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Message To Investors

To our Shareholders and Investors:

During the six months ended September 30, 2016, the economic environment continued to be plagued by ongoing uncertainties ahead with respect to slowing overseas economies, an appreciating yen and other such factors, despite signs of gradual economic recovery amid underlying strengths in corporate earnings. The Company also continued to face harsh operating circumstances as tight labor market conditions persisted. Operating in this environment, we worked toward achieving the objectives of the Long-Term Management Plan “DAN-TOTSU Management Plan 2019” and the Medium-Term Management Plan “DAN-TOTSU Three-Year Plan STEP.” To that end, we focused on creation of a business model for generating substantial added value by building a premium-quality network to enable efficient logistics and fusing together the Group’s business resources.

The Delivery Business generated firm revenues amid increasing delivery volume resulting from efforts geared to adding points of service access for the “TA-Q-BIN Compact” and “Nekopos” services, along with steps taken to increase sales to mail-order business operators.

In the non-delivery businesses, we took steps to expand our existing service offerings by enlisting the strengths of Group companies, while also drawing on Group-wide ties as we aggressively promoted solution sales geared toward addressing customers’ business challenges.

Our consolidated financial results for the six months ended September 30, 2016 are as follows.

(Millions of yen)

Item For the six months ended September 30, 2015 For the six months ended September 30, 2016 Change Growth (%)
Operating revenue 683,785 706,689 22,903 3.3
Operating income 18,000 20,943 2,943 16.4
Ordinary income 18,627 20,916 2,288 12.3
Profit attributable to
owners of parent
9,759 11,554 1,795 18.4

Initiatives for the entire Yamato Group

  • 1. 
    The Yamato Group has been pursuing its “Value Networking” design, on the basis of creating business models for generating a high level of added value through the combined efforts of our respective businesses, while at the same time contributing to growth strategies and international competitive strengths of the Japanese economy. Meanwhile, we are also taking steps to forge a robust corporate culture that acts as a foundation for business creation and development.
  • 2. 
    To further promote our “Value Networking” design, we have been crafting business models that deliver a high level of added value by leveraging the Yamato Group’s business network. Also, to address varied customer needs in Japan and overseas, we have been making more effective use of our innovative network platform consisting of the “Haneda Chronogate,” “Atsugi Gateway” and “Okinawa International Logistics Hub” facilities, in addition to our existing “last mile” network. We completed construction of our “Chubu Gateway” facility for handling services that provide high added value in September and began operating it in October, which now enables us to carry out frequent trunk-route transportation between gateways.
  • 3. 
    We continued to drive initiatives geared toward forging a more robust corporate culture. To that end, we worked on enhancing the efficiency and dependability of operations, in part by improving our transport systems and by using our information technology network to enable visual monitoring of operating volumes. In addition, we redoubled our employee education efforts and focused on building systems for ensuring that we honor promises made to our customers. Moreover, we actively engaged in CSR-related activities linked to Yamato Group business endeavors, such as through environmental and safety measures, and efforts to prosper communities.
  • 4. 
    In our business looking toward overseas markets, we have been working to forge inter-regional collaboration while strengthening our capabilities in respective geographic regions in order to invigorate our cross-border transportation services involving shipping between five points in Japan, East Asia, Europe and the Americas, with a focus on the ASEAN region. In August, our initiatives to actively promote building of our cross-border network in the ASEAN market included reaching an agreement with a Thai company regarding establishment of a joint venture that will carry out TA-Q-BIN operations in Thailand, and reaching another agreement regarding acquisition of a cross-border line-haul trucking company headquartered in Malaysia.
  • 5. 
    With the aim of improving customer convenience particularly in the mail order market, we have been working to establish an environment that ensures customers ease in picking up their parcels. To that end, we have embarked on efforts to build an open-type network of parcel lockers primarily in train stations and other such locations.
  • 6. 
    We have been taking aggressive action to reduce costs through efforts that include implementing thorough controls on costs linked to operating volumes and also pursuing measures to improve productivity, amid a deteriorating external cost environment marked by a tightening labor market.

We look forward to the continued support and encouragement of our shareholders and investors as we move to mobilize the collective powers of the Yamato Group and enhance our corporate value.

October 2016

Masaki Yamauchi

Masaki Yamauchi

President

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