TOKYO, June 8, 2012 - (ACN Newswire) - H.I.S. Co., Ltd. (TSE1: 9603), a leading travel and airline ticket agency, has announced results for the first half ended April 30, 2012. Consolidated net sales increased 14.4% year on year to 201,289 million yen, consolidated operating income rose 47.6% year on year to 5,039 million yen, ordinary income rose 48.2% year on year to 6,438 million yen, and net income fell by 9.5% year on year to 4,138 million yen.
Within the travel industry, there was a recovery trend in travel as the number of people traveling overseas increased on account of the stronger yen and travel demand rebounded following the fall-off after the Great East Japan Earthquake hit last year. According to the Japan National Tourist Organization (JNTO), the (estimated) number of Japanese departing Japan from November 2011 through April 2012 is forecast to have risen 13.5% compared to the previous year to around 8,982,000 people, an increase of approximately 1.067 million people. This is a forecast of a dramatic increase compared to last year.
Under these business conditions, in the core travel segment, the Group continued to strive to improve safety, security, service, and quality and implemented various highly-original measures to expand its travel business within Japan and overseas.
- Travel Business
As for initiatives within Japan related to the overseas travel business, the Group renovated its overseas airline ticket website in November 2011 in order to improve airline ticket sales. On account of the renovation, it is now possible to search prices for three days before and after the desired departure date. It is also easier to compare prices on account of various functions, one of which lists the lowest price for each airline company. Furthermore, the Group developed and introduced an application for smartphones including iPhones and Android phones with a voice recognition function, the first such one in Japan. As a result of these types of measures, Internet-based sales of travel products were generally firm.
As for the development of the Group's own travel products and services, it has become easier for people to consider traveling as regulations on cancellation fees for package tours for certain areas and a limited number of passengers and period have been loosened. Since February 2012, the Group has continued to be the exclusive agent for JetAsia Airways charter flights to Bangkok. In addition, the areas that the Ponta point service, a service for accumulating points, is available was expanded to overseas, including Seoul, Honolulu, Guam, and Bangkok.
Turning to corporate and group travel, the Group worked to strengthen sales of Olympic-related products, and these efforts included creating a special pamphlet for tours to see events at the London Olympics, which H.I.S. is the official travel agency of, and announced a total of 32 packages. In addition, the Group worked to raise convenience for corporate customers, and these efforts included efforts to link our corporate-customer system (SFIDA) with the overseas airline ticket website discussed above.
As for efforts related to the domestic travel business, the Group has tied up with All Nippon Airways (ANA) in order to strengthen both domestic travel and travel to Japan. Starting in March 2012, the Group launched sales of affiliated domestic travel products at domestic branches under the Ciao brand. The Group also took new steps to expand the domestic travel business, including launching the Sumayado service, a domestic lodging reservation website, in March 2012.
Turning to activities related to the overseas travel business, the Group strengthened both the H.I.S. VACATION business, Internet-based direct sales of products such as rooms at overseas hotels and optional tours created by overseas branches to both Japanese and overseas travelers from other countries, and the overseas outbound business, sales of travel products that depart locally to non-Japanese customers, mainly those in other Asian countries. In addition, the Group launched an online reservation website for Thai customers in Thailand. Efforts to construct online reservation websites rooted in the local community are also moving forward for various other Asian countries. The Group is also aggressively undertaking sales in the B2B business, handling customers from other travel companies, and steadily expanding the business. As for new branch openings, in April 2012, the Group opened a branch in Nairobi, Kenya - the second branch in Africa following the one in Cairo.
As a result of the various measures discussed above, the travel business (both within Japan and overseas) during the first half of the fiscal year was firm, and sales rose 14.0% year on year to 192,727 million yen. Operating income increased 28.2% year on year to 5,008 million yen for various reasons including sales activities that stress productivity.
- Hotel Business
In the hotel business, efforts to improve customer satisfaction and profitability at hotels the Group operates - two in Australia (the Gold Coast and Brisbane) and the two in Japan (Sapporo and Nagasaki) - resulted in sales increasing 10.9% year on year to 1,345 million yen and the Group recording an operating loss of 33 million yen.
- Theme Park Business
HUIS TEN BOSCH Co. Ltd. which operates the HUIS TEN BOSCH theme park, developed numerous special plans to commemorate the 20-year anniversary of its opening. The company held various events including the Great Tulip Festival with 300,000 tulips in full bloom and the Dragon Quest Exhibition-HUIS TEN BOSCH, the first one in west Japan, and opened Adventure Park, one of the largest sports facility in Japan. These and other new events and facilities were enthusiastically received by visitors, and spending per customer rose because of the greater spending opportunities in the park. Therefore, earnings were firm with sales increasing 28.1% year on year to 7,445 million yen and operating profit increasing 381.3% to 1,198 million yen.
