Nikkei earnings preview: Yamato’s profit sinks on weather woes, end of mailbox service

Nikkei earnings preview: Yamato's profit sinks on weather woes, end of mailbox service

TOKYO — Japanese delivery company Yamato Holdings‘ group operating profit apparently slid 6% year over year to around 20 billion yen ($165 million) in the six months ended Sept. 30, falling short of the 22 billion yen forecast.

     Shipments of cabbages, tomatoes and other vegetables slumped during the summer amid typhoons and localized downpours. Heavy rain caused flooding that blocked roads and kept freight from being collected as planned.

     Yamato was also forced to end its service delivering small packages to mailboxes at the end of March. The company apparently had trouble luring back retail and corporate customers who had switched to Japan Post’s new service.

     Yamato’s home delivery service is handling a growing number of packages thanks to the spread of online retail. But the company’s 4% increase in packages for the April-September half was less than its target of 8% for the year. A new service offering deliveries of smaller parcels from convenience stores and other retailers has struggled due to slow installation of specialized equipment and systems for corporate clients.

     Sales for the half likely edged up just 1% to around 680 billion yen, below Yamato’s estimate of 689 billion yen. Maritime shipping experienced delays after a fire on a car ferry off the coast of Hokkaido in late July, eating into earnings by forcing the company to incur additional costs to ship some freight by ground instead.

     Yamato’s full-year guidance calls for operating profit to rise 4% to 72 billion yen. The company expects earnings to rebound toward the end of the year, a busy period for its mainstay package-delivery service.

(Nikkei)

Nikkei earnings preview: Yamato's profit sinks on weather woes, end of mailbox service