Kintetsu World Express, Inc. : CEO Message is updated

CEO Message

Renewed on Nov 7, 2012

We take this opportunity to express our sincere appreciation for your continued support.

We would like to explain about our group's consolidated business results for the first six months of the fiscal year ending March 2013. In this period, there was a decrease in transport demand due to several factors such as the prolonged strength of the yen, the European financial crisis and the economies of the emerging countries slowing down, which resulted in an operating income of 127.203 billion yen, a 6.5% decrease over the same period last year and lower than the forecast at the beginning of the period. We, however, recorded an operating profit of 6.744 billion yen (a 1.3% year-on-year increase), an ordinary profit of 7.361 billion yen (a 3.9% year-on-year increase) and the first six months' current net profit of 4.835 billion yen (a 2.4 year-on-year increase). These are almost as we had expected in the plan at the beginning of the period. This was achieved thanks to continued effects of keeping fixed costs and liquidity costs low by a series of streamlining measures that we have been implementing since the economic downturn precipitated by the Lehman Brothers bankruptcy, in addition to our efforts to reduce the operating costs.

Recently, Japanese companies have been increasingly moving their production bases to other countries, and particularly the way they tap into the countries in Asia and Latin America is phenomenal. Because of this, need for transport that bypasses Japan is expected to increasingly grow.

Our group will maintain the superiority that we have built in East Asia, mainly in China and strengthen the operating base in remarkably growing Southeast Asia, in order to establish an overwhelming advantage in Asia.

To be specific, we are enhancing and improving our logistics facilities in Thailand, India, Indonesia, Vietnam and other countries, and accelerating the business expansion. In India, as we needed to build an operating base more speedily, we established a joint venture with a major logistics company, Gati Ltd. in June this year and began operation. As a result of this, we expect that our group's structure will make a leap forward in India, and that this will not only facilitate the growth in India, but also activate the freight movements in cooperation with other Asian countries, Americas and Europe, which will result in increased volume of goods that we handle worldwide.

In Latin America, we will newly establish a local corporation in Mexico in January 2013 and in Brazil in April the same year and begin operation. In Latin America where the economy is rapidly growing, automobiles, electronics and communication device-related plants have been constructed one after another, and investment in the industries has been increasing. In particular, the volume of airfreight forwarding services for automobile-related goods that our group handles significantly increased during the past year. We are planning to work to meet this tremendous transport demand even more through this structure enhancement.

The consolidated business forecasts for the fiscal year ending March 2013 are unchanged from the announcement that we made on May 9, 2012, even though the economic situation is expected to remain tough in the second half of the period, which are; an operating income of 300 billion yen (a 13.5% year-on-year increase), an operating profit of 15 billion yen (a 8.5% year-on-year increase), an ordinary profit of 15 billion yen (a 1.0% year-on-year increase), and a current net profit of 95 billion yen (a 0.5% year-on-year decrease).

We are determined to keep on working together as a team to achieve the goals for the last fiscal year in the medium-term management plan and to improve the competitiveness in the global market. We look forward to the continued support of our valued shareholders and investors.