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Sales up almost 18% in Q1 2018 for Persol

Persol has released its results for the first quarter of 2018.


Announcing sales of JPY 161,897m up almost 18%, President and CEO, Masamichi Mizuta said profits were down 12.6% at JPY 5,425.


Explanation regarding business performance: The direction of Japan's economy continued to be unclear during the consolidated cumulative 1st quarter due to changes in political conditions overseas and financial policy trends. Under these circumstances, there was transition to moderate economic recovery due to the government's economic and financial policies etc. which lead to an improvement in corporate earnings.


The employment situation: In June 2017 the average ratio of job offers to job seekers (seasonally adjusted) was 1.51 times which is the highest level recorded in past 43 years. In addition, the overall unemployment rate in May stood at 2.8%. The underlying backdrop to this type of market environment is a shortage of workers combined with a lot of demand. The HR services related market overall shifted to an expansionary trend. PHD Group also experienced a transition into a bullish market emanating from overall client demand, and as a result, performance steadily improved. The core temporary staffing segment business in particular shifted to high levels of temp worker deployments and also, in the placement business there was a major increase in the number of successfully placed candidates.


Sales during this consolidated cumulative 1st quarter were JPY 161,897m (up 17.8% year-on-year (YoY)), operating profit was JPY 9,114m (down 1.5% YoY), ordinary profit was JPY 9,471m (down 0.0% YoY), and quarterly net profit attributable to parent company shareholders was JPY 5,425m (down 12.6% YoY). Business results by segment (before inter-segment/company write-offs) are as follows. From 1st April 2017, it shifted to a five segment system. The company used revised figures which reflect this change to calculate year-on-year growth rate.


In the temporary staffing/BPO segment, sales amounted to JPY 117,397m (up 10.4% year-on-year (YoY)), and operating profit was JPY 5,927m (up 15.3% YoY). In the consolidated cumulative 1st quarter, employment related indicators continued to hover around the high levels of the previous consolidated fiscal year with demand remaining robust which lead to chronic labour shortages.


In the Recruiting Segment, sales amounted to JPY 18,238m (up 12.7% year-on-year (YoY)), and operating profit was JPY 3,058m (up 4.3% YoY). In the consolidated cumulative 1st quarter, sales grew significantly as a result of deployment of additional headcount resources to bolster the sales structures in the domestic Japan recruitment business. Operating profit was impacted by increased costs (labor costs etc.) that accompanied the expansion of operations however, there was also an expansion of sales: operating profit was JPY 3,058m.


In the overseas segment, sales amounted to JPY 15,581m (up 319.9% year-on-year (YoY)), and operating loss was JPY -261m (Previous consolidated cumulative 1st quarter (from 1st April 2016 to 30th June 2016): JPY -247m). In the consolidated cumulative 1st quarter, sales grew significantly as there was an expansion of operations accompanying the expansion in the scope of the joint venture with Kelly Services, Inc. On the profit side, operating profit was impacted by increased costs (labour costs etc.) together with the expansion of operations, and continuous investment in personnel and system for the future growth: operating loss was JPY -261m.


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