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H.I.S. Reports Record Results for the Seventh Consecutive Half; Sales Up 13.9%, Operating Income Up 9.6%, Net Income Up 16.6%.

Tokyo, Japan, June 22, 2007 - (JCN Newswire) - H.I.S. Co., Ltd. (TSE1: 9603), a leading travel and airline ticket agency, has announced record results for the seventh straight half, ended April 30, 2007. As the Group actively sought to increase share in the industry, consolidated net sales for the period improved 13.9% to JPY 168,621 million, operating income increased 9.6% to JPY 2,942 million and net sales rose 16.6% to JPY 2,030 million.

The Japan National Tourist Organization (JNTO) estimated the number of Japanese departing the country from November 2006 through April 2007 rose only very slightly by 0.6% on the previous year. However, amid these conditions, the H.I.S. Group continued to engage in active marketing to its key client segments - individuals, young people, and seasoned overseas travelers - to secure steady travel demand for the Groups travel business.

"In line with its strategy, the Group continued aggressively promoting key points in its business plan this term, resulting in a 5.9% increase in H.I.S. travel passengers on the previous year," said Yoshio Suzuki, President of H.I.S. "We have worked to put the infrastructure in place which responds in a more finely-tuned fashion to the increasingly diverse purposes of travel for each and all of our clients, stepped up earlier customer attraction through earlier promotions, and inreased unit prices per customer by around 4.5%, despite fuel surcharges, through higher grade product offerings."

The Group continued to make improvements in travel accessory products such as hotel and rental car reservations and insurance sales for arranged travel, while continuing to improve on our strengths in price competitiveness and consulting capabilities even further. Regional flagship branches for the Travel Wonderland Shinjuku sales branch and the Travel Wonderland Nagoya sales branch were renovated, adding specialty sections.

Such marketing measures resulted in a 13.9% increase in interim sales for the Travel Business to JPY 167,580 million and a 9.1% increase in operating income to JPY 3,995 million.

The strong Australian economy continued to boost the hotel business and the hotels on both the Gold Coast and in Brisbane continued to maintain high occupancy rates, leading to strong sales. We also set the goal of improving service even more and made investments in training targeted at adding more employees and training.

These measures resulted in a 19.7% increase in interim sales for the Hotel Business to JPY 1,057 million and an 13.9% decrease in operating income to JPY 140 million.

1. Consolidated Financial Results for the First Half Ended April 30, 2007
------------------------------------------------------------------------
 (millions of yen)
 First Half ended April 30, FY Oct. 31,
 2007 % 2006 % 2006
------------------------------------------------------------------------

Net Sales 168,621 13.9 148,020 12.9 328,980
Operating Income 2,942 9.6 2,685 45.5 7,235
Ordinary Income 3,347 12.6 2,973 23.8 8,082
Net Income 2,030 16.6 1,741 (32.3) 4,867

Net Income/Share (y) 60.82 52.17 145.79

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Consolidated Financial Position
------------------------------------------------------------------------
 As of April 30, FY Oct. 31,
 2007 2006 2006
------------------------------------------------------------------------

Total Assets 96,344 87,458 92,520
Net Assets 46,301 43,075 44,149
Shlders' Eqty Ratio (%) 47.6 49.3 47.3
Shlders' Eqty/share (y) 1,374.93 1,290.24 1,311.29

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Consolidated Cash Flows
------------------------------------------------------------------------
 (millions of yen)
 First Half ended April 30, FY Oct. 31,
 2007 2006 2006
------------------------------------------------------------------------

Cash Flow from
 Operating Activities 1,511 1,006 9,610
Cash Flow from
 Investing Activities (583) (2,820) (5,370)
Cash Flow from
 Financing Activities (671) (721) (732)
Cash and Cash Equivalents
 at Period End 37,139 30,468 36,515

------------------------------------------------------------------------


2. Financial Position

1) Assets, Liabilities, and Net Assets

Total assets as of the end of the interim consolidated fiscal period increased by JPY 3.823 million from the end of the previous consolidated fiscal year to JPY 96,344 million. This resulted mainly from an increase in trade accounts receivable, which rose by JPY 1,963 million over the end of the previous fiscal year, and an increase in short term loans, which increased by JPY 1,881 million over the end of the fiscal year.

Liabilities as of the end of the current consolidated interim period rose JPY 1,672 million compared with the end of the previous consolidated fiscal year to JPY 50,042 million. This resulted mainly from an increase of JPY 5,008 million in trade accounts payable, a decline of JPY 1,085 million in unpaid corporate and other taxes, and a decline in trip prepayments of JPY 1,958 million from the end of the previous fiscal year.

Net assets as of the end of the current consolidated interim fiscal period increased by JPY 2,151 million over the end of the previous consolidated fiscal year to JPY 46,301 million. This resulted mainly from JPY 2,030 million in interim net income booked.

2) Consolidated Cash Flows

The balance of cash and cash equivalents as of the end of the current consolidated interim period rose by JPY 624 million over the end of the previous consolidated fiscal period to JPY 37,139 million. Cash inflow from operating activities was JPY 1,511 million, cash outflow from investment activities was JPY 583 million, and cash outflow from financing activities was JPY 671 million.

