ZERO : Financial Results for the Six Months of FY2024

Published February 14, 2025 at 12:58 a.m. UTC

Source: MarketScreener

Summary of Consolidated Financial Results for the Second Quarter Ending of the Fiscal Year June 30, 2025 [Based on IFRS]

					February 13, 2025
Company name:	ZERO CO., LTD.				Stock Exchange Listing: Tokyo
Stock code:	9028	URL: http://www.zero-group.co.jp/
Representative:	President & CEO			Toshihiro Takahashi
Inquiries:	General Manager of Corporate Planning Department	Takashi Date	TEL 044-520-0106
Scheduled Date of Submission of Semi-annual Report: February 14, 2025
Scheduled date to commence dividend payments:	March 14, 2025
Preparation of supplementary material on quarterly financial results:	Yes
Holding of quarterly financial results meeting:		Yes (For analysts)

(Amounts less than one million yen are rounded down)

1. Consolidated financial results for the second quarter ending of the fiscal year June 30, 2025 (From July 1, 2024 to December 31, 2024)

(1) Consolidated operating results (cumulative)

									(Percentages indicate year-on-year changes)
	Sales revenue		Operating income	Profit before tax	Quarterly income	Profit attributable to	Total comprehensive
									equity shareholders	income of the quarter
									of the company
	Millions of	%	Millions of	%	Millions	%	Millions of	%	Millions	%	Millions	%
	yen		yen		of yen		yen		of yen		of yen
2Q FY2024/2025	68,956	7.1	4,951	113.9	4,942	112.6	3,519	135.4	3,505	140.0	3,449	129.8
2Q FY2023/2024	64,399	0.2	2,315	8.0	2,324	8.5	1,495	3.5	1,460	1.7	1,501	8.0

	Basic quarterly earnings per share	Diluted quarterly earnings per share
	Yen	Yen
2Q FY2024/2025	207.12	207.10

2Q FY2023/2024	86.51	86.50

(Note) The provisional accounting treatment for the business combination was finalized in the third quarter of the fiscal year ending June 2024, and each figure for the

interim period of the fiscal year ending June 2024 reflects the details of this finalized provisional accounting treatment.
(2) Consolidated financial position
						Equity attributable to equity	Equity ratio attributable to
		Total assets	Total capital		equity shareholders of the
		shareholders of the company
							company

			Millions of yen		Millions of yen		Millions of yen		%
2Q FY2024/2025		73,612		40,581		39,914		54.2
FY2023/2024			70,733		37,873		37,209		52.6
2. Cash dividends
					Annual dividends per share
	1st quarter-end	2nd quarter-end	3rd quarter-end	Fiscal year-end		Total
			Yen	Yen		Yen		Yen	Yen
FY2023/2024		---		15.00	---			46.40	61.40
FY2024/2025		---		43.00
FY2024/2025								64.40	107.40
(forecast)
(Note) Amendment from the most recently announced dividend forecast: No
3. Forecast of consolidated financial results for the year ending June 30, 2025 (From July 1, 2024 to June 30, 2025)
							(Percentages indicate year-on-year changes)
							Profit attributable to	Basic earnings per
	Sales revenue	Operating income		Profit before tax		equity shareholders of
			share
							the company

	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	135,000	△4.1	8,100	30.2	8,100	30.1	5,500	32.5	325.46
(Note) Revisions from the most recently released business forecast: No

(Note)

Changes in significant subsidiary companies during the current quarter (Changes in the specific subsidiary companies following changes in the scope of consolidation): No

New  Co. (Company name),		Exclusions  Co. (Company name)
(2) Changes in accounting policies, changes in accounting estimates
 Changes in the accounting policies required by IFRS	:	No
 Changes in the accounting policies due to other reasons	:	No
 Changes in the accounting estimates	:	No

(3) Number of issued shares (common shares)
 Total number of issued shares at the end of the	2Q FY2024/2025	17,560,242 shares	FY2023/2024	17,560,242 shares
period (including treasury shares)
 Number of treasury shares at the end of the period	2Q FY2024/2025	791,823 shares	FY2023/2024	920,782 shares
 Average number of shares during the period	2Q FY2024/2025	16,923,109 shares	2Q FY2022/2023	16,884,539 shares
(total up to this quarter)

Earnings summary is not within the scope of the quarterly review by a certified public accountant or auditor

Explanation of the proper use of financial results forecast and other notes

The earnings forecast, and other forward-looking statements herein are based on the information currently available to the Company and certain assumptions that the Company considers reasonable. The actual results may differ significantly from these forecasts due to a wide range of factors such as economic status of the major domestic and international markets or exchange rates fluctuation.

