1. FY2018 Financial Year (April 1, 2017 - March 31, 2018) : Second Quarter consolidated results
(1) Consolidated business results (cumulative)
(Rounded to the nearest 1 million Yen; percentage change on same quarter, previous FY)
Note: On October 1, 2017 the Company re-valued its shares at the ratio of 1 to 5 shares of common stock. Fourth quarter net profit per share is calculated from the start of the previous consolidated financial year.
2. Dividend
Annual dividend in Yen
Note: Revisions since latest published forecast: None.
On October 1, 2017 the Company re-valued its shares at the ratio of 1 to 5 shares of common stock. The re-valuation will be taken into account in calculating the final dividend on a per share per year basis. The Company forecasts a final dividend of ¥10 per share if the revised valuation is applied, and ¥5 per share if the pre-revaluation value is applied.
3. FY2018 Financial Year (April 1, 2017 - March 31, 2018) : consolidated forecast (Rounded to the nearest 1 million Yen; percentage change on same quarter, previous FY)
Information for investors
November 27, 2017: Presentation for analysts and institutional investors In accordance with a resolution passed at the 69th Annual General Meeting of Shareholders held on June 28, 2017, the Company re-valued its shares at the ratio of 1 to 5 shares of common stock, effective October 1, 2017. Accordingly the FY2018 earnings forecast and declaration of dividend are calculated on the valuations prior to the stock re-valuation.
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FY2018 Dividend forecast
Dividend per 1 share:
At Q2: ¥5.00 (Note 1)
Final: ¥5.00 (Note 2) -
FY2018 Full year consolidated earnings forecast
Full year net profit per 1 share: ¥30.50
Note:
1. Dividend at Q2 will be paid based on pre-revaluation value
2. Dividend amount based in pre-revaluation value
3. FY2019 annual dividend (pre stock consolidation) is ¥10 per share.
Information regarding the quarterly earnings report
1. Management perspective
While the Company's business benefited from an improvement in the domestic economy due to higher personal consumption and better employment figures, there is continued uncertainty due to geo-political risk in overseas markets.
Continued, modest recovery can be expected in the road haulage industry in Japan, bringing a slight increase in volume. However, the business environment continues to be harsh due to increasing labour costs and rising safety standards.
Against this backdrop, the Fukuyama Transporting is committed to building a robust cargo-handling network to deliver improved quality, productivity and profitability. As a result of these measures, the Company achieved sales of ¥128.8 billion (up 2.7% on the same quarter of the previous year), and operating income of ¥5.2 billion (up 0.1% on the same quarter of the previous year). Net profit during the quarter was ¥5.9 billion (down 0.2% on the same quarter of the previous year). Net return on parent company equity was ¥38 billion (down 17.5% on the same quarter of the previous year).
Highlights in the Company's transportation business segment included the establishment of a new branch at Nara (Nara Prefecture) and sales branches at Kesennuma (Miyagi Prefecture) in May and Ishikari (Hokkaido) in July. In addition to strengthening our network of collection and delivery points in this way, we have increased reliability by utilizing all transport modes - trailer transport, rail container, container, domestic shipping and air cargo - on trunk routes. During the quarter, we have continued the implementation of the revised rates introduced in the previous fiscal year, expanding and strengthening the collection system for all charges. With our focus on customer service, we have improved the productivity of collection and delivery drivers by implementing measures such as eliminating improper packages from our delivery service.
As a result, sales in the transportation business segment reached ¥112.4 billion (up 2.1% on the same quarter of the previous year); operating income was ¥4.9 billion, a decrease of 2.7% on the corresponding quarter.
Development of new projects and the review of existing practices led to increased profitability in the Company's distribution and processing business segment. The segment's sales were ¥5.7 billion (down 0.2% from the same quarter of the previous year), while operating income reached ¥0.28 billion (up 3.7% from the same quarter of the previous year).
Internationally, sales in customs clearance services were up, and the Company's expanded delivery routes within the ASEAN region led to a significant increase in sales of transport services. Total sales in this segment grew to ¥3.9 billion 36.9 % above the same quarter of the previous period); operating income reached ¥0.26 billion (108.5% increase from the same quarter of the previous period).
2. Financial situation
Assets
Total consolidated assets at the end of the second quarter increased by ¥7.8 billion to ¥424.9 billion yen. The increase is attributable mainly to current assets. Trade notes and accounts receivable grew by ¥3.3 billion, and the market valuation of shares and other commercial paper held by the Company increased to ¥5.0 billion.
Total consolidated liabilities at the end of the second quarter increased by ¥3.6 billion yen from the end of the previous consolidated fiscal year, to ¥186.2 billion. The increase is attributable mainly due to an increase in long-term borrowings (including one-year scheduled repayments).
Net consolidated assets at the end of the second quarter increased by ¥4.1 billion from the end of the previous consolidated fiscal year, to ¥238.6 billion. This is attributable mainly to an increase in retained earnings and the difference in the valuation of other securities.
Consolidated cumulative cash and cash equivalents in the second quarter
increased by ¥0.2 billion compared with the end of the previous consolidated fiscal year.
Net cash provided by operating activities amounted to ¥12.8 billion (up 15.0% from the same quarter of the previous fiscal year). This mainly consists of net income of ¥5.9 billion before adjustment of taxes, and depreciation expense of ¥6.8 billion.
Net cash used in investing activities was ¥12.3 billion (up 15.7% from the same quarter of the previous year). This consists mainly of expenses amounting to ¥11.2 billion in acquiring tangible assets.
Net cash as a result of financing activities was ¥0.27 billion. The comparable figure in the same quarter of the previous financial year was ¥2.1 billion yen. This mainly reflects earnings from the increase of borrowings to ¥33.7 billion, and outgoings of ¥30.7 billion for the repayment of borrowings, ¥1.9 billion for the purchase of treasury stock and ¥1.2 billion for dividend payment.
3. Outlook
The economic situation domestically is expected to continue its gradual recovery, while there is some unease regarding Asia and the emerging countries. A slight increase in cargo volume is expected in Japan, but this must be considered in the context of the challenges posed by the shortage of drivers and the demands of rising safety and environmental standards.
To meet these challenges, Fukuyama Transporting is introducing a new, robust, and significantly different logistics structure, offering diverse modes of transport.
In its distribution processes business, Fukuyama Transporting Co., Ltd is strengthening its network of processing centers in Japan and overseas, both through its own facilities and through partnerships. This will increase occupancy rates and efficiency and enhance productivity, while building an extensive forwarding service to satisfy any type of business customer.
Based on this reasoning, we have revised the forecast announced on May 12, 2017 of our consolidated earnings for the full financial year ending March 31, 2018.
FY2018 Financial Year (April 1, 2017 - March 31, 2018)
Revised full year earnings forecast
