SG Holdings Co., Ltd. hereby announces the financial results for the third 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, which is the Group’s core business, and there was also a decrease in the volume handled in marine cargo and air cargo in the Logistics Business, in addition to freight charges remaining low. As a result, during the nine months ended December 31, 2023, operating revenues decreased by 10.8% year on year to 995,231 million yen and operating income decreased by 32.8% to 71,674 million yen.

Fiscal Year Ending March 31, 2024 3Q 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 due to the impact of factors such as weakening consumer spending after adjustment of prices. Although the increase in the percentage of small packages is a downward factor, the average unit price rose due to the effects of the revision of reported fares from April 2023 and efforts to receive appropriate freight tariffs in each transaction. In addition, proposal sales for TMS^*1 continued to be made by GOAL^®*2, but sales decreased due to the absence of business related to COVID-19 that had been received in the previous fiscal year. Furthermore, the Group has continued initiatives to improve customer convenience and productivity through the promotion 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. These efforts also included a joint project from December 2023 with Sumitomo Corporation and US startup developer of AI robotics software Dexterity, Inc. to conduct a demonstration experiment of the logistics industry’s first “AI-equipped loading robot” as part of efforts to address the shortage of transportation capability in future. As a result, operating revenues decreased by 2.2% year on year to 784,434 million yen and operating income decreased by 18.1% to 66,111 million yen.
In the Logistics Business, although there have begun to be signs of a recovery in consumer sentiment in the United States, ocean and air cargo volume decreased due to factors such as continuing concerns about an economic recession against the backdrop of monetary tightening resulting from rising prices. Although there were some increases in marine and air freight charges, they remained low overall. As a result, operating revenues decreased by 39.2% year on year to 163,467 million yen and there was an operating loss of 2,714 million yen (operating income of 17,948 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 2.2% year on year to 5,591 million yen while operating income increased by 11.5% to 3,410 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 7.4% year on year to 41,737 million yen while operating income decreased by 12.9% to 2,980 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 is to pivoting around the key strategies of enhancement of comprehensive logistics solutions (GOAL^®), expansion of management resources leading to the creation of competitive advantages and further enhancement of governance in the second year of the SGH Story 2024 Mid-term Management Plan, 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, continuing to provide stable logistics services while flexibly responding to various changes.
　

(*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 third quarter results and economic trends, the forecast for operating revenues in the fiscal year ending March 31, 2024 was revised to 1,300,000 million yen.

Details of Revision

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