Tokyo, June 12, 2009 - (JCN Newswire) - H.I.S. Co., Ltd. (TSE1: 9603), a leading travel and airline ticket agency, has announced results for the first half ended April 30, 2009. Net sales fell from 173,282 million yen to 166,251 million yen, however as a result of various measures aimed at consolidating the Group's position, operating income rose from 2,548 million yen to 4,117 million yen, ordinary income rose from 2,721 million yen to 3,694 million yen and net income rose from 1,600 million yen to 2,350 million yen.
Within the travel industry, in response to fuel surcharges that remained high through the end of March and the impact of deteriorating economic conditions, overseas travel continued to contract, except to some areas of Asia such as Korea, where travelers could reap the benefits of the stronger yen. According to the Japan National Tourist Organization (JNTO), the (estimated) number of Japanese departing the country from November 2008 through April 2009 is expected to have fallen by 6.2% on the previous year to around 7,676,000 people, a decrease of approximately 510,000 people.
Under these conditions, the Group aimed to generate demand for overseas travel for its travel business, the Group's largest segment, and took various sales steps, such as aggressively expanding advertising to target not only experienced travellers, the young, and individuals, the Group's core customers, but also corporate/group, seniors, and the wealthy.
The Group worked to promote sales and generated overall demand for overseas travel. These activities included holding the customary "First Dream Fair" at the beginning of the year and implementing various measures centered on price appeals, such as launching the H.I.S. Overseas Travel Support Campaign in March, which is based on the stronger yen and lower fuel surcharges and aimed to win some of the government cash handouts paid to people residing in Japan and get more people to travel overseas, and linking up with the Visit World Campaign - a campaign to generate demand for overseas travel developed by "Visit the World Campaign" (VWC) 20 Million Person Promotion Office of the Japan Association of Travel Agents (JATA) whose slogan is "Travel Abroad More!")
As for the development of new products, this year (2009) is the 10th anniversary of the introduction of the "Impresso" brand of guided tours, and in commemoration of this, new products were introduced, including special programs such as chartered visits to popular tourist sights, particularly to Europe. In addition, since this year is also the 20th anniversary of the introduction of the "Ciao" brand of package tours, a key brand of package tours, two new brands were developed - "Ciaopresso", which is crammed full of each country's unique flavor, and "PREMIUM Ciao", which provides high-quality content and fastidious service.
In regards to sales channels, the Group worked to further raise customer convenience, and these efforts included the launch of a website specifically to sell supplementary travel products such as optional tours and the introduction of and subsequent improvements to touch-panel reservation terminals.
On the service front, the Group continuously strove to improve quality from a customer perspective. These efforts were centered on the Quality Control & Market Research Room and involved revising the content of pamphlets based on the opinion of customers, improving travel products by making detailed quality checks, and strengthening staff training as the types of customers grew and became more diversified.
Turning to overseas development, efforts were made to expand the network of overseas offices by continuing to open new ones so customers could travel with peace of mind. In addition, outbound operations were newly introduced or strengthen in some areas. Focus was also placed on expanding services at destinations, which included launching operations of H.I.S customer only trolleys on 3 lines in Honolulu, Hawaii, in April.
In order to strengthen the Group's overall travel business, the consolidated subsidiary ATB was dissolved on December 31, 2008, and the "travel" concept that the subsidiary had proposed until then was inherited by the Company and will continue to be developed and provided to customers. In January, the Group also took over operations of the exclusive agent Yumeya Co., Ltd., whose offices are mainly located in the area centered on Musashino-shi, Tokyo, and turned the offices into directly managed ones in order to build a system for more efficient and strong sales. Furthermore, in the same month, Ohshu Express Ltd, which recorded firm earning as a comprehensive train ticket agent for Europe, became the Company's subsidiary, which will improve the Group's ability to serve individuals planning their own trips to Europe.
As a result of implementing the various measures discussed above, the Group was able to substantially increase its share of Japanese passengers heading overseas to an estimated 17.9% from the 14.8% for the previous fiscal year. However, as a result of greater price competition among travel agents and concentrated customer leisure demand on "cheap, close, short" trips, including those to Korea that have a low unit price, net sales for the travel business during the first half regrettably declined 3.9% year on year to 165,262 million yen. Although net sales fell short of initial projections, operating income rose 69.1% year on year to 5,960 million yen for various reasons including a dramatic increase in the share of passengers departing from Japan and the benefits of efforts to strength the system to control the cost of sales which had been promoted.
