SG Holdings Co., Ltd. hereby announces the financial results for the first quarter of the fiscal year ending March 31, 2024.
　
In the first quarter of the fiscal year ending March 31, 2024, the economy gradually recovered as the legal category of novel coronavirus infections (hereinafter referred to as “COVID-19”) downgraded and restrictions on socioeconomic activities lifted. Meanwhile, there was a decrease in the number of packages handled in the Delivery Business, and a decrease in the volume of ocean and air cargo along with a continued fall in freight tariffs in the Logistics Business. As a result, during the three months ended June 30, 2023, operating revenues decreased 17.7% year on year to 318,511 million yen and operating income decreased by 43.4% year on year to 18,832 million yen.

Fiscal Year Ending March 31, 2024 1Q Results

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

Overview by Segment

In the Delivery Business, although the unit price continues to be affected by the decrease in handling of large packages, this was exceeded by the effects of the revision of reported fares from April 2023 and efforts to receive appropriate freight tariffs in each transaction, resulting in an increase from the same period in the previous year. Furthermore, efforts continued to enhance productivity and convenience for customers through various forms of digitalization such as establishing an official Sagawa Express account for the LINE communication app operated and developed by Line Corporation in April 2023, enabling the use of functions including “delivery schedule notification” and “package inquiry service” on LINE. Meanwhile, the number of both BtoB and BtoC packages handled decreased year on year due to the impact of weakening consumer spending after adjustment of prices. Furthermore, proposal sales for TMS^*1 continued to be made by GOAL^®*2, but results decreased slightly from the same period of the previous year due to the absence of business related to COVID-19 that had been received in the previous fiscal year. As a result, operating revenues decreased by 2.5% year on year to 251,928 million yen and operating income decreased by 21.8% to 17,164 million yen.
In the Logistics Business, marine and air cargo volume decreased significantly due to factors such as concerns about an economic recession against the backdrop of monetary tightening resulting from rising prices, and sluggish consumer sentiment in the United States. Marine and air freight charges also decreased, falling further than the level at the end of the previous fiscal year. As a result, operating revenues decreased by 55.1% year on year to 51,244 million yen and there was an operating loss of 1,139 million yen (operating income of 8,331 million yen in the same period of the previous fiscal year).
In the Real Estate Business, progress was made according to plan. As a result, operating revenues from this business segment decreased by 2.4% year on year to 1,855 million yen while operating income increased by 10.9% to 1,164 million yen.
In Other Businesses, as a result of the recovery in sales of new vehicles that had been performing poorly in the previous fiscal year due to the impact of factors such as the semiconductor shortage, operating revenues increased by 8.3% year on year to 13,481 million yen while operating income decreased by 7.9% to 1,161 million yen.

Future Outlook

Although the economy is on a trend of recovery from the slump caused by COVID-19, the outlook remains uncertain due to concerns about an 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. The SG Holdings Group will continue to engage in the enhancement of comprehensive logistics solutions (GOAL^®), the expansion of management resources leading to the creation of competitive advantages, and further advancement of governance, which are key strategies for the second year of the SGH Story 2024 Mid-term Management Plan. 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, in order to realize sustainable growth, we will engage in various initiatives focusing on establishing 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. Through these initiatives, the SG Holdings Group will provide transportation services that flexibly meet the needs of customers.

*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, 2024

Based on the results for three months ended June 30, 2023 and economic trends, we have revised the earnings forecasts for the fiscal year ending March 31, 2024 announced on April 28, 2023.

（１）Revisions to the consolidated earnings forecast for the six months ending September 30, 2023 (April 1, 2023 to September 30, 2023)

（２）Revisions to the consolidated earnings forecast for the fiscal year ending March 31, 2024 (April 1, 2023 to March 31, 2024)

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