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Japan courier Yamato turns profit on stay-at-home demand

Redeliveries decline, but B2B operations squeezed by pandemic fallout

Yamato Holdings, Japan's largest parcel delivery service, has seen earnings swing back to positive territory. (Photo by Wataru Ito) 

TOKYO -- Yamato Holdings, Japan's leading package deliverer, is set to report a group operating profit of roughly 8 billion yen ($74.7 million) for the first quarter through June, reversing the loss suffered a year earlier.

The rebound for Yamato Transport's parent is mainly credited to a resurgence of online orders from consumers cooped up at home amid the novel coronavirus outbreak. And more people were home to receive packages, which cut down on costly redeliveries.

Sales for the April-June quarter apparently gained 5% on the year to around 400 billion yen. The package volume for home deliveries jumped 17% during the quarter to roughly 490 million pieces. Food and sanitary products are among goods that saw in increase in online orders.

The rate of successful delivery attempts has improved, reducing time and resources spent on redeliveries. Apart from the wider availability of recipients, a growing number of customers opted for no-contact deliveries, allowing couriers to leave packages on doorsteps.

Yamato is also making use of data to predict customer demand, which supports an existing arrangement in which contract employees handle package deliveries in the evening along with full-time workers.

In the past, Yamato would hire outside contractors whenever the package volume climbed. This approach contributed to the 6.1 billion yen operating loss reported a year earlier.

Thanks to the current arrangement, Yamato saved money on outside contractors. The company used the windfall in May to give about 7 billion yen in bonuses to employees in recognition of the extra volume of work.

However, the quarterly operating profit seems to have missed the 10.8 billion yen forecast in a QUICK Consensus survey of analysts. Although home deliveries are healthy, the package volumes in the business-to-business segment have slumped.

The shutdown of economic activity dented Yamato's international logistics business in particular. A moving service reestablished last year that targets unmarried customers has failed to grow demand.

Yamato has not disclosed a guidance for the full-year earnings through March 2021. The company will report the quarterly numbers Friday next week.

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