Thank you for your support. On Thursday, January 11, 2018, AUN Consulting Inc. announced its financial results for the second quarter of the fiscal year ending May 2018. I would like to give a brief update on these results.
During the consolidated second quarter under review (June 1, 2017, to November 30, 2017), the Japanese economy, despite an uncertain future due to the instability of the international situation, continues its moderate recovery against a background of improved corporate earnings and a stronger employment and income environment.
In the inbound market, the number of tourists visiting Japan from abroad between January to November 2017 was 26.16 million (up 19.0% compared to the same period of the previous year), recording a record high already exceeding the total number of visitors to Japan in 2016 (Japan National Tourism Organization (JNTO) "Visitor Arrivals"). With the economic growth of Asian countries, it is anticipated that the number of tourists visiting Japan will continue to increase and that the demand for promotions aimed at foreign visitors will continue to grow in Japanese companies.
Given this situation, the AUN Group’s top priority has been ensuring stability and expansion of profitability. In the consolidated second quarter period under review, the Group also devoted its efforts to strengthening overseas and multilingual marketing support, ensuring stable operations of its asset services, and focusing on strengthening the organization through human resources development, in order to expand business.
With particular regard to "strengthening overseas and multilingual marketing support" within marketing services, given the continued expansion of the inbound market, the Group will continue to provide high value-added services utilizing its multilingual expertise and network of overseas affiliates. In addition, in September 2017, the Group established a new subsidiary (AUN Vietnam Co., Ltd.) in the Socialist Republic of Vietnam, and commenced local business activities.
The Group has also continued to invest in human resources by hiring global human resources and conducting group training for executive candidates and managers of its Japanese and all its overseas subsidiaries.
As a result of the above factors, performance in this consolidated cumulative second quarter saw a total turnover of 943.433 million yen (down 1.5% year-on-year), with operating loss of 3.692 million yen (an operating profit of 9.139 million yen for the same period of the previous year), ordinary profit of 11.136 million yen (down 2.1% year-on-year), and quarterly net profit of 8.575 million yen attributable to parent company shareholders (down 16.0% year-on-year).
1. Marketing services
In the Group’s marketing services, profits in the domain of multilingual (non-Japanese language) promotions remain steady due to the background of vigorous Asian-region demand for Japanese travel; however, due to terminations of Japanese PPC service agreements for Japan and the upfront investment in hiring and education of global human resources, sales and profits were down compared to the same period of the previous year.
In addition, the Group established a subsidiary in Vietnam with the aim of expanding its sales network. The Group will continue to strive to further expand the development of its multilingual services in the Asian region and provide high value-added services utilizing its multilingual expertise and network of overseas affiliates, as well as continuing to engage in recruitment and investment in education of global human resources.
As a result of the above, turnover for these services was 926.284 million yen (down 1.1% year-on-year), with a segment profit of 92.180 million yen (down 0.5% year-on-year).
2. Asset services
In its asset services, the AUN Group has been providing infrastructure such as offices for companies and condominiums for overseas employees as part of its support for overseas expansion of Japanese companies in the Philippines and Vietnam, where high economic growth continues even compared to other ASEAN member nations. In order to further expand business in the future, during the current consolidated fiscal year the AUN Group has been devoting its efforts to promotional activities, such as participation in international real estate and investment conferences, commencing preview tours via VR (virtual reality) and holding individual consulting meetings and seminars. Executive personnel were hired from August 2017 and business activities under the new regime got underway.
As a result of the above, turnover for these services was 17.148 million yen (down 22.3% year-on-year), with a segment loss of 17.556 million yen (a segment loss of 3.348 million yen for the same period of the previous year).
We look forward to your continued generous support.