File Name: Draft flash report of Q2 FY24

Updated: 2025/02/03 14:49:31

○ Attached Documents - Table of Contents
1. Qualitative information on interim financial results	2
(1)	Explanation regarding the operating results	2
(2)	Explanation of financial position and cash flow	4
(3)	Explanation regarding the future forecast information such as consolidated business forecast	5
2. Summary of interim consolidated financial statements and key notes	6
(1)	Summary interim consolidated financial position	6
(2)	Summary interim consolidated income statement	8
(3)	Summary interim consolidated statement of comprehensive income	9
(4)	Summary interim consolidated statement of changes in equity	10
(5)	Summary interim consolidated cash flow statement	11
(6)	Notes to the summary interim consolidated financial statements	13
	(Notes on going concern assumption)	13
	(Changes in Presentation)	13
	(Segment information)	13
	(Business Combination)	14
	(Significant subsequent events)	15

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File Name: Draft flash report of Q2 FY24

Updated: 2025/02/03 14:49:31

1. Qualitative information on interim financial results

Explanation regarding the operating results

During the current interim consolidated accounting period, while some regions of Japan's economy showed signs of weakness, the overall trend has been one of gradual recovery or improvement.

In the domestic automobile market, the total number of new vehicles sales decreased to 98.5% (statistical data of the Japan Automobile Manufacturers Association) as compared to the same interim consolidated accounting period of the previous year (hereinafter referred to as the same interim period of the previous year). While some manufacturers saw strong sales of new models, the overall domestic sales volume declined due to the continued impact of shipment suspensions resulting from the misconduct issues of certain automobile manufacturers in the first half of the previous year. On the other hand, the number of used vehicles registration and sales increased to 101.2% compared to the same interim period of the previous year. This was driven by a rise in demand for used cars as a substitute for new cars, whose market circulation was disrupted, as well as continued strong exports of used vehicles.

Number of units related to domestic distribution of automobiles

Domestic		July of 2023 to December of
	2023

Number of new vehicles sold
Domestic manufacturer	*1	2,202,824
(out of this, Nissan Motor)	*1	(229,968)
Foreign manufacturer	*2	125,662
Total of new vehicle sales		2,328,486
Number of registered used cars
Registered vehicles	*3	1,750,931
Light vehicles	*4	1,344,866
Total number of used vehicles		3,095,797
registered

	Units: vehicles
July of 2024 to December of	Compared to the
2024	previous year
2,180,689	99.0％
(229,664)	(99.9％)
113,315	90.2％
2,294,004	98.5％
1,787,325	102.1％
1,346,340	100.1％
3,133,665	101.2％

	Export		July of 2023 to December of	July of 2024 to December of	Compared to the
			2023	2024	previous year

New	vehicles	of domestic	*1		2,399,257	2,199,384	91.7％
manufacturers

Used	vehicles	(registered	*5		776,353	808,877	104.2％
vehicles)

1 Calculated from Japan Automobile Industry Association Statistics 2 Calculated from Japan Automobile Importers' Association statistics
	*3 Calculated from Japan Automobile Dealers Association statistics
*4 Calculated from Japan Mini Vehicles Association statistics	*5 Trial calculated from the number of export deleted registered vehicles in the Japan
	Automobile Dealers Association statistics

Against this market backdrop, our group's performance was as follows: revenue reached 68,956 million yen (107.1% of the same interim period of the previous year), operating profit was 4,951 million yen (213.9% of the same interim period of the previous year). And profit before tax amounted to 4,942 million yen (212.6% of the same interim period of the previous year). Additionally, interim profit attributable to owners of the parent company was 3,505 million yen (240.0% of the same interim period of the previous year).

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File Name: Draft flash report of Q2 FY24

Updated: 2025/02/03 14:49:31

The segment business results are as follows.

Domestic automotive related businesses

In our core vehicle transportation business, despite the enforcement of crew working hour regulations under the 2024 Logistics Issue, we were able to secure our transportation capacity by promoting a division-of-labor system for crew members, strengthening crew recruitment, and increasing payment rates to partner companies. As a result, we increased the number of units for transportation contracts. However, we also faced cost increases due to compliance with the 2024 regulations, rising recruitment and labor costs driven by the Consumer Price Index and minimum wage hikes, as well as higher vehicle and maintenance costs for carrier trucks. Amid these conditions, our efforts contributed to revenue and profit growth in the domestic automobile-related business: (1) We maximized daily revenue per carrier truck by minimizing empty vehicle transport sections through backhaul acquisition. (2) Zero Plus IKEDA Co., Ltd. performed well, and we further strengthened our business by consolidating SO-ING Co., Ltd. (3) Starting in January 2024, we sequentially raised transportation fees for new and used vehicles. These factors collectively contributed to an increase in both revenue and segment profit for the domestic automobile-related business.

As a result, revenue from the domestic automobile-related business reached 33,811 million yen (116.1% of the same interim period of the previous year), while segment profit amounted to 4,714 million yen (227.0% of the same interim period of the previous year).