Cash flow from operating activities

Cash inflow from operating activities for the current consolidated interim fiscal period was JPY 1,511 million. The primary factors behind the increase were the booking of JPY 3,330 million in interim net income before taxes and other adjustments and an increase of JPY 4,683 million in trade accounts payable. This increase in trade accounts payable includes JPY 3,549 million in trade accounts payable that were paid in the next month since the settlement date for the end of the current consolidated interim fiscal period fell on a bank holiday. The main factors responsible for decreases were an increase in trade accounts receivable (representing an outflow of JPY 1,729 million), a decrease in trip prepayments (an outflow of JPY 1,994 million), and payment of corporate and other taxes (an outflow of JPY 2,361 million).

The cash inflow from operating activities for the previous consolidated interim fiscal period was JPY 1,006 million. The main reasons for this were the booking of JPY 2,967 million in interim net income before taxes and other adjustments, an increase of JPY 2,215 million in trade accounts payable, and an increase in trade accounts receivable, which represented an outflow of JPY 3,059 million.

Cash inflow from operating activities for the current consolidated interim period therefore rose by JPY 505 million compared with the previous consolidated interim period.

Cash flow from investing activities

Cash outflow from investment activities for the current consolidated interim period was JPY 583 million. The main reason for cash inflow was the redemption of JPY 2,000 million worth of corporate debt by Sanko Soflan Co., Inc. The main reasons for cash outflow were the acquisition of securities for investment purposes (an outflow of JPY 742 million) and a loan to Kyushu Industrial Transportation Holdings Co., Ltd. an affiliated company (an outflow of JPY 2,000 million).

Cash outflow for investment activities for the previous consolidated interim period was JPY 2,820 million. This was mainly due to the acquisition of land and buildings for the commencement of business for Hotel Watermark in Brisbane (an outflow of JPY 1,268 million), and an investment in Kyushu Industrial Transportation Holdings Co., Ltd. (an outflow of JPY 733 million).

Cash flow from investment activities for the current consolidated interim period therefore improved by JPY 2,237 million compared with the previous consolidated interim period.

Cash flow from financing activities

Cash outflow from financing activities for the current consolidated interim period was JPY 671 million, primarily due to payment of dividends for the company (an outflow of JPY 667 million).

Cash outflow for financing activities for the previous consolidated interim period was JPY 721 million. This resulted primarily from the payment of dividends for the company (an outflow of JPY 584 million) and repayment of long-term debt at a subsidiary (an outflow of JPY 55 million).

Cash outflow from financing activities for the current consolidated interim period therefore rose by JPY 50 million compared with the previous consolidated interim period.

3. Forecasts for the Full Year

While the trend in oil prices, fluctuation in exchange rates, and other factors persist as sources of concern for the travel business, personal consumption has risen and the employment market has improved with improving corporate profits. We therefore project a gradual rise in demand for overseas travel.

In particular, we expect demand to rise among families and young female office workers for travel to the beaches and for travel to Europe as summer, the best season, approaches. Further rise in demand for corporate travel bookings to China and various Asian cities is also projected.

The H.I.S. Group will continue to focus on the concept of free travel and on improving brand recognition for the various products amid this environment in order to encourage greater demand for overseas travel in general. We will improve our ability to provide seats as we also create products to respond to the ever greater diversification of customer needs and will further expand our marketing power through the Internet and call centers. We will also strive to improve our consulting capabilities so that we will be able to provide our customers with optimal travel plans.

- The Group has put a support structure in place for arranged travel which includes not only the price appeal of the airline ticket, but also the ability to feel safe in the locale when traveling and intend to secure a lead position in the market by combining the unique value-added services offered by our group to appeal to customers.

- We will strive to offer of full range of high value-added products using luxury hotels and to improve our capabilities in arranging travel, in addition to introducing products with price appeal such as our core product, the package tour, Ciao for group travel tours. We will also work to respond to individual needs through product planning that clearly specifies the target customers.

- We plan to improve our product line-up for regions such as China that are projected to experience an increase in travelers as well as work to attract senior and affluent customers, segments for which growth is projected, for our Impresso escorted tour to Europe and other locales.

- The Group continues to see Internet business and group/corporate sales as important markets and intends to expand sales to these segments, where the most growth is expected. The Internet business is particularly important from the perspective of a channel for marketing and communication as well, so we will further improve this business. To be specific, we will work on improving the overall convenience of our home page by strengthening the online reservations site for airline tickets, hotels, and optional tours; developing a community through the use of a blog; and transmitting travel videos, among other things.

The H.I.S. Group intends to build a stable business base for the hotel business by working to ensure profitability through maintaining a high occupancy ratio for the two hotels in Australia currently in operation.
------------------------------------------------------------------------
 (millions of yen)
Forecast Fiscal Year ending October 31, 2007
------------------------------------------------------------------------

Net Sales 374,000 13.7%
Operating Income 8,250 14.0%
Ordinary Income 9,200 13.8%
Net Income 5,400 10.9%
Net Income/Share (y) 161.76

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4. Dividends

The intent of the Company's dividend policy is to enable the continuous, stable payment of dividends to shareholders. Company dividend policy includes a provision for the payment of an interim dividend. However, as there is a trend for the proportion of sales, etc. recorded in the second half of the year to be relatively higher, in order to reflect results in dividends fairly the Company is planning at present to make a dividend payment in respect of the full year of 20.00 yen per share.

Please access the full H.I.S. Consolidated and Non-sonsolidated financial reports at the Company IR website: http://www.his-j.com/company/ir_e_zaimu.htm

Source: JCN http://www.japancorp.net

Contact:
H.I.S. Co., Ltd.
Manabu Shimizu
Corporate Planning Division
Tel. +81-3-5908-6029
Fax +81-3-5908-2423
tp-shimizu@his-world.co.jp


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Date:Jun 22, 2007
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