H.I.S. Reports Results for the First Half; Net Income Up 13.1%

H.I.S. Reports Results for the First Half; Net Income Up 13.1% 
Tokyo, June 7, 2013 - (JCN 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, 2013. The H.I.S. Group recorded net sales of 224,633
million yen (up 11.6% from the previous fiscal year), operating income of 6,056
million yen (up 20.2%), ordinary income of 7,847 million yen (up 21.9%), and
net income of 4,681 million yen (up 13.1%). 
During the first half of the fiscal year under review, things are looking up.
The government policies have been well received, and measures such as
correcting the high value of the Yen and ending deflation have led to greater
confidence that the economy will recover. Foreign affairs issues and foreign
currency fluctuations still exert some influence on those traveling overseas,
but the travel industry remains strong, due to increases in individual consumer
spending, and a greater willingness to travel in the senior generation.
According to the Japan National Tourist Organization (JNTO), the (estimated)
number of Japanese departing Japan from November 2012 through April 2013 is
forecast to have fallen by 5.1% compared with the previous year to
approximately 8,550,000 people. 
In this economic climate, the Group will continue to improve on its standards
of "safety, security, service and quality," and has developed many
innovative solutions with the purpose of expanding its business in Japan and
overseas. 
- Travel Business
In the domestic travel industry, we have launched our first trials of the
luxury liner Costa Victoria, providing cruises for independent travelers, and a
great many customers have taken advantage of these cruises. This summer, we
plan to launch our "six ship continuous Costa cruise special
package." As part of our policy of new service, we are also supporting our
over 60s customers, not only by introducing discounts for senior citizens, but
also by providing special assistance at Narita and Haneda airports (the
"airport assistant"), and by opening a Visa Center and acting as
agents for all visa applications. 
As for sales channels, we plan to improve the effectiveness by concentrating
on points of sale. As well as our present emphasis on setting up sales branches
in shopping centers, we will also be strengthening our presence in specialist
outlets offering services such as foreign weddings. We have expanded our
branches so that we can serve more customers, part of which is the opening of
our new flagship branch at Shinjuku 3 Chome in Tokyo. 
As for initiatives in the area of online sales, we have improved our online
presence by setting up a "air ticket and hotel" site that our
customers can access by smartphone. Our reservation site "Sumayado"
covers over 5,000 hotels and ryokan, or Japanese-style inns. We are committed
to building this site to improve convenience for our customers. 
Our group travel activity is strong due to the increase in orders for large
scale group travel, such as corporate trips, events, and school trips. We have
also developed global contracts with businesses and other corporates to take
advantage of the corporate travel market, such as business trips. 
The market for domestic travel services that have been sold from all our
branches in Japan from the previous fiscal year, such as our original Shuttle
service in the main Okinawa Island and Ishigaki Island (the Yuntaku shuttle),
and our quick rent a car service, continues to get stronger. 
Turning to the business overseas, we are promoting the development of many
more branches in Bangkok, Thailand to consolidate our outbound foreign travel
activity. In order to target overseas customers, we set up an online booking
service in our sixth country Australia, and started a service in Hong Kong,
concentrating on expanding business to the favorable Asian region. Our inbound
travel operation to Japanese and overseas customers is also doing well. We are
acting as wholesalers to other travel businesses (BtoB business), so we can
offer our customers the services and activities of overseas branches, and
increase our sales activity. We have expanded our base in Europe, with a
presence in 49 countries, 106 cities and 145 branches as of the end of April
2013. In addition, we have expanded our overseas hotel reservation sites. We
have made direct arrangements with major hotel chains, which have allowed us to
establish a presence overseas and buy hotel rooms and optional tours. Our H.I.S
VACATION business then sell these as vacation packages directly to Japanese and
overseas travelers via the internet. These types of initiatives have helped
ensure that our overseas travel business remains strong. 
As a result of the initiatives described above, net sales for the first half
has increased 4.1% year on year to 200,707 million yen. However, in the current
climate of foreign affairs pushing down customer demand in Asia, the main
destination, and of sudden currency fluctuations, operating income was down
27.3% year on year to 3,641 million yen. 
- Hotel Business
The Guam Reef & Olive Spa Resort, which was added to our group in the
previous fiscal year, was refurbished in all Beach Towers and lobbies and the
surrounds. We planned to use the Watermark Hotel Nagasaki to improve visits to
Japan, concentrating on the Asian market, with improved success. As a result of
our efforts to improve customer satisfaction and profits in hotels in Australia
and Sapporo, Japan, our hotel business moved into the black. Net sales
increased 57.6% year on year to 2,121 million yen, and operating income was 25
million yen, compared with a loss of 33 million yen from the same period last
year. 
- Theme Park Business
HUIS TEN BOSCH Co. Ltd., the theme park business, started rebuilding
Alexanderplatz (now Amsterdam Square) in February, 2013. They planted 550
varieties of tulips, the most seen in Japan, for the March tulip festival, and
opened "The Maze," a 3 dimensional maze in March. HUIS TEN BOSCH also
produced "The Kingdom of Light Series," from November 2012 to March
2013, an extravaganza of 10 millions bulbs that only HUIS TEN BOSCH experience
could provide. The series scaled up from the No. 1 in the East to the
World's No.1., and contributed to an increase in the number of visitors.
As a result, the visitors number in the first half of the fiscal year increased
47.6% year on year to 1,292,000. Net sales increased 39.5% to 10,387 million
yen, and operating income increased 133.1% year on year to 2,793 million yen. 
- Transportation Business
On October 13, 2012, the Ocean Rose vessel suspended operation for a long term
period. As a result, net sales was down 18.7% year to year to 32 million yen,
and operating loss was 326 million yen, compared with a loss of 289 million yen
the same period previous year. The vessel has been chartered to a foreign
corporation in a 3 year bareboat chartering agreement, starting February,
2013. 
- Kyushu Sanko Group
KYUSHU INDUSTRIAL TRANSPORTATION Group, a holding company of KYUSHU INDUSTRIAL
TRANSPORTATION HOLDINGS CO., LTD., recorded net sales of 12,412 million yen and
operating income of 765 million yen, having synergies effect in the H.I.S.
Group. The H.I.S. Group had turned KYUSHU INDUSTRIAL TRANSPORTATION HOLDINGS
CO., LTD. into a consolidated subsidiary from the fourth quarter of the
previous fiscal year. 


