Konoike Transport : Earning presentation material for Fiscal Year Ended March 31, 2024 with explanation

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My name is Yoshihito Nakanishi of the Finance/Accounting Division.

Thank you for attending today.

At this point, I will discuss our consolidated financial results summary for the fiscal year ended March 31, 2024 and our forecast for the fiscal year ending March 31, 2025.

Please turn to page 4.

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To summarize, net sales increased by 1.0% to 315.0 billion yen, overcoming the negative impact of a decline in ocean and air cargo demand and freight market conditions. This result was mainly due to positive factors including higher volume in the Airport-Related Business stemming from the resumption of international passenger flights, increased production due to a recovery in production, etc., mainly among our customers, ongoing large-lot spot work, unit price revisions for contract production services, and orders for large-scale construction projects.

Although fuel and electricity prices remained high, profit rose due to factors including improved profitability, particularly in the Airport-Related Business, ongoing efforts to improve profitability under the basic policy of our new FY3/2023-FY3/2025medium-term management plan launched in April 2022, the receipt of appropriate unit prices, and improved efficiencies.

Operating income increased by 16.634 billion yen, or 25.6%.

Ordinary income increased by 17.034 billion yen, or 19.3%.

Profit attributable to owners of parent increased by 11.349 billion yen, or 36.7%.

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Next, I will discuss financial results by segment.

In the Integrated Solutions Business, net sales increased by 6.9% to 201.9 billion yen, despite the completion of earthquake reconstruction projects in September 2022 and our withdrawal from certain customer operations. This result was due to factors including the resumption of international passenger flights in the Airport-Related Business, as well as an increase in volume in the Food Products-Related Business as a result of increased customer production and the operation of new facilities.

Profit increased with a swing to profit stemming from an increase in transaction volume, mainly in the Airport-Related Business, as well as the receipt of appropriate unit prices and thorough operational efficiency improvements. This resulted in segment income increasing by 33.9% to 17.392 billion yen.

In the Domestic Logistics Business, net sales increased by 2.3% year on year to 53.9 billion yen, mainly due to an increase in transaction volume in the Food-Related Business with the operation of a new temperature-controlled warehouse, etc. Profit increased despite high fuel and electricity prices. This increase was due to higher revenue, efforts to improve profitability by receiving appropriate unit prices, and as a result of improving operational efficiency, resulting in a 1.1% increase in segment income to 3.081 billion yen.

In the International-Related Business, revenue and profit decreased due to the significant negative impact of declining demand for ocean and air cargo and the freight rate market, despite an increase in warehousing and distribution transaction volume in India, Thailand, America, and other countries. Net sales decreased by15.8% to 59.1 billion yen, while segment income decreased by 15.3% to 3.010 billion yen.

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Next, I will discuss the prominent changes in net sales for each business segment. In general, the factors are the same as mentioned in the previous section.

In the Steel-Related Business, revenue increased by 2.1% year on year due to ongoing large-lot spot work and unit price revisions for contract production services, despite the conclusion of earthquake restoration work.

In the Engineering-Related Business, revenue increased by 10.2% due to large-scaleon-site construction projects, etc.

In the Food Products-Related Business, revenue increased by 3.5% due to an increase in transaction volume among customers stemming from the extremely hot summer and new facility operations.

In the Airport-Related Business, revenue increased by 64.1%, mainly due to an increase in transaction volume with the resumption of international passenger flights.

In the Food-Related Business, revenue increased by 6.0% due to an increase in volume stemming from the operation of a new warehouse, etc.

In the International-Related business, revenue decreased by 15.8% due to the negative impact of lower demand for ocean and air cargo and freight rate market conditions, etc.

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Next, I will address performance compared to forecasts.

Net sales increased by 0.5% compared with the forecast.

Operating income increased by 1.4%.

Ordinary income increased by 2.6%.

Profit attributable to owners of parent increased by 5.1%. Both sales and profits were higher than forecast.

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Please refer to segment information as shown in the table below.

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This slide shows net sales performance by segment.

The results were as shown here, so you may refer to this slide.

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