ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Japan-Update

Yamato Holdings fails to deliver on earnings

Logistics giant misses estimate as back pay, outsourcing take toll

High package delivery demand has put a strain on workers and eroded Yamato's profit.

TOKYO -- Yamato Holdings is expected to report that operating profit fell by half to just over 30 billion yen ($274 million) in the year ended in March due to back overtime payments for truck drivers and the high cost of outsourcing package delivery.

The figure falls short of the company's forecast of 58 billion yen and marks the second straight annual profit decline for the parent of package delivery leader Yamato Transport.

Sales look to have risen 3% to about 1.46 trillion yen, in line with the estimate. Yamato's parcel handling volume increased nearly 10% amid the popularity of online shopping.

Yet costs weighed as Yamato offered back wages for overtime worked by in-house truck drivers. The company conducted a survey of front-line work conditions and discovered that more than 70,000 drivers, or roughly 40% of those groupwide, had put in unpaid overtime regularly in the past two years. The company set aside some 20 billion yen to compensate that work in a lump sum.

And costs for outsourcing delivery work that could not be handled in-house came in higher than expected. Net profit fell, though the company avoided slipping into the red.

In the current fiscal year that kicked off this month, operating profit is expected to grow in the absence of back payments. But outsourcing costs will likely continue weighing on earnings. Price hikes and other steps are not seen making a substantial contribution to profit until next fiscal year at the earliest.

(Nikkei)

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media