Consolidated Financial Results for the First Half Ended April 30, 2013
 
Operating Results                                  (millions of yen)
---------------------------------------------------------------------
Ended April 30,                      2013      %        2012       %
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Net Sales                         224,633   11.6     201,289    14.4
Operating Income                    6,056   20.2       5,039    47.6
Ordinary Income                     7,847   21.9       6,438    48.2
Net Income                          4,681   13.1       4,138    (9.5)
Net Income/Share (y)             144.36             127.62
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Consolidated Financial Position
---------------------------------------------------------------------
As of April 30,                      2013         10/31/2012
---------------------------------------------------------------------
Total Assets                      182,170            173,497
Net Assets                         85,197             76,763
Shlders' Eqty Ratio (%)              41.1               39.0
Shlders' Eqty/share (y)        2,307.53           2,088.35
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Consolidated Cash Flows (CF)
---------------------------------------------------------------------
Ended April 30,                      2013               2012
---------------------------------------------------------------------
CF from Operating Activities        2,167               (822)
CF from Investing Activities           50            (12,337)
CF from Financing Activities       (2,874)            (1,087)
Cash and Cash Equiv / Period End   37,750             30,564
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Dividends                                                      (yen)
---------------------------------------------------------------------
Year Ended                  2013 (Forecast)             2012
---------------------------------------------------------------------
                                    34.00              34.00
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Forecast for the Full Year                         (millions of yen)
---------------------------------------------------------------------
Year Ending October 31,              2013                  %
---------------------------------------------------------------------
Net Sales                         490,000               13.6
Operating Income                   15,000               32.5
Ordinary Income                    17,000               26.1
Net Income                         10,000                7.2
Net Income/Share (y)               308.39
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Forecast for the Full Year 
The H.I.S. Group considers that the state of the world economy remains
unclear, but in the travel industry, there is reason for optimism, with the
increase in consumer spending and the activities of the senior generation. The
effect of the foreign affairs issues, which started last summer, began to
decline, and the Group predicts that this trend will continue. Together with
the increase in arrival and departure slots in the Tokyo region airports, this
should result in an increase in travel demand from this summer onward. On the
other hand, there could be more intense competition from a more diverse range
of competitors who deal with direct sales, including airline companies, so it
is important to keep a close eye on market trends. 
In this economic climate, the Group will strive to improve on its standards of
safety, security, service and quality in its main segment, the travel industry.
The group plans to develop unique services and to expand our Japanese and
overseas business, using our synergies to take advantage of new initiatives
such a newly established international charter airline, and the challenges of
the cruise industry. We will also take advantage of the unique features of our
various sales branches, including our online presence, to stimulate demand and
increase productivity and efficiency. 
HUIS TEN BOSCH Co. Ltd. not only runs popular events such as the "World
Pyrotechnics Competition" and the "Rose Festival" with its 1,000
varieties and 1 million individual blooms, but also has opened the movie house
"HTB Harbor Cinemas" and will launch the largest ever "The
Kingdom of Water and Adventure" this summer to the delight of its
visitors. 
For the reasons above, our projections for the full fiscal year have not been
changed from those announced on December 14, 2012. 
About H.I.S. Co., Ltd. 
H.I.S. Co., Ltd. was founded in 1980 and pioneered the Japanese discount
airline ticket industry. Today the H.I.S. Group is comprised of 91 subsidiaries
and 9 affiliated companies around the world, and has become a leader in the
Japanese travel industry. For more information, please visit
http://www.his.co.jp/english/ . 
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 
Copyright 2013 JCN Newswire. All rights reserved. www.japancorp.net 
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