- Transportation Business
On February 29, 2012, HTB CRUISE Co., Ltd.'s Ocean Rose made its first cruise from Nagasaki to Shanghai. Improvements reflecting requests from various parties are being made, and preparations for the ship to launch full operation in July are underway. While stressing safe operation, HTB CRUISE will expand the entertainment facilities on the ship and strive to capture new demand for travel to Japan among Chinese customers using the ship as a low-cost entertainment ship.
As a result, consolidated net sales increased 14.4% year on year to 201,289 million yen, consolidated operating income rose 47.6% year on year to 5,039 million yen, ordinary income rose 48.2% year on year to 6,438 million yen, and net income fell by 9.5% year on year to 4,138 million yen. During the first half of the previous fiscal year, the Group recorded a gain on sales of investment securities of 3,181 million yen under extraordinary income.
Consolidated Financial Results for the First Half Ended April 30, 2012
Operating Results (millions of yen)
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Ended April 30, 2012 % 2011 %
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Net Sales 201,289 14.4 175,923 14.1
Operating Income 5,039 47.6 3,415 44.6
Ordinary Income 6,438 48.2 4,343 117.7
Net Income 4,138 (9.5) 4,571 146.0
Net Income/Share (Yen) 127.62 140.97
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Consolidated Financial Position
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As of April 30, 2012 10/31/2011
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Total Assets 137,211 139,018
Net Assets 66,369 65,589
Shlders' Eqty Ratio (%) 46.0 45.3
Shlders' Eqty/share (Yen) 1,947.99 1,942.32
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Consolidated Cash Flows (CF)
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Ended April 30, 2012 2011
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CF from Operating Activities (822) (1,811)
CF from Investing Activities (12,337) 108
CF from Financing Activities (1,087) (1,822)
Cash and Cash Equiv / Period End 30,564 42,819
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Dividends (yen)
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Year Ended 2012 (Forecast) 2011
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32.00 32.00
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Outlook for the Full Year (millions of yen)
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Year Ending October 31, 2012 %
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Net Sales 446,000 17.1
Operating Income 12,000 27.6
Ordinary Income 14,000 27.2
Net Income 8,800 6.0
Net Income/Share (y) 271.38
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Outlook for the Full Year
Although there is growing uncertainty regarding the global economy, demand for overseas travel this summer is projected to continue to increase for various reasons including the introduction of low cost carriers to Japan, new flights from overseas, the sustained strong yen, and global events such as the London Olympics. It is also forecast that both the market for travel to Japan and domestic travel within Japan, which stagnated after the Great East Japan Earthquake, will recover and firm up. On the other hand, it is expected that it will become more important to respond to changes in the market, such as fiercer competition within the industry, including competition with airline companies that are developing more diverse points of contacts with customers and introducing direct sales.
Under these conditions, the Group will strive to improve its safety, security, service, and quality and to carefully respond to the needs of customers, and these efforts will include improving service at branches using the airline ticket search system introduced last year; introducing different language versions of its smartphone application; increasing sales of tours to see events at the London Olympics, which H.I.S. is the official travel agency of; actively making use of charter flights; and reinforcing the domestic travel business, such as the domestic lodging reservation website Sumayado. Overseas, the Group will create unique products and services and work to promptly implement numerous measures to expand and develop the travel business for flights departing from Japan or overseas.
In the hotel business, the Group will improve profitability and service at its hotels both in Australia and Japan. In April 2012, the Guam Reef Hotel located in Guam was incorporated into the Group. In the future, the Group will work to increase the number of people it introduces to the hotel and develop a new hotel style that satisfies customers.
HUIS TEN BOSCH Co. Ltd., which celebrated the 20-year anniversary of its opening, will exert its originality and creativity and move forward with various projects such as holding special events to commemorate the anniversary. In July 2012, HTB CRUISE Co. Ltd. plans to fully launch cruise service between Nagasaki and Shanghai and work to develop new demand for travel in China.
For the above reasons, our projections for the full fiscal year have not been changed from those announced on May 25, 2012.
Contact:
H.I.S. Co., Ltd.
Manabu Shimizu
Corporate Planning Division
Tel: +81-3-5908-2070
Fax: +81-3-5908-2423
Email: shimizu.manabu@his-world.com
Topic: Earnings
Source: H.I.S. Co., Ltd.
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