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Meitec Corporation has published its Q2 Financial performance for its year ending March 2012

Meitec Corporation of Japan has published its Q2 Financial performance for its year ending March 2012.

Net sales were up 8.8% to Y32,000,000,000 (&pound254,980,554.45) and net income was down 19.8% to Y1,295,000,000 (&pound10,315,617.23)

During the consolidated six months (from April 1, 2011 to September 30, 2011), the Great East Japan Earthquake caused power shortages, disrupted supply chains and other negative factors, and impacted domestic production activities among leading manufacturers, which are the major customers of the Company. Nonetheless, investments in technological development, which had resumed after the Lehman Shock, continued on the whole. However, rapid yen appreciation and other factors led to increasing cost reductions among these customers.

Under these circumstances, the Group’s core business—temporary engineer staffing—maintained a high utilization ratio, which had improved during the previous fiscal year, leading to a significant year-on-year gain in operating results. Primarily for this reason, consolidated net sales for the period under review increased &yen2,580 million compared with the same period in the previous fiscal year to &yen31,937 million. The consolidated cost of sales advanced &yen424 million to &yen24,052 million, chiefly due to increased labor costs.

Selling, general and administrative expenses went up &yen490 million to &yen5,556 million mainly because of a rise in strategic investments. As a result, consolidated operating income rose &yen1,665 million to &yen2,328 million.

Consolidated ordinary income increased &yen262 million to &yen2,350 million compared with a year earlier although non-operating income declined &yen1,402 million due to a decrease in subsidies for the temporary staffing business as a result of the expiry of employment adjustment subsidies.

Consolidated net income for the period under review decreased &yen319 million to &yen1,295 million, reflecting a year-on-year decline in extraordinary income and a climb in tax expenses.

Operating Results by Business Segment

1)-2. i Temporary Staffing

The Temporary Staffing Business accounts for more than 90% of consolidated net sales. Within the temporary engineer staffing, the core business of this segment, the Company’s non-consolidated working hours declined from 8.81 hours/day a year earlier to 8.72 hours/day, owing to restrictions on overtime work and a change in days off as a part of power saving efforts. However, the Company achieved a significant improvement in the non-consolidated average utilization ratio from 80.7% a year earlier to 90.9% in the period under review, as many customers continued investments in technological development, and, therefore, the Company was able to continue to land new contracts from the previous quarter. Mainly for this reason, consolidated net sales in the Temporary Staffing Business segment for the period under review increased &yen2,633 million from a year earlier to &yen30,418 million.

The rise in net sales raised operating income by &yen1,689 million to &yen2,214 million.

1)-2. ii Engineering Solutions

In the Engineering Solutions Business, the Company provides engineering services related to analytical technologies, prototype production, casting/metal mold production and technology support for printed-circuit boards.

Consolidated net sales in the Engineering Solutions Business segment for the period under review fell &yen84 million from a year earlier to &yen1,460 million, and operating income declined &yen48 million to &yen64 million.

Meitec CAE maintained profitability despite a decrease in income due to a reduced number of orders received as a result of the impact of the Great East Japan Earthquake. Apollo Giken Group secured operating income (profitability) despite a decrease in orders and provision for bad debt expenses.

1)-2. iii Global

In the Global Business segment, the Company engages in vocational training and job placement in China.

In vocational training, efforts were made to optimize the size of staff and facilities for human resource development. As a result, the Global Business segment’s consolidated net sales for the period under review decreased &yen33 million to &yen9 million and an operating loss of &yen34 million was posted, a loss &yen4 million larger than a year earlier.

1)-2. iv Recruiting & Placement

The Recruiting & Placement Business segment involves the job placement and an information portal site business intended for engineers.

Consolidated net sales of the Recruiting & Placement Business segment advanced &yen66 million from a year earlier to &yen286 million, and operating income grew &yen28 million to &yen81 million.

Meitec Next Corporation achieved revenue and profit growth due to a higher number of job openings.

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