TOKYO, Dec 4, 2015 - (ACN Newswire) - H.I.S. Co., Ltd. (TSE1: 9603), a leading travel and airline ticket agency, has announced results for the full year ended October 31, 2015. The Group achieved record results for the fifth consecutive year with consolidated net sales of 537,456 million yen, an increase of 2.7% compared with the previous fiscal year; an operating income of 19,970 million yen, an increase of 25.6% compared with the previous fiscal year; and an ordinary income of 22,685 million yen, an increase of 19.3% compared with the previous fiscal year. The Group also achieved record high net income of 10,890 million yen, an increase of 20.3% from a year earlier.
During the fiscal year under review, the travel market saw its demand for overseas travel affected by concerns over the international situation and infectious diseases as well as the weak yen trend. On the other hand, demand for domestic travel remained robust, driven by growing trend towards domestic orientation, backed by local tourism promotions and the registration of the World heritage sites. Turning to foreign travelers visiting Japan, demand from China and Southeast Asian countries climbed substantially, and the number of foreign travelers visiting Japan exceeded the number of Japanese leaving Japan for the first time, continuing to break records and showing strong growth.
Under these business environments, the Group placed priority on providing customers with safe and secure travel and strived to further improve quality by leveraging its domestic and international network to provide information and services to customers. Furthermore, the Group continued to take on a variety of challenges for the creation of new value, and commit itself to speedily deploying businesses with an eye on the future.
Share of revenues for each segment is calculated based on amounts before the elimination of inter-segment transactions.
- Travel Business
As for the product deployment, the Group strived to further enrich its lineup of products with the expansion of its business class packages and enhancement of a guided packaged tour "impresso", thereby promoting high value added products and increasing the unit price. The Group also focused on the deployment of targeted, specialized products. In the study tour, "Volunteering at Cambodian's orphanage & Angkor Wat for 6 days" won the "2015 Tour Grand Prix" in overseas travel section of the Chief Secretary of Japan Tourism Agency's Award. As a measure to strengthen the area of beach resort, the Group opened its original specialty outlet for Hawaii in Shinjuku 3-chome, Tokyo and Kumamoto prefecture, following the opening in Osaka Umeda Station last year. The Group also launched "LeaLea Points" which you can earn and redeem points for shopping and dining in affiliated shops in Hawaii.
As for initiatives in the IT business, the Group enabled arranging air tickets for international flights via air ticket apps, and worked to improve services using smartphones, including the development of "support on the go" apps and "visit Japan" apps. The Group also improved convenience of its website by strengthening search functions and simplifying a reservation process, as well as building a new customer base system.
As for the branch deployment, the Group opened a new concept branch in Omotesando, Tokyo. The Group also launched "Tourist Information Center" for travelers visiting Japan in Shinsaibashi, Osaka prefecture and Harajuku, Tokyo, marking the eighth location in Japan, through which further enhancing our support system, including tourist information and optional tour offerings.
Corporate or group travel remained steady, driven by an increase in orders for large scale group travel, including various events and corporate incentive travels. The Group also expanded "Travel Concierge Desk" services, available for Card Members only, and prepared to receive MICE travelers visiting Japan.
In the domestic travel business, we expanded our lineup of only one products which can be enjoyed at our dedicated beaches as well as designated hotel goods. Moreover, we strengthened our offerings in Okinawa as a priority destination. Furthermore, we promoted "landing-based tourism business" in collaboration with local governments, including "Yu (Hot Spring) Welcome Oita Campaign". In popular bus tours, departing and arriving stops were increased. As a result, our business remained strong.
As for foreign travelers visiting Japan, the business remained brisk as the number of travelers from China substantially rose, and the Group succeeded in receiving travelers from Southeast Asia by coordinating dedicated inbound travel teams, thereby strengthening individual travels.
Turning to overseas business, the Group focused on improving its brand recognition by actively exhibiting at local travel fairs held in Taiwan, Malaysia and other locations. Moreover, the Group expanded its business significantly by increasing the number of receiving travelers other than Japanese at each location, including travelers from China with promising prospects. In the Southeast Asian region, the Group has expanded to 29 branches in Thailand and 17 branches in Indonesia for local sales activities, and increased the number of overseas locations by launching a tour desk in Madagascar in the Indian Ocean. As of the end of October 2015, the Group has a network of sales domestically in 303 branches and globally in 62 countries, 130 cities and 200 branches, marking an increase of 27 branches from a year earlier.
As a result of these measures, the travel business for the current fiscal year recorded net sales of 476,174 million yen, an increase of 1.6% compared with the previous fiscal year. The Group achieved record high operating income of 12,535 million yen, an increase of 21.6% compared with the previous fiscal year.
- Theme Park Business
HUIS TEN BOSCH Co., Ltd. has evolved its popular events. In "The Kingdom of Light Series", one of the world's largest extravaganzas, over 11 million bulbs lighted up the theme park at night. In the "Kingdom of Flowers", "The Rose Festival" was held where 1,500 varieties of roses, amounting to approximately 1.11 million, the most seen in the series, were in full bloom. In May 2015, "Kingdom of Health and Beauty" was born as a new style of stay with the theme of "Healthier, More beautiful". In July, we embarked on a new challenge, opening a new concept "Henn-na Hotel", responding to ever-changing times, with view of achieving the world-class productivity. We held events of "Only One" or "No. 1" value, with a focus on five kingdoms so that our customers can enjoy the theme park throughout the year. We also implemented new rainy-day measures, and expanded seasonal events including fireworks and swimming pools. As a result, the number of visitors exceeded 3 million people for the first time in 15 years, and continued to show strong growth.
