To Our Stakeholders

To Our Stakeholders

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To Our Stakeholders

To Our Stakeholders

To Our Stakeholders

Aspiring to Become a Global General Energy Service Group
That Contributes to Sustainability
in Anticipation of the Arrival of a Post-Carbon Society

SINANEN HOLDINGS CO., LTD.
President and CEO
Masaki Yamazaki

Aspiring to Become a Global General Energy Service Group
That Contributes to Sustainability
in Anticipation of the Arrival of a Post-Carbon Society

I would like to take this opportunity to extend to you my deepest gratitude for your continued support.

Overview of business results (1Q FY2022)

SINANEN HOLDINGS Group launched its second three-year medium-term management plan under the slogan, "Challenging New Worlds with Big Sky-thinking" in the previous fiscal year. Under the 2nd Medium-Term Management Plan, we have a quantitative target of achieving an ROE of 6.0% or higher and three qualitative targets, namely improving capital efficiency, executing investments to realize sustainable growth, and reforming the thinking, habits, and behavior patterns of our employees. In the second year of the plan, the emphasis is on promoting investment in achieving sustainable growth, including anticipatory investments related to new businesses that will become the business foundation in the future (renewable energy business in and outside Japan, bike-sharing business, etc.) and IT-related investments for the promotion of DX (digital transformation). In this way, we are working to establish the foundation for making a further leap forward with the 3rd Medium-Term Management Plan. We also established the Group Coordination Promotion Office in April 2021 to demonstrate further synergy as a group and pursue profit growth and operational efficiency.

In the BtoC Business (Retail/Wholesale Energy & Related Business), the sales volume was down due to decreased demand in the mainstay area of LP gas and kerosene as average temperatures in early spring were higher than usual. On the other hand, unit selling prices were up owing to a sharp increase in the price of crude oil and propane contract prices. On the profit side, gross profit deteriorated for kerosene and electric power, but we worked on improving earnings by securing our profit margin on LP gas and working to reduce SG&A.

In the BtoB Business (Energy Solution Business), we maintained a similar sales volume compared to the previous year in our mainstay Petroleum Business, while unit selling prices went up substantially as in the BtoC Business owing primarily to the sharp increase in crude oil prices. On the profit side, while light oil sales were better than the forecast, overall, profit softened due to such factors as increased procurement costs for electric power and an increase in costs for sales promotions. As for the favorable sales of light oil, we continue to shift our existing petroleum sales facilities to Oil Square, which has the improved light oil shipping capacity. In the new micro wind turbine-related business, we are accumulating data from field tests we are conducting in Saitama City, Saitama. Also, in South Korea, we continue to await development permission for the large-scale wind power generation business we have participated in.

In the Non-energy/Global Business, bicycle business operator SINANEN BIKE Co., Ltd. saw lower sales as demand, which had increased the previous year due to the spread of COVID-19, dropped back down. Meanwhile, we worked to improve profitability by such means as promoting development of private brand bicycles.
Bike-sharing business operator SINANEN MOBILITY+ Co., Ltd. promoted development of DAICHARI locations, primarily in highly profitable target areas, such as where the partnership with KEIO REALTY & DEVELOPMENT. Field tests have been launched with new municipalities such as Fujimino City, Saitama, and as of June 30, 2021, there are more than 1,900 stations and more than 8,200 bicycles.
Environmental and recycling business operator SINANEN ECOWORK Co., Ltd. saw favorable results owing to a recovery in transaction volume from the fluctuation in demand caused by operational problems for some users and continued work on reducing costs. This was despite the continued decline in generation of construction waste due to the spread of COVID-19.
Antimicrobial business operator Sinanen Zeomic Co., Ltd. maintained favorable sales in Japan and overseas against a backdrop of increased demand for antimicrobial products due to the spread of COVID-19. The company also worked on cultivating new customers, including the launch of sample pre-production with a leading manufacturer.
Systems business operator Minos Co., Ltd. saw steady demand for its flagship LP gas backbone operation system. Power CIS, its customer information system supporting liberalization of electricity retail sales, also grew substantially and performed well.
Core building management and maintenance business operator Takara Building Maintenance Co., Ltd. saw favorable results overall owing to new orders for cleaning and disinfecting medical facilities and an increase in the number of maintenance contracts at housing complexes. This was despite the declaration of a state of emergency due to the spread of COVID-19, which resulted in a suspension of operations at management facilities similar to the year before.

As a result of the above, the financial results for the first three months of the fiscal year under review were as follows: Net sales came in at 49.359 billion yen (39.267 billion yen in the previous year), operating profit was 417 million yen (809 million yen in the previous year), ordinary profit was 578 million yen (700 million yen in the previous year), and profit attributable to owners of parent was 377 million yen (260 million yen in the previous year).

Outlook

No changes have been made to the figures from the forecasts announced on May 14, 2021.

The COVID-19 pandemic has not been resolved as of this point, leading to a continuing unclear situation. In the Group, the pandemic was a profit-decreasing factor in the commercial energy business of the BtoC Business (Retail/Wholesale Energy & Related Business), environmental and recycling business, and building management and maintenance business. However, overall, the impact was minor as it was a profit-increasing factor in the household energy and antimicrobial business of the BtoC Business (Retail/Wholesale Energy & Related Business).

As stated above, we do not expect COVID-19 to cause significant changes in our business results, but in the event that we determine it is necessary to revise our forecasts due to a resurgence of COVID-19 or significant changes in the business environment, we will disclose those revisions without delay.

Shareholder return

The Company considers returning profit to shareholders the most important management policy. Our basic policy is to provide stable dividends with a consolidated payout ratio of 30% or more. Further, we plan to allocate internal reserves to expanding our business domains and capital expenditures to strengthen our business foundation.We also plan to provide a dividend of 75 yen per share this fiscal year. We plan to provide a dividend of 75 yen per share for the following fiscal year as well.

Thank you in advance for your continued support as we put every effort into further improving corporate and shareholder value and achieving sustainable growth.

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SINANEN HOLDINGS CO., LTD.
President and CEO
Masaki Yamazaki