April 5, 2014 3:53 am JST

Nippon Express' op profit likely rose 25% in fiscal 2013

TOKYO -- Nippon Express Co.'s group operating profit appears to have reached a little over 41 billion yen ($390 million) for the year ended Monday, up 25% and surpassing its forecast, largely on brisk demand for corporate logistics.

     The company had projected a 40 billion yen profit.  It was able to pass higher costs on to customers as well.

     Sales apparently came to 1.73 trillion yen, a 7% gain and 40 billion yen better than forecast.

     In its domestic trucking business, which accounts for two-fifths of total sales, revenue likely increased 2%. Cargo moved briskly for manufacturing materials for the automotive, electrical machinery and other industries. Sales in the warehouse business also grew thanks to the rise of Internet shopping.

     To pass on higher fuel and labor costs, as well as the expense of outsourcing some operations to accommodate a rush of demand before Tuesday's sales tax hike, the company raised prices for some customers. Combined with streamlining efforts, this helped boost the operating margins in the trucking business to just over 2%.

     Marine shipping operations saw a roughly 5% sales gain. The air cargo segment also rose slightly on brisk demand for transporting autoparts to North America.

     Overseas sales jumped more than 30% on the tailwind provided by the weaker yen. Shipments of autoparts between the U.S. and Mexico fared well.

     In the year through March 2015, full-year cargo movements will likely remain steady, although a temporary dip is expected in the letdown following the sales tax hike. The logistics subsidiary that Nippon Express acquired from Panasonic in January will likely contribute to sales growth as well.