In the vehicle transportation business, under the medium-term management plan through the fiscal year ending June 2027, we are focusing on the theme of "Returning to the Fundamentals of Quality" We are advancing initiatives such as "Further Responses to the '2024 Logistics Problem'-Reviewing the Role and Operations of Logistics Centers, Securing Transport Capacity," "Reducing and Addressing Accidents and Complaints," and "Promoting Digitalization."

Human resource businesses

In the shuttle service business, revenue increased as a result of implementing fare revisions at low-profitability locations and improving driver recruitment methods, which enabled successful hiring. This allowed us to secure new contracts and expand vehicle fleets for our Mobility as a Service (MaaS) business. The staffing services business saw an increase in revenue due to the rise in the number of dispatched drivers, while the airport-related staffing business also experienced revenue growth thanks to the recruitment of foreign workers, which increased the number of dispatches.

As a result of the increased revenue in each business, segment profit also increased.

As a result, revenue from the Human Resources Business reached 11,526 million yen (107.0% of the same interim period of the previous year), while segment profit amounted to 448 million yen (132.2% of the same interim period of the previous year).

(3) General cargo business

The Port Cargo Handling Business experienced a revenue decline due to a decrease in cargo handling volume for certain customers. Similarly, the Transportation & Warehouse Business saw a revenue decrease due to a reduction in handled cargo volume from key customers and a decline in available subcontracted trucks caused by the 2024 Logistics Issue. As a result, overall revenue for the General Cargo Business declined.

Segment profit increased due to cost reductions achieved through operational efficiency improvements, identifying unprofitable businesses in the transportation business, the successful launch of new warehouse handling projects and the acquisition of new customers which led to fill vacant warehouse space. As a result, the general cargo business achieved an overall profit increase.

As a result, the sales revenue of the general cargo business was 3,227 million yen (98.3% compared to the same interim period from the previous year), and the segment profit was 727 million yen (108.7% compared to the same quarter from the previous year).

(4) Overseas Related Businesses

In the used vehicle export business, revenue declined due to a delay in shipping caused by the timing of the issuance of used vehicle import permits in Malaysia. On the other hand, the vehicle transportation business in China achieved revenue growth despite struggles faced by Japanese automakers. This was due to securing new contracts with local Chinese manufacturers.

Segment income also increased for the overall overseas-related business as a result of the flexible selection of marine transportation methods by securing ship quotas, although competition in the export of used cars is getting fiercer. As a result, the sales revenue in the overseas related businesses was 20,391 million yen (96.1% compared to the same period from the previous year),

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File Name: Draft flash report of Q2 FY24

Updated: 2025/02/03 14:49:31

and the segment profit was 379 million yen (102.3% compared to the same interim from the previous year).

Additionally, corporate expenses not included in the above-reported segments (expenses related to the company's administrative departments), are recorded under the "Adjustment" category, as stated in "Section 2: Summary Interim Consolidated Financial Statements and Key Notes (Segment Information)". These expenses amounted to 1,317 million yen.

Explanation of financial position and cash flow

Status of Assets, Liabilities, and Equity

(Assets)

Current assets increased by 4,157 million yen (12.6%) compared to the end of the previous consolidated fiscal year to 37,152 million yen.

This was mainly due to an increase of 4,596 million yen in inventories.

Non-current assets decreased by 1,279 million yen (3.4%) compared to the end of the previous consolidated fiscal year, totaling 36,459 million yen.

This was mainly due to a decrease of 1,524 million yen in property, plant, and equipment, despite an increase of 368 million yen in goodwill and intangible assets.

As a result, total assets increased by 2,878 million yen (4.1%) compared to the previous consolidated fiscal year to 73,612 million yen.

(Liabilities)

Current liabilities increased by 1,425 million yen (5.9%) compared to the end of the previous consolidated fiscal year to 25,570 million yen.

This was mainly due to increases of 2,000 million yen in bonds and borrowings and 1,276 million yen in deposits received and other current liabilities, despite a decrease of 1,327 million yen in trade and other payables.

Non-current liabilities decreased by 1,255 million yen (14.4%) compared to the end of the previous consolidated fiscal year, totaling 7,459 million yen.

This was mainly due to a decrease in lease liabilities by 1,329 million yen.

As a result, total liabilities increased by 169 million yen (0.5%) compared to the end of the previous consolidated fiscal year to 33,030 million yen.

(Equity)

Total equity increased by 2,708 million yen (7.2%) compared to the end of the previous consolidated fiscal year, reaching 40,581 million yen.

This was mainly due to an increase in retained earnings by 2,725 million yen.

Cash flow status

Cash and cash equivalents (hereinafter referred to as "funds") at the end of the current interim consolidated accounting period increased by 1,116 million yen compared to the end of the previous consolidated fiscal year, amounting to 12,433 million yen.

