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Message from the President and CEO

信太明

Thank you for your support. On Thursday, April 12, 2018, AUN Consulting Inc. announced its financial results for the Third quarter of the fiscal year ending May 2018. I would like to give a brief update on these results.

During the consolidated third quarter under review (June 1, 2017, to February 28, 2018), the Japanese economy continued its moderate recovery against a background of improved corporate earnings and a stronger employment and income environment, however an uncertain future remained due to the instability of the international situation.
With regards to the domestic internet advertising market, the primary area of business for the AUN Group, video advertisements for mobile devices have picked up and driven growth in the field of programmatic advertising. With internet advertising expenditures for 2017 reaching 1 trillion 509.4 billion yen (up 15.2% year-on-year), the shift toward internet media is continuing (Dentsu Inc. “2017 Advertising Expenditures in Japan”).
Additionally, in the inbound market, the number of tourists visiting Japan from abroad in 2017 was 28.69 million (up 19.3% compared to the same period of the previous year), the largest number of visitors since statistics started being collected in 1964 (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 third quarter 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.
As a result of the above factors, performance in this consolidated third quarter under review saw a total turnover of 1,376.249 million yen (down 3.3% compared to the same period of the previous year), with an operating loss of 14.369 million yen (an operating profit of 15.843 million yen for the same period of the previous year), ordinary loss of 19.086 million yen (an ordinary profit of 11.153 million yen for the same period of the previous year), and a quarterly net loss of 21.848 million yen attributable to parent company shareholders (quarterly net profit of 10.150 million yen attributable to parent company shareholders for the same period of the previous year).

1. Marketing services
Against a background of vigorous Asian-region demand for Japanese travel, the Group’s marketing services contributed to the expansion of business operations in the domain of multilingual (non-Japanese language) promotions by providing high value-added services making use of a network of global corporations.
On the other hand, due to partial terminations of Japanese PPC service agreements for Japan, the upfront investment in hiring and education of global human resources, and upfront costs, etc. accompanying the establishment of a Vietnamese subsidiary, sales and profits remained down compared to the same period of the previous year.
The Group should handle the demand of Japanese corporations for market expansion abroad that is expected to expand more and more in the future. While continuing to engage in recruitment and investment in education of global human resources, the Group aims for the early development of recruited talent and early monetization of newly established subsidiaries abroad.
As a result of the above, turnover for these services was 1,351.629 million yen (down 3.2% compared to the same period of the previous year), with a segment profit of 130.852 million yen (down 10.9% compared to the same period of the previous 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. During the current consolidated fiscal year, the AUN Group has been endeavoring to increase customer satisfaction and gain customer trust by taking the podium at not only foreign real estate seminars held by the Group itself, but also external seminars held in regions outside of Tokyo, including Osaka and Nagoya, to dispatch realistic information gained through on-site inspections.
On the other hand, costs have been preceding as a result of continuing aggressive activities such as the recruitment of human resources, expansion of the organization’s scale, promotional activities, and cultivation of newly partnered developers.
Further, accompanying the completion in this third quarter of the consolidated fiscal year of a property owned by the Group in the Philippines that was under construction at the time of purchase, business activities have begun aiming for its sale.
As a result of the above, turnover for these services was 24.620 million yen (down 11.0% compared to the same period of the previous year), with a segment loss of 28.105 million yen (a segment loss of 12.302 million yen for the same period of the previous year).

We look forward to your continued generous support.

AUN Consulting, Inc.
President & CEO
Akira Shida

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