ZERO : FY2023 Financial Results

Summary of Consolidated Financial Results for the Fiscal Year Ended June 30, 2024 [Based on IFRS]

3. Forecast of consolidated financial results for the year ending June 30, 2025 (From July 1, 2024 to June 30, 2025)

(Note)

1. Changes in significant subsidiary companies during the current fiscal year (Changes in the specific subsidiary companies following changes in the scope of consolidation): No

In the current fiscal year, our company experienced a recovery trend in the number of domestic vehicle transportations, revised the fees in the vehicle transportation business. In addition, the number of pre-delivery inspections in the maintenance business increased. As a result, there is a difference between the operating income, profit before tax, and net income of the previous fiscal year and those of the current fiscal year.

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

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

1. 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.
2. At our company, business management is conducted on a consolidated basis; therefore, individual business results forecasts are not created.

*6 Calculated from statistics of Agency for Natural Resources and Energy (fuel used by our company for transport is mainly light oil)

For vehicle transportation, which is the core business, the number of units for transportation contracts for used vehicle increased in line with the recovery in used vehicle registrations and sales, despite the turmoil in the used vehicle industry in the first half of the year and the suspension of shipments due to misconduct issues at some new vehicle manufacturers in the second half, resulting in an overall increase in revenues in the domestic automobile- related business.

In addition to higher recruitment and labor costs due to higher consumer price index and minimum wage in the post-COVID-19 environment where the ratio of active job openings for crew members has increased, vehicle costs increased due to investments in transportation equipment in anticipation of the shift to EVs. On the other hand, in January 2024, we revised the fees in the vehicle transportation business. The number of pre-delivery inspections in the maintenance business increased, and in the construction machinery transportation business, requests for transportation from rental construction machinery companies increased due to the Noto Peninsula earthquake. Furthermore, the consolidation of SO-ING Co., Ltd. as a subsidiary in November 2023 led to a net increase in its profits. As a result, segment profit increased.

As a result, the overall sales revenue in the domestic automotive business was 63,775 million yen (109.6% compared to the same period from the previous year), and the segment profit was 6,994 million yen (138.2% compared to the same quarter from the previous year).

In the vehicle transportation business, the Group continued to implement the "Digitalization", "Greening", and "New normal" policies outlined in our mid-term management plan through June 30, 2024.

In the area of "Digitalization", we have set up the Transportation Digitalization Promotion Office and are promoting the construction of a system to realize systematic allocation of vehicles. We have also launched and are promoting a new digitalization project in which crew members record the condition of vehicles entrusted by customers using tablets.

In the area of “Greening”, we have completed the development of transportation equipment with an increased maximum loading capacity to cope with the increased weight of automobiles as they become more electrically powered, and we will sequentially introduce the equipment. In addition, as the shift to EVs accelerates, we are considering and promoting the construction of infrastructure, including the implementation of ancillary operations for EV vehicle transportation.

In response to the "New Normal", we are addressing the "2024 Logistics Problem" by maintaining the driving hours of crew members while promoting the division of labor in cargo handling to reduce indirect time other than driving hours. At the same time, we are also advancing the new recruitment of crew members and the efficient utilization of transportation equipment. However, in the midst of the chronic shortage of crew members, combined with rising consumer price indexes, minimum wages, and unit labor costs, it is necessary to maintain and improve compensation while reducing the total working hours of crew members, and to introduce new crew members and transportation equipment to compensate for the decrease in transportation capacity due to reduced total working hours.

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The pickup service business saw an increase in revenue due to the acquisition of new contracts and the expansion of the MaaS (Mobility as a Service) business. The human resource services business experienced revenue growth due to an increase in the number of dispatched drivers. The airport-related human resource business also saw an increase in revenue as the number of dispatched personnel rose, driven by the recovery in the number of aircraft arrivals and departures and the promotion of foreign worker recruitment. As a result of the increased revenue in each business, segment profit also increased.

As a result, the sales revenue of the human resource business was 21,638 million yen (104.9% compared to the same quarter from the previous year), and the segment profit was 810 million yen (108.0% compared to the same quarter from the previous year).

In the port cargo handling business, revenue from fuel cargo handling for biomass power plants increased due to acquisition of cargo handling for new power plants, but revenues in the transport / warehousing business decreased due to letting go of unprofitable customers, and revenue in the overall general cargo business slightly decreased as well. Segment profit increased in the port cargo handling business due to higher revenue. However, as a result of accounting for the losses from the fire that occurred at our Kawasaki Complex Logistics Center on January 11, 2024, overall profit in the general cargo business decreased.

As a result, the sales revenue of the general cargo business was 6,398 million yen (99.5% compared to the same quarter from the previous year), and the segment profit was 790 million yen (66.6% compared to the same quarter from the previous year).

In the used vehicle export business, during the first half of the year, the limited availability of car carriers due to the strong demand for new vehicle exports from Japan, driven by the weak yen, forced us to restrict the number of used vehicle exports to Malaysia. However, in the second half of the year, we were able to secure sufficient ship slots, leading to increased revenue. Additionally, the vehicle transportation business in China saw an increase in revenue due to the acquisition of new customers. On the other hand, the CKD business experienced a decrease in revenue in the second half of the year due to a reduction in the number of packed units.

Regarding segment profit, the used vehicle export business and the vehicle transportation business in China saw an increase in profit due to the higher revenue. However, the CKD business conducted an impairment test due to our customer’s shift in ASEAN strategy . As a result, we recognized an impairment loss of the right-of-use assets at the Ashikaga Parts Logistics Center (warehouse), leading to an overall decrease in profit for the overseas-related business.

As a result, the sales revenue in the overseas related businesses was 48,938 million yen (102.7% compared to the same period from the previous year), and the segment profit was 76 million yen (15.6% compared to the same quarter from the previous year).

Furthermore, the company expenses not including the above mentioned segment-wise loss and profit (expenses affiliated with our company’s management division), etc. are allocated as an item in the “adjustment amount” as indicated in “3. Consolidated financial statements and major notes (6) Notes on consolidated financial statements (Segment information)” in the summary of consolidated statements for the quarter, and totalled 2,450 million yen.

1. Summary of financial position of the current fiscal period Status of assets, liabilities, and equity

(Assets)

Current assets increased by 6,961 million yen (26.7%) compared to the end of the previous consolidated fiscal

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