The status of each cash flow during the current interim consolidated accounting period and the factors behind them are as follows:

(Cash flow from operating activities)

Funds provided by operating activities was 3,083 million yen (1,604 million yen in the same period of the previous year). The main cause of the increase in funds were interim profit of 3,519 million yen, 2,537 million yen for depreciation and

amortization expenses which are non-fund expenses and a decrease in trade receivables of 1,444 million yen; the main cause of the decrease in funds was an increase of 4,596 million yen in inventories.

(Cash flow from investment activities)

Funds used in investing activities was 1,676 million yen (expenditures of 2,862 million yen used in the same period of the previous year).

The main itemization breakdown for expenditures were 1,192 million yen for the acquisition of property, plant, and equipment and investment property, and 480 million yen for the acquisition of intangible assets.

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File Name: Draft flash report of Q2 FY24

Updated: 2025/02/03 14:49:31

(Cash flow from financing activities)

Funds used as a result of financing activities were 274 million yen (income of 4,390 million yen in the previous year).

The main itemization breakdown for expenditures were 1,502 million yen for lease liability repayments and 772 million yen for dividend payments, while the main itemization breakdown for income was a net increase of 2,100 million yen from short- term borrowings.

Explanation regarding the future forecast information such as consolidated business forecast There have been no revisions to the consolidated earnings forecast published on August 8, 2024.

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File Name: Draft flash report of Q2 FY24

Updated: 2025/02/03 14:49:31

2. Summary of interim consolidated financial statements and key notes

Summary interim consolidated financial position

		(Units: Million yen)
	End of the previous consolidated	End of the current interim
	accounting year	consolidated accounting period
	(June 30, 2024)	(December 31, 2024)
Assets
Current assets
Cash and cash equivalents	11,316	12,433
Trade and other receivables	17,326	15,924
Inventories	2,979	7,575
Other financial assets	877	720
Other current assets	494	498
Total current assets	32,994	37,152
Non-current assets
Tangible fixed assets	24,845	23,321
Goodwill and intangible assets	5,328	5,697
Investment properties	2,949	2,921
Investment accounting processed with equity method	516	535
Other financial assets	2,106	2,050
Other non-current assets	1,426	1,440
Deferred tax assets	565	493
Total non-current assets	37,739	36,459
Total assets	70,733	73,612

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File Name: Draft flash report of Q2 FY24Updated: 2025/02/03 14:49:31

		(Units: Million yen)
	End of the previous consolidated	End of the current interim
	accounting year	consolidated accounting period
	(June 30, 2024)	(December 31, 2024)
Liabilities and Equity
Liabilities
Current liabilities
Trade and other payable	9,892	8,565
Bonds and borrowings	5,100	7,100
Lease liabilities	2,872	2,804
Income taxes payable, etc.	1,867	1,413
Other financial liabilities	2	－
Other current liabilities	4,410	5,686
Total current liabilities	24,145	25,570
Non-current liabilities
Lease liabilities	6,276	4,946
Other financial liabilities	93	103
Retirement benefits liabilities	1,008	1,013
Other non-current liabilities	356	407
Deferred tax liabilities	979	988
Total non-current liabilities	8,714	7,459
Total liabilities	32,860	33,030
Equity
Capital	3,390	3,390
Capital surplus	3,484	3,429
Treasury stock	△614	△528
Other components of funds	841	790
Retained earnings	30,106	32,831
Total equity attributable to the equity shareholders	37,209	39,914
of the company

Non-controlling interest	663	667
Total Equity	37,873	40,581
Total liabilities and equity	70,733	73,612

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File Name: Draft flash report of Q2 FY24Updated: 2025/02/03 14:49:31

(2) Summary interim consolidated income statement
		(Units: Million yen)
	Previous interim consolidated	Current interim consolidated
	accounting period	accounting period
	(From July 1, 2023, to	(From July 1, 2024, to
	December 31, 2023)	December 31, 2024)
Sales	64,399	68,956
Cost of sales	△56,869	△58,407
Gross profit	7,530	10,549
Selling, general and administrative expenses	△5,405	△5,685
Other income	208	112
Other expenses	△17	△24
Operating profit	2,315	4,951
Financial profit	30	34
Financial expenses	△21	△40
Investment gain / loss through equity method (△ is loss)	0	△2
Profit before tax	2,324	4,942
Corporate income tax expenses	△829	△1,423
Interim profit	1,495	3,519
Attribution of interim profit
Equity shareholders of the company	1,460	3,505
Non-controlling interest	34	14
Interim profit	1,495	3,519
Interim profit per share
Basic interim profit per share (yen)	86.51	207.12
Diluted interim profit per share (yen)	86.50	207.10

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