During the consolidated first quarter under review (June 1, 2019, to August 31, 2019), the Japanese economy shifted toward moderate recovery against a background of improved corporate earnings; however, there are concerns about the risk of a downturn in the economy due to the impact of the consumption tax hike in October. Moreover, in regard to overseas economies, factors such as the impact of deteriorating US-China trade friction and the political situation in Europe means that the economic outlook remains as uncertain as ever.
Given this situation, the AUN Group’s top priority has been ensuring stability and expansion of profitability, and it has devoted its efforts to "expanding earnings in multilingual and overseas services in its marketing business", "creating new business models" and "strengthening organizational systems and human resource hiring and training".
With particular regard to "expanding earnings in multilingual and overseas services in its marketing business", given the expanding inbound market, the Group has been successful in capturing a wide range of demand by providing its expertise in multilingual marketing and high value-added services utilizing its network of overseas affiliates.
In the inbound market, the number of visitors from South Korea has declined significantly due to the deterioration of Japan-Korea relations, but the number of visitors from Southeast Asia remains strong, and it is expected that the demand for promotion in Japanese companies aimed at foreigners will continue to increase.
As a result of the above factors, performance in this consolidated cumulative first quarter saw a total turnover of 470.684 million yen (up 19.2% compared to the same period of the previous year), with an operating loss of 18.099 million yen (the operating loss was 31.118 million yen in the same period of the previous year), an ordinary loss of 19.472 million yen (the ordinary loss was 17.976 million yen in the same period of the previous year), and a quarterly net loss of 22.241 million yen attributable to parent company shareholders (the quarterly net loss was 18.109 million yen attributable to parent company shareholders in the same period of the previous year).
(1) Marketing business
In its marketing business, the Group provides various services supporting corporate marketing activities, including SEO (search engine optimization), PPC (pay per click, or search-linked advertising), social media advertising, and smartphone advertising to Japanese and foreign companies in Japanese and multiple other languages.
Backed by brisk demand in Asia for travel to Japan, in multilingual (non-Japanese language) promotions, which is a growth area, the Group devoted its efforts to new business areas, such as participation in government and administrative-related tender projects and strengthening sales promotions, and as a result, the acquisition of new business partners was steady, contributing to sales and profit growth.
By coordinating the management resources (people and information) of the company and overseas subsidiaries and utilizing these to mutual effect, the Group provided high value-added services in accordance with the different commercial practices of each country and the different promotional methods for each overseas site, and it was able to capture a wide range of demand.
The Group will continue to invest in the recruitment and education of global human resources in order to meet overseas and multilingual marketing demand, which is expected to grow further in the future.
As a result of the above, turnover for these services was 463.033 million yen (up 28.0% compared to the same period of the previous year), with a segment profit of 31.229 million yen (up 127.8% compared to the same period of the previous year).
(2) Asset business
In its asset business, the AUN Group has been leveraging the knowledge accumulated through its experience in overseas expansion to provide infrastructure such as offices for firms and condominiums for overseas employees, as well as selling and brokering real estate overseas.
In the previous consolidated fiscal year, the sale of real estate held for sale by a consolidated subsidiary in the Philippines and the resale of client-owned properties contributed to sales growth; however, during the consolidated first quarter under review, in light of the fact that property prices in the Philippines are rising and that the yen is appreciating against the Philippine peso, the Group was not actively engaged in the resale of properties. As a result, although sales and profits were negative compared to the previous year, the Group has built a foothold for the second quarter and beyond by holding seminars for sales agencies and actively engaging in promotional activities.
In order to construct a system capable of ensuring stable future earnings, the AUN Group will continue to be proactive in undertaking promotional activities, developing its sales agencies, uncovering new affiliated developers, and other activities, growing this into a business that contributes to the Group's earnings.
As a result of the above, turnover for these services was 7.650 million yen (down 76.8% compared to the same period of the previous year), with a segment loss of 5.176 million yen (the segment loss was 2.285 million yen for the same period of the previous year).