SG Holdings Co., Ltd. hereby announces the financial results for the third quarter of the fiscal year ending March 31, 2023.
　
In the consolidated cumulative third quarter of the fiscal year ending March 31, 2023, as demand for express package delivery services remained high backed by the relaxation of restrictions on economic and social activity due to novel coronavirus infections (hereinafter referred to as “COVID-19”) and the expansion of the e-commerce market, cargo movement in the Delivery Business slowed toward the latter half of the third quarter, and marine and air cargo volume in the Logistics Business also decreased. As a result, operating revenues decreased by 4.4% year on year to 1,115,567 million yen and operating income decreased by 7.2% to 106,588 million yen.
　
Fiscal Year Ending March 31, 2023 3Q Results

* The percentages in parentheses represent year-on-year changes.

Overview by Segment

In the Delivery Business, BtoB and BtoC packages performed well backed by the relaxation of restrictions on economic and social activity and the expansion of the e-commerce market during the third quarter, but cargo movements of both types slowed toward the latter half of the quarter. The average unit price decreased slightly due to the impact of the decrease in large packages despite continued efforts to receive appropriate freight tariffs. Meanwhile, TMS (*1) continued to perform well as a result of proposal sales by GOAL^® (*2). Furthermore, rising costs have been controlled to the extent they do not have a significant impact on performance at present by assigning personnel according to the volume of packages handled and initiatives to increase productivity, but upward pressure on a variety of costs is increasing, such as energy-related expenses including fuel and electricity, personnel expenses and outsourcing expenses. As a result, operating revenues increased by 1.5% year on year to 802,347 million yen and operating income increased by 8.2% to 80,743 million yen.
In the Logistics Business, marine and air freight charges have decreased after peaking in the third quarter of the previous year. Marine and air freight volume decreased significantly due to concerns of a recession against the backdrop of rising prices and monetary tightening, the impact of excess inventory centered on consumer goods in the United States, and forwarding demand not rising as in previous years ahead of the Christmas shopping season in the United States. In Japan, performance has been steady by receiving contracts for new business through comprehensive solution proposals made by GOAL^®. As a result, operating revenues decreased by 17.7% year on year to 268,906 million yen while operating income decreased by 42.4% to 17,948 million yen.
In the Real Estate Business, operating revenues decreased by 3.2% year on year to 5,468 million yen and operating income decreased by 11.7% year on year to 3,059 million yen due to the sale of properties in the previous fiscal year and a decrease in rent income, but results were as planned.
In Other Business, although there was an increase in logistics IT projects within the total logistics proposals by GOAL^®, sales of new vehicles decreased due to the impact of the semiconductor shortage. As a result, operating revenues decreased by 11.4% year on year to 38,845 million yen and operating income decreased by 2.6% to 3,423 million yen. 

Future Outlook

Although the economy is on a trend of moderate recovery from the slump caused by COVID-19, the outlook remains uncertain due to concerns about a slowdown in economic growth caused by factors such as rising prices, the weakening of the yen in foreign exchange markets, and the spread of geopolitical risks. The SG Holdings Group will provide transportation services that flexibly meet the needs of customers through the enhancement of comprehensive logistics solutions (GOAL®) and the expansion of management resources leading to the creation of competitive advantages, which are key strategies for the first year of the SGH Story 2024 Mid-term Management Plan. Furthermore, the consolidated subsidiary Sagawa Express Co., Ltd. plans to revise its express package delivery charges from April 2023. This will be carried out based on the impact of a variety of rising costs such as energy and vehicles, and the need to revise expenses related to personnel, such as wage levels and outsourcing expenses under such inflationary conditions.

(*1)  The Transportation Management System, a solution providing added value other than express package delivery services.
(*2)  The GOAL (GO Advanced Logistics) project team
A group-wide advanced logistics project team with the “goal” of working with customers to resolve logistics issues through the provision of advanced logistics solutions.

Revision of Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2023

Based on the cumulative third quarter results and market trends, the forecast for operating revenues in the fiscal year ending March 31, 2023 was revised to 1,450,000 million yen.

Details of Revision

For further information, please visit our IR・ESG website.
https://www.sg-hldgs.co.jp/en/ir