Profit Tumbles for Nippon Express

Profit Tumbles for Nippon Express

Nippon Express Co., Japan’s largest international freight forwarder, said that its group net profit plunged 34.2 percent in the first half of fiscal 2013, which started on April 1, from a year earlier to ¥7.443 billion ($75.9 million) despite revenue growth.

The Tokyo-based company’s group revenue rose 4.6 percent in the April-September period from the same six-month period last year to ¥835.758 billion. Its group operating profit surged 10.9 percent year-on-year to ¥17.456 billion.

Nippon Express said in its fiscal first-half earnings report that the domestic logistics market “showed signs of picking up” in the April-September period amid “a moderate recovery in the Japanese economy.”

But the international logistics market remained weak, largely due to “the unstable European economy and slowdown in China’s economic growth,” Nippon Express said.

Nippon Express blamed the sharp net profit decline in the April-September period on a big jump in extraordinary losses, which more than tripled from a year earlier to ¥11.502 billion.

Of the ¥11.502 billion extraordinary losses, ¥9.725 billion, or 84.6 percent, stemmed from additional pension benefits.

Nippon Express boasts one of the world’s largest global logistics networks.

The company’s revenue in the Americas soared 28.6 percent in the first half of the current fiscal year from a year earlier to ¥33.540 billion ($342.2 million). Its operating profit in the region also jumped 19.0 percent to ¥1.164 billion ($11.9 million).

Nippon Express revised slightly upward its initial group operating profit forecast for the whole of fiscal 2013, but it left unchanged its initial full-year group revenue and net profit forecasts. The company’s initial full-year forecasts were announced on May 8.

The company’s current full-year projections are: ¥1.690 trillion in group revenue, up 4.8 percent from fiscal 2012; ¥40.000 billion in group operating profit, up 20.5 percent from fiscal 2012; ¥25.000 billion in group net profit, up 4.9 percent from fiscal 2012.