TOKYO -- Yamato Holdings sharply revised its April-June net profit downward on Friday after its subsidiary was found to have overcharged corporate clients for moving services.
The logistics company cut its first-quarter net profit to 2.64 billion yen ($23.6 million) from the roughly 4 billion yen it announced in late July. The new figure reflects impairment losses linked to moving services operated by Yamato Home Convenience, which had stopped taking all new orders as of August in light of the scandal.
A quarterly securities report, released Friday, projects 820 million yen in impairment losses for equipment and facilities across Japan, assuming that Yamato Home does not resume taking orders this fiscal year.
The suspension of moving services is expected to erode Yamato's annual operating profit by 6 billion yen, weighing down the company's financial position. Still, package delivery makes up far more of the group's business.
Yamato kept its full-year earnings guidance unchanged, projecting a 97% surge in net profit to 36 billion yen on a 5% increase in sales to 1.62 trillion yen.
It also stuck to its previous estimate that it overcharged clients by about 3.1 billion yen over the last five years.
Japanese companies tend to move offices toward the end of the fiscal year in March, so Yamato intends to resume operations once measures are in place to prevent a similar scandal.