Good Results From Meitec Corporation of Japan
Good Results From Meitec Corporation of Japan
1. Economy Overview
During the fiscal year ended March 31, 2013 (from April 1, 2012, to March 31, 2013), expectations increased for a recovery of the Japanese economy. The Japanese economy remained highly uncertain until the third quarter due to European financial problems, the deceleration of the Chinese economy, persistent yen appreciation and other factors. However, during the fourth quarter, the excessively high yen appreciation was corrected and stock prices rose, partly because of the effect of economic measures implemented by the new government administration and rising expectations of an end to deflation.
(1)-2. Overview of Consolidated Operating Results
During the fiscal year under review, many leading manufacturers, which are the major customers of the Company, steadily continued investments in technological development looking to the next generation despite the near-term economic uncertainty. Under such circumstances, we continued to improve the utilization ratio via aggressive recruiting activities to increase the number of engineers and reinforcing sales activities.
Primarily for this reason, consolidated net sales increased ¥3,375 million, or 5.0%, from the previous year to ¥70,330 million. Consolidated cost of sales advanced ¥1,763 million, or 3.5%, from a year earlier to ¥51,639 million, chiefly because of increased labor costs due to an increase in the number of engineers. Consolidated selling, general and administrative expenses rose ¥707 million, or 6.1%, to ¥12,337 million, primarily due to increased strategic investments. As a result, consolidated operating income jumped ¥903 million, or 16.6%, from a year earlier to ¥6,354 million. Consolidated ordinary income increased ¥895 million, or 16.2%, from a year earlier to ¥6,427 million. Consolidated net income for the fiscal year under review increased ¥3,165 million, or 112.0%, from a year earlier to ¥5,993 million due to a temporary decline in tax expenses mainly associated with the dissolution of a subsidiary.
(1)-3. Overview of Results by Business Segment
(1)-3.i Temporary Staffing Business
The Temporary Staffing Business accounts for more than 90% of consolidated net sales. Particularly in temporary engineer staffing, the core business of this segment, we were able to increase the number of engineers through aggressive and ongoing recruiting activities. We also steadily secured orders received and landed new contracts by reinforcing sales activities, resulting in the Company’s non-consolidated average utilization ratio (overall) of 95.4% (compared with 93.2% a year earlier). Also, working hours were steady at 8.88 hours/day (8.83 hours/day for the previous year).
Mainly for this reason, net sales in the Temporary Staffing Business for the fiscal year under review increased ¥3,454 million, or 5.4%, from a year earlier to ¥67,281 million, and operating income raised ¥918 million, or 17.6%, to ¥6,144 million.
(1)-3.ii Engineering Solutions Business
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.
Net sales in the Engineering Solutions Business for the fiscal year under review decreased ¥344 million, or 11.5%, from a year earlier to ¥2,660 million. Operating income decreased ¥54 million, or 38.2%, from a year earlier to ¥87 million.
Meitec CAE had a year-over-year decrease in net sales due to a reduced number of orders but achieved increased profits through cost reduction. The Apollo Giken Group recorded an operating loss, reflecting a decrease in orders from some of its customers.
(1)-3.iii Global Business
The Global Business engages in job placement and vocational training for students to supply human resources for Japanese manufacturers that operate in the coastal areas of China.
Net sales in the Global Business for the fiscal year under review increased ¥41 million, or 148.9%, from a year earlier to ¥69 million, and an operating loss of ¥59 million was posted compared with a loss of ¥70 million a year earlier.
(1)- 3.iv Recruiting & Placement Business
The Recruiting & Placement Business involves the job placement and an information portal site business intended for engineers. Net sales in the Recruiting & Placement Business advanced ¥140 million, or 23.4%, from a year earlier to ¥739 million, and operating income increased ¥27 million, or 18.8%, to ¥176 million.
Meitec Next achieved sales and profit growth due to a higher number of job openings.