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Japan-Update

Japan's Park24 quarterly profit slumps on acquisition costs

Mainstay parking, car-sharing businesses remain strong

Park24 began field testing roadside car-sharing in central Tokyo at the end of last year.

TOKYO -- Park24's pretax profit appears to have declined nearly 10% on the year to around 4.5 billion yen ($39.9 million) for the quarter ended Jan. 31 due to outlays for acquisitions and other investments.

The result would mark the Japanese company's first profit decline in eight quarters. Sales apparently rose 7% on the year to a little over 50 billion yen, with core businesses faring well.

In January, Park24 paid about 18 billion yen to buy parking lot operations in five countries, including Australia and Singapore, from Australian company Secure Parking. Park24 booked costs of processing the deal at the same time.

In addition, upfront investments in new businesses -- totaling 700 million yen to 800 million yen -- put a squeeze on profit. Park24 invested in the business of making parking spaces belonging to individuals and businesses available to customers. And at the end of 2016, the company started a car-sharing experiment on roads in Tokyo. Users can pick up super-compact vehicles on the street and drop the car off near their destination.

Core operations are faring well. Car-sharing locations increased more than 1,200 in a year to about 8,800 as of the end of January. The company added many small sites in central Tokyo that operate with just one to three vehicles. Outlays for car-sharing services were relatively limited because the business requires no service counters or staffers. Membership grew roughly 30% to 750,000.

The parking lot business performed briskly, too, with locations increasing 5% in a year to 17,300. Operating rates edged up on the year to 45.4%. With many redevelopment projects underway in central Tokyo, occupancy by construction vehicles increased.

For the full year ending in October, the company is likely to keep its forecast unchanged, projecting pretax profit to rise 13% to 24 billion yen -- a second straight record year -- with sales climbing 19% to 232 billion yen.

(Nikkei)

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