SG Holdings Co., Ltd. (head office: Minami-ku, Kyoto-shi; Chairperson, CEO and President: Eiichi Kuriwada) hereby announces the financial results for the fiscal year ended March 31, 2023.
In the fiscal year ended March 31, 2023, in the Delivery Business, the number of packages handled in express package delivery services was solid against the backdrop of 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, but cargo movement slowed from around the latter half of the third quarter, and marine and air cargo volume in the Logistics Business also decreased significantly. As a result, operating revenues decreased by 9.7% year on year to 1,434,609 million yen and operating income decreased by 13.1% to 135,275 million yen.
　

Results for the Fiscal Year Ended March 31, 2023

* 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 until around the first half of the third quarter. Cargo movements of both types slowed from around the second half of the third quarter due to factors such as weakening of price-adjusted consumer spending. The average unit price decreased slightly due to factors such as the impact of the decrease in large packages despite continued efforts to receive appropriate freight tariffs. Meanwhile, TMS (*1) outperformed the previous fiscal year as a result of proposal sales by GOAL^® (*2). Investment for maintaining and improving the express package delivery network with a view to the medium- to long-term growth of the express package delivery market has continued, such as the Company’s subsidiary Sagawa Express Co., Ltd. announcing new plans for a large-scale transfer center (Amagasaki-shi, Hyogo; to commence operation in July 2026) in October 2022. Furthermore, rising costs were controlled within a range that does not significantly impact performance during the current fiscal year by allocating personnel according to the volume handled and ongoing initiatives to improve productivity. However, based on heightened upward pressure on various expenses such as costs related to energy such as fuel and electricity, personnel expenses and outsourcing expenses, we announced to revise the reported fares for express package delivery from April 1, 2023 for the purpose of maintaining and improving express package delivery transportation infrastructure and the quality thereof. As a result, operating revenues from this business segment increased by 0.4% year on year to 1,047,364 million yen and operating income increased by 7.0% to 99,774 million yen.
In the Logistics Business, marine and air freight charges have decreased after peaking in the third quarter of the previous fiscal year. Marine and air freight volume decreased significantly due to factors such as concerns about an economic recession against the backdrop of rising prices and monetary tightening, and the impact of excess inventory centered on consumer goods in the United States. For medium- to long-term growth, we have taken steps to strengthen international transportation services, such as the Company’s consolidated subsidiary EFL Global LLC acquiring an American customs clearing company as a subsidiary, and EFL Global Logistics (Pte) Ltd. acquiring a Canadian logistics company focusing on forwarding as a subsidiary. In Japan, performance has been steady by receiving contracts for new business through comprehensive solution proposals made by GOAL^®. As a result, operating revenues from this business segment decreased by 34.0% year on year to 314,877 million yen while operating income decreased by 60.3% to 19,239 million yen.
In the Real Estate Business, the Group made planned sales of real estate holdings. As a result, operating revenues from this business segment increased by 73.1% year on year to 19,549 million yen while operating income increased by 50.3% to 9,938 million yen.
In Other Businesses, although there was an increase in transactions for logistics IT projects in 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 7.1% year on year to 52,818 million yen and operating income decreased by 7.8% to 4,294 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 partial economic recession caused by factors such as rising prices, the continuation of weakening of the yen in foreign exchange markets, and the spread of geopolitical risks. Under such conditions, the Group is continuing to pivot around the key strategies of enhancement of comprehensive logistics solutions (GOAL^®), expansion of management resources leading to the creation of competitive advantages as the second year of the Medium-term Management Plan entitled “SGH Story 2024,” and based on the changes in the environment from the time the Medium-term Management Plan was established, such as the progression of inflation and the slowdown of the global economy, we will engage in various initiatives as key points to establish a growth base by making internal and external resources more robust through such measures as raising wages for employees and strengthening relationships with partner companies, and by expanding service areas.

(*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.

Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2024

Based on results for the fiscal year ended March 31, 2023 and current market trends, the forecast for operating revenues in the fiscal year ending March 31, 2024 was revised to 1,380,000 million yen.

Consolidated Earnings Forecast for the Fiscal Year Ending March 31, 2024

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

Dividends

The forecast for dividends for the fiscal year ending March 31, 2024 is 52 yen per share.

Dividend Forecast

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https://www.sg-hldgs.co.jp/en/ir