At newly launched LAGUNA TEN BOSCH, after the first year of operation following the business succession in August 2014, we have made effort to attract customers by implementing the Japan's first, 3D mapping illumination event and opening a beach park with the Japan's largest collection of air playground equipment. Moreover, we have launched "Sweets Cafe" and "Steak House" using locally produced material, and have taken a variety of measures to improve satisfaction of a wide range of customers. Consequently, our business moved into the black.
As a result, the Group recorded good performance in the theme park business, with net sales of 32,532 million yen, an increase of 24.0% compared with the previous fiscal year; and an operating income of 9,403 million yen, an increase of 21.8% compared with the previous fiscal year.
- Hotel Business
As a result of the measures taken to improve customer satisfaction and profitability at each hotel, namely Watermark Hotel Group (Gold Coast, Brisbane, Sapporo, and Nagasaki) and Guam Reef & Olive Spa Resort (Guam), the Group's results remained solid, with net sales of 6,429 million yen, an increase of 18.8% compared with the previous fiscal year, and operating income of 345 million yen, an increase of 32.7% from a year earlier. In May 2015, a new Watermark Hotel & Spa BALI JIMBARAN began its operation in Bali, Indonesia, and celebrated its grand opening in August.
- Transportation Business
ASIA ATLANTIC AIRLINES CO., LTD., an international charter carrier, deploys operations utilizing the characteristics of charters at maximum, with new charter flights between Japanese cities and Southeast Asia, in addition to flights departing and arriving at Narita International Airport. As a result, the Group recorded net sales of 2,787 million yen, a decrease of 14.4% compared with the previous fiscal year, and an operating loss of 1,347 million yen, compared with an operating loss of 1,792 million yen a year earlier.
- Kyushu Sanko Group
KYUSHU INDUSTRIAL TRANSPORTATION Group worked to provide customer orientated services in its bus business by increasing convenience for commuting, among others. Due to factors including the annually suspended services of Aso Ropeway and others caused by volcanic activities, as well as the preparation for the redevelopment of Sakura-machi in Kumamoto prefecture, the Group recorded net sales of 23,428 million yen, a decrease of 6.9% compared with the previous fiscal year and an operating income of 1,040 million yen, a decrease of 17.4% compared with the previous fiscal year.
Forecast for the Next Full Year Ending October 2016
Amid uncertainty about the state of the world situation, there are concerns about possible conflicts that could arise caused by heightened geopolitical risk, as well as factors which could affect the travel business. However, there are some promising areas of business, with rising demand for domestic travel, in addition to a growing number of foreign travelers from Southeast Asian countries and China, among others. On the other hand, the competition surrounding the travel market gets fiercer, with direct sales, evolving global online travel agencies, and emerging companies which offer a new travel-related service with the advancement of technology, so it is ever more important to keep a close eye on market trends.
Under these business conditions, we will strive to further improve our performance by leveraging our global network we have established, providing new services ahead of time in the global market, creating new value, and providing further customer satisfaction and safety.
At Huis Ten Bosch, we will promote our strategy of "Only One" or "No. 1" value, and further evolve our five main kingdoms: "Kingdom of Flowers", "The Kingdom of Light Series", "The Kingdom of Music and Show", "The Kingdom of Game" and "Kingdom of Health and Beauty". Moreover, we plan to build the second phase of "Henn-na Hotel" of the world-class productivity, and continue to embark on new challenges in businesses other than theme park, including energy and the development of service robots.
As a result of these measures, the Group expects to exceed the results of the current consolidated fiscal year for the next fiscal year.
Consolidated Operating Results (millions of yen)
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Full year ended October 31, 2015 % 2014 %
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Net Sales 537,456 2.7 523,246 9.1
Operating Income 19,970 25.6 15,906 34.3
Ordinary Income 22,685 19.3 19,016 25.1
Net Income 10,890 20.3 9,050 1.6
Net Income per Share (yen) 167.94 139.56
Net Income per Share, Diluted (yen) 157.22 137.61
Return on Equity (ROE) 11.6 10.8
Ordinary Income to Total Assets Ratio 7.7 7.6
Operating Income to Net Sales Ratio 3.7 3.0
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Consolidated Financial Position
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As of October 31, 2015 2014
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Total Assets 308,245 281,332
Net Assets 113,990 102,295
Shareholders' Equity Ratio (%) 32.3 31.5
Net Assets per Share (yen) 1,534.77 1,366.04
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Consolidated Cash Flows
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Full year ended October 31, 2015 2014
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Cash Flows from Operating Activities 12,597 23,701
Cash Flows from Investing Activities (28,177) (12,703)
Cash Flows from Financing Activities 16,253 37,033
Cash and Cash Equivalents at Year End 113,330 110,145
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Dividends (yen)
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Year Ended 2016 (Forecast) 2015
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26.00 22.00
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Forecasts for the Next Fiscal Year
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Interim % Full year %
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Net Sales 276,000 5.8 590,000 9.8
Operating Income 11,000 9.7 22,800 14.2
Ordinary Income 12,000 6.6 25,400 12.0
Net Income 5,800 13.7 12,300 12.9
Net Income per Share (yen) 89.44 189.67
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Contact:
H.I.S. Co., Ltd.
Satoshi Umemoto
Corporate Plannning Dept.
Tel: +81-3-5908-2070
Email: umemoto.satoshi@his-world.com
Topic: Earnings
Source: H.I.S. Co., Ltd.
Sectors: Daily Finance, Travel & Tourism
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