Hitachi Transport Systems reports revenues up 16.2% but EBIT down 23% in Q3 2021

Hitachi Indian Subsidiary FLYJAC

Hitachi Transport System has reported its financial results for the quarter ending December 31, 2021. Revenues totalled ¥*0.6bn, up 16.2% year-on-year (y-o-y), with adjusted operating income up 10.1% y-o-y to ¥0.03bn. However, EBIT was down 23% to ¥0.03bn. Net income totalled ¥0.01bn.

The company stated that Q3 results were almost in line with its forecast as negative impacts of automobile and apparel-related demand were offset by profitability improvement in the freight forwarding business. Operating income for Q3 exceeded forecasts by ¥40m. Overall, approximately ¥0.2bn were recorded in cost of sales during the quarter in relation to transportation/delivery costs, etc. associated with the shipping mainly from Kanto to Western Japan.

Specifically, during the quarter, the company continued to suffer from sluggish growth in automobile production at VANTEC’s major customers and a decline in handling volume of winter clothing. Automobile production is expected to recover in Q4, but also shipping of certain automobile parts other than semiconductors is falling behind, which may have some impact on Q4 results.

Additionally, while domestic organic revenues in Q3 of 2020 enjoyed stay-at-home demand, there was no such strong demand and also handling volume of winter clothing decreased in 2021. In addition, cosmetics-related volume decreased due to lack of inbound demand.

The company however enjoyed better-than-expected results in global logistics especially due to continued high freight costs in the freight forwarding business. This was related to cargo space shortages in air freight and port worker shortages and container shortages due to backlog of container vessels in North America in ocean freight.  

Looking ahead, Hitachi Transport System aims to achieve sustainable increase of corporate value with younger management members in accordance with the new Mid-term Management Plan which starts from FY2022.

It is also planning to focus on high value-added services such as taking part in the production lines of its manufacturing customers. Furthermore, it foresees expansion of its logistics facilities, including opening more warehouses across Japan by using part of its existing locations to meet the increasing demand for hazardous substances.

Source: Hitachi Transport System

* $ = ¥115.4/€ = ¥128.8