Consolidated Financial Results for the First Half Ended April 30, 2009
Operating Results (millions of yen)
------------------------------------------------------------------------
Ended April 30, 2009 % 2008 %
------------------------------------------------------------------------
Net Sales 166,251 (4.1) 173,282 2.8
Operating Income 4,117 61.6 2,548 (13.4)
Ordinary Income 3,694 35.8 2,721 (18.7)
Net Income 2,350 46.9 1,600 (21.2)
Net Income/Share (y) 72.47 48.56
------------------------------------------------------------------------
Consolidated Financial Position
------------------------------------------------------------------------
As of April 30, 2009 2008
------------------------------------------------------------------------
Total Assets 102,919 103,746
Net Assets 43,461 45,210
Shlders' Eqty Ratio (%) 41.7 43.2
Shlders' Eqty/share (y) 1,324.45 1,381.81
------------------------------------------------------------------------
The Group operates two hotels in Australia, and the occupancy rates, particularly among corporate clients, for the hotel on the Gold Coast and the one in Brisbane declined making it difficult to reach initial forecasts. In addition to this, the appreciation of the yen impacted the translation of earnings into yen. Therefore, net sales declined 29.4% year on year to 992 million yen, and operating income shrank 75.7% to 49 million yen. The Watermark Hotel Sapporo, the first hotel that the Group operates in Japan, was opened in Sapporo, Hokkaido in December 2008. Since the hotel has just been recently opened it was excluded from the scope of consolidation.
While consolidated net sales declined 4.1% year on year to 166,251 million yen, consolidated operating income rose 61.6% to 4,117 million yen. However, as a result of non-operating expenses related to forward exchange contracts, ordinary income rose only 35.8% year on year to 3,694 million yen and net income grew 46.9% year on year to 2,350 million yen. The year-on-year changes provided above are reference figures.
As for the outlook for the Japanese economy, conditions are projected to remain harsh for the time being even though there are expectations for a recovery in some parts. Within the travel industry, it would be an exaggeration to call overseas travel trends favorable because of these economic conditions, but depending on how the new outbreak of influenza runs its course, the trend may further improve.
While the business environment is as discussed above, being conscious of the fact that customers are becoming thriftier, the Group will stress the sense that overseas travel is a value as a result of the strengthening of the yen and elimination of fuel surcharges, which has dramatically reduced the cost of travel, and will generate further demand for overseas travel. As for sales promotions, new products will be created and aggressive advertising will be developed for summer holidays, which are becoming less concentrated at a particular time, and the five-day holiday in September. The Group is also strengthening its efforts related to the corporate/group and senior markets, and increasing reservations during the off season will lead to growth in the overall markets. As for Internet-based travel sales, efforts will include expanding sales of both connecting flights and supplementary travel products and further improving convenience. In terms of strengthening service, the Group continues to define independent travel as its core competency, is working to improve product quality and to rapidly provide correct information through its overseas network of offices, and will strive to provide safe travel that customers can enjoy with peace of mind. In regards to personalized service, the Group will reinforce each employee's consulting and customer service abilities so that they can meet diverse needs and satisfy even experience customers by proposing the optimal travel and will work to differential itself from its competitors.
No revisions were made to the consolidated forecasts announced on March 13, 2009.
About H.I.S. Co., Ltd.
H.I.S. Co., Ltd. was founded in 1980 and pioneered the Japanese discount airline ticket industry. Today the H.I.S. Group is comprised of 56 subsidiaries and 9 affiliated companies around the world, and has become a leader in the Japanese travel industry. For more information, please visit http://www.his.co.jp/english/ .
Contact:
H.I.S. Co., Ltd.
Manabu Shimizu
Corporate Planning Division
Tel: +81-3-5908-2070
Fax: +81-3-5908-2423
Email: tp-shimizu@his-world.co.jp
June 12, 2009
Source: H.I.S. Co., Ltd.
H.I.S. Co., Ltd. (TSE: 9603)
From the Japan Corporate News Network
http://www.japancorp.net
Topic: Press release summary
View more news from these Sectors: Consumers
|
Print
Alerts
