SG Holdings Co., Ltd. hereby announces the financial results for the second quarter of the fiscal year ending March 31, 2024.

In 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 ocean and air freight tariffs remaining low in the Logistics Business. As a result, during the six months ended September 30, 2023, operating revenues decreased 14.4% year on year to 643,378 million yen and operating income decreased by 39.7% year on year to 38,666 million yen.

Fiscal Year Ending March 31, 2024 2Q Results

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

Overview by Segment

In the Delivery Business, the number of both BtoB and BtoC packages handled decreased year on year due to the impact of factors such as weakening consumer spending after adjustment of prices. In addition, 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. Meanwhile, although the increase in the percentage of small packages is a downward factor, the average unit price rose year on year due to the effects of the revision of reported fares from April 2023 and efforts to receive appropriate freight tariffs in each transaction. 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 (currently LY Corporation) in April 2023, enabling the use of functions including “delivery schedule notification” and “package inquiry service” on LINE. As a result, operating revenues decreased by 2.4% year on year to 504,920 million yen and operating income decreased by 21.3% to 34,534 million yen.
In the Logistics Business, ocean and air cargo volume decreased 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 remained low. As a result, operating revenues decreased by 48.0% year on year to 106,338 million yen and there was an operating loss of 1,640 million yen (operating income of 14,516 million yen in the same period of the previous fiscal year).
In the Real Estate Business, performance progressed according to plan. As a result, operating revenues from this business segment increased by 3.9% year on year to 3,814 million yen while operating income increased by 15.0% to 2,310 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 10.5% year on year to 28,304 million yen while operating income decreased by 8.2% to 2,315 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 weakening of the yen in foreign exchange markets, the continuation of monetary tightening policies worldwide and the spread of geopolitical risks. Under such conditions, 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. Furthermore, the consolidated subsidiary Sagawa Express Co., Ltd. will revise its reported fares in April 2024. This is to enable us to maintain the provision of high-quality logistics services as a corporate group handling logistics as a form of social infrastructure based on rising costs including energy and labor, in addition to the announcement of the “Policy Package for Logistics Innovation” by the government in June 2023, the “2024 problem” facing logistics companies, and making a long-term and continuous response with a view to addressing the shortage of transportation capacity in 2030.

(*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 cumulative second quarter results and market trends, the forecast for operating revenues in the fiscal year ending March 31, 2024 was revised to 1,340,000 million yen.

Details of Revision

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