financial products such as insurance. In addition, we will work to secure earnings by securing a solid number of vehicles by inviting customers to bring their vehicle in early for vehicle inspections and periodic check-ups and through increased sales of parts to repair centers and other businesses. In other areas, we will strive to enhance ES through the introduction of advanced maintenance equipment and other measures, which should have a positive effect on the retention and recruitment of mechanics, as has been the case for passenger vehicle sales.
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.
Under the Seino Group’s management philosophy of “developing the company and making employees happy,” we aim to create “an attractive company that employees can be proud of.” By contributing to the future and happiness of our customers, business partners, society, the environment, and the families of our employees, we will strive for further growth.
To all shareholders, we sincerely ask for your ongoing encouragement and support into the future.
June 2024
Yoshitaka Taguchi,
President and Chief Executive Officer
Takao Taguchi,
Representative Director