Home > IR Information > Finance & Business Results > Account Closing Review

Account Closing Review

Consolidated Performance for the 1Q Fiscal year March 2019

(Units: millions of yen)

  Current period
results
Prior period
results
Year-on-year
comparison (%)
Net sales 67,083 61,898 8.4
Gross profit 10,585 9,949 6.4
Selling, General & Administrative Expenses 10,590 9,508 11.4
Operating income -4 440 -
Ordinary income 472 210 124.8
Net income attributable to shareholders of transcosmos inc. 258 123 109.5

Qualitative Information Regarding Consolidated Operating Results

The Japanese economy in the first quarter consolidated year-to-date period has been in a moderate recovery trend, including improvements in employment conditions and corporate earnings, as well as an increase in capital investment. On the other hand, the risk of a decline in corporate sentiment has become apparent due to factors such as sharp increases in raw material prices and labor shortages. There are also influences such as uncertainties in overseas economies, including the intensifying trade friction between the United States and other countries, all of which result in an uncertain outlook for conditions going forward.
In the environment surrounding the services offered by our group, there is expanding demand for outsourcing services related to improvements such as increased business efficiency, enhanced cost competitiveness, and sales expansion for companies facing a backdrop that includes a declining labor force, the globalization of business, and the progress of digital technology including IoT and AI. Against this setting, in addition to existing services, our group has actively developed initiatives including new services that we have been working on for future growth in Asian markets, with a focus on Japan, China and South Korea, and this has led to an increase in orders.
Meanwhile, we have continued strengthening initiatives including the development and delivery of unique services that utilize digital technology and the acceleration of overseas expansion.
In our efforts to utilize digital technology, we have integrated the advanced technical capabilities of our AI research laboratory, the “Communication Science Lab,” with the operational know-how we have cultivated in our contact center operations up to now. We have also developed an automatic response quality judgment AI for our contact centers and we are aiming for full-scale deployment in fiscal 2018. In addition, we have also started providing facility management and one-stop services with ICT for building owners and building management companies through a collaboration of Yasui Architects & Engineers, Inc., our company, and our consolidated subsidiary Applied Technology Co., Ltd. Furthermore, we have released an AR application called “Nihon Chokuhan AR App” that links with the pages of the general catalog for the “Nihon Chokuhan” mail order brand that is operated by our company. In addition, our subsidiary transcosmos research and development, Inc. has started up business operations. It conducts R & D and provides services with the aim of streamlining operations, reducing costs and maximizing profits by utilizing digital technology.
Overseas, a subsidiary in China acquired advertising agency rights from Tencent Holdings Ltd., a leading Chinese Internet services company. As a result, we will start providing ad delivery services to client companies in China via Tencent platforms including “WeChat” and “QQ.” In addition, with the goal of leveraging Japan’s IT technology to provide a new sports experience, the limited liability company DMM.com, STVV N.V. (Head Office: Belgium), Candee, Inc. and our company began a Connected Stadium business aimed at employing ICT in Belgium’s soccer stadiums.

Business Conditions by Segment Category

1. Parent company

As a result of factors such as increased demand for outsourcing services at our company, sales volume reached ¥49.985 billion, resulting in a revenue increase of 2.1% compared with the same period last year. With regard to profit and loss on the other hand, there was a segment loss of ¥57 million (there was a segment profit of ¥638 million in the same period last year) due to factors such as the implementation of upfront investments last year.

2. Domestic subsidiaries

With respect to affiliated companies in Japan, due to an increase in orders at some subsidiaries sales volume reached ¥4.859 billion, resulting in a revenue increase of 4.4% compared with the same period last year. With regard to segment profit, as profitability improved due to the business restructuring of some subsidiaries, revenue increased by 239.7% compared with the same period last year to ¥144 million.

3. Overseas subsidiaries

With respect to affiliated companies overseas, orders for services in China and Korea were favorable and sales volume reached ¥14.14 billion, resulting in earnings growth of 36.3% compared with the same period last year. With regard to profit and loss on the other hand, there was a segment loss of ¥82 million (there was a segment loss of ¥235 million in the same period last year) due to factors such as improved profitability in Korean subsidiaries, China offshore business and ASEAN subsidiaries.

* Note that segment profit is based on operating income in the quarterly consolidated income statement.

Net sales per segment for Consolidated Performance for the 1Q Fiscal year March 2019

Business Conditions by Segment Category

* Note: Elimination of inter-segment transactions of ¥-1,902 million is not included.

Return to top

PrivacyMark