PARK24 : First Quarter Financial Results Briefing Meeting (Transcript) （6,310KB）

I am Takao Miki of PARK24.

Thank you very much for attending today's PARK24 results briefing for the first quarter of the fiscal year ending October 31, 2024.

I will now explain the financial results for the first quarter ended January 31, 2024.

I will start by going over the consolidated results for the first quarter of FY2024.

Overall, we started the new fiscal year with highly favorable results.

As shown in [Table-1], net sales were 86.7 billion yen. Operating profit was 8.6 billion yen. Recurring profit was 7.9 billion yen, and profit attributable to owners of parent was 5.0 billion yen. They exceeded both the previous year and the Q1 plan. Service operations had a good start to the year.

In FY2023, we achieved record-high profit while we restarted paying the full amount of rent to parking facility owners who supported us during the COVID-19 pandemic, looking to see how much progress could be achieved in the recovery of our results. We believe that the key point in FY2024 is the achievement of sustainable growth in the post-COVID-19 era.

We think that the Q1 results were quite steady in light of these circumstances.

The next slide shows results by business segment. [Table-2] on the left shows net sales.

Consolidated net sales were 86.7 billion yen. Net sales in the Parking Business Japan segment stood at

42.3 billion yen. Net sales in the Mobility Business segment came to 25.3 billion yen. Net sales in the Parking Business International segment were 19.2 billion yen. The net sales of all of the segments exceeded the plan.

[Table-3] on the right shows recurring profit and business profit (loss). Consolidated recurring profit was 7.9 billion yen. Business profit was 8.4 billion yen in the Parking Business Japan segment, 4.6 billion yen in Mobility Business, and 0.1 billion yen in Parking Business International. In the Other segment (adjustment, head office expenses, etc.) a business loss of 5.2 billion yen was recorded.

In the Parking Business Japan segment, both net sales and business profit exceeded the plan. This is a good start. In the Parking Business International segment, net sales reached the plan but business profit did not.

The year-on-year change in the Other segment (adjustment, head office expenses, etc.) is rather large due to recording of foreign exchange losses of 3.3 billion yen in the previous fiscal year.

Next, I will explain the details of each segment.

I will start with Parking Business Japan.

The overall results are as stated in the headline. Service operations remained strong. In addition, we maintained a leaner business structure through the continuation of selective development. As I mentioned at the beginning, in FY2023 we completed the resumption of the payment of the full amount of rent to parking facility owners who supported us during the COVID-19 pandemic. The increase in personnel expenses and increased prices also impacted us. I think we achieved steady results despite these circumstances.

As shown in [Chart-2] on the left, compared to net sales of 42.3 billion yen, business profit was 8.4 billion yen in the Parking Business Japan segment. As the table below the chart shows, the business profit ratio was 20.0% in the Q1 under review, on par with the previous year.

[Chart-3] on the right is about newly developed Times PARKING facilities. The number of facilities in Q1 was 269, falling slightly short of the plan. Regarding this, we are working hard now to surely catch up in Q2 and beyond.

We have set the continuation of selective development as a theme for FY2024. Before the COVID-19 pandemic, there was a year when we developed more than 2,000 facilities. If we try to increase the number of facilities we develop, there may be a delay in the initial rise in sales and facilities which are in the red and do not contribute to profit in the initial fiscal year. In FY2024, we will continue the selective development we cultivated during the COVID-19 pandemic. We have set the ambitious target of increasing the number of facilities with an early initial rise in sales that can begin contributing to profit in their initial fiscal year. We will continue striving to achieve our plan.

I will move on to explain the Mobility Business.

Overall, net sales and business profit grew for the Mobility Business as a whole, with services operating very steadily despite a year-on-year decline in profit from the sales and disposal of vehicles.

We expected sales and disposal of vehicles to decline significantly when we announced the initial plan. In the Q1 under review, profit itself decreased year on year but exceeded the plan. In Q1 of the previous fiscal year, the supply of new cars was extremely small due in part to the semiconductor issue, and the used car market was overheated. This resulted in an extremely high profit from sales and disposal of vehicles in Q1 of FY2023.

The number of vehicles sold also decreased year on year. We procure vehicles for Times CAR in a four-year cycle. Four years ago, we began to decrease the number of vehicles we procure in response to the outbreak of COVID-19. Accordingly, the number of vehicles sold is planned to decrease this fiscal year.

On the other hand, service operations were extremely strong. Business profit was 142.3% compared to the previous year. We have been airing TV commercials and implementing promotional activities in train stations and on trains. We have continued to implement these initiatives since FY2023. We feel that these activities have increased the service's visibility and begun to actualize potential demand. In response, we will tap into the demand by increasing the number of cars and developing Times CAR rental sites to achieve results.

As shown in the line graph in [Chart-4] on the right, the number of members of Times CAR has been increasing at an accelerated rate. The number of Times CAR vehicles increased 1,674 from the end of the previous fiscal year.

I will explain details of the usage fees per vehicle/month (excluding FC) of Times CAR.

[Chart-5] on the left shows changes in usage fees per vehicle/month. In Q1 under review, this was 119,000 yen, up 4.7% year on year. To break this down, for corporate use it was 37,700 yen (up 1.7% year on year) and for individual use it was 81,200 yen (up 6.2% year on year).

Overall growth in corporate use seems to have slowed down because we reduced the loaner vehicles. However, to break down monthly usage fees into fees for car sharing and rental cars, car sharing increased 8.2% year on year while rental cars declined 13.7% year on year. Thus, corporate use of car sharing increased as planned. Note that the vehicles that were operating as loaner vehicles are now being allocated as car sharing vehicles.

[Chart-6] on the right shows a breakdown of monthly usage fees per vehicle into changes in unit price per use and number of uses per vehicle per month. Number of uses increased 0.1 year on year, to 27.4. Unit price per use rose 178 yen, to 4,329 yen. In Times CAR, the maximum usage fee of the basic model for six hours is 4,290 yen. Accordingly, they are used 27.4 times per month, with a duration of use of around six hours.

The next slide describes the situation of Parking Business International. To give an overview, performance in Australia was poor while in other areas it was almost as planned.

As shown in [Table-5] on the left, net sales of the business as a whole stood at 19.2 billion yen. To break this down, net sales were 10.5 billion yen in the UK, 5.3 billion yen in Australia and 3.3 billion yen in the three Asian areas of Taiwan, Singapore and Malaysia. Business profit overall was 0.1 billion yen. A business loss of 0.2 billion yen was posted in the UK. In Australia it was nearly 0.0. In the three Asian areas of Taiwan, Singapore and Malaysia, it was 0.4 billion yen, and a loss of 0.1 billion yen was recorded in other areas (local holdings company, etc.). In Australia, business profit fell short of the plan. We regard this as an issue to be addressed in and after Q2.

[Table-6] on the right shows the numbers of Localized Times PARKING facilities that we operate, which is our focus in our international business. They are 409 in the UK, 116 in Australia, 804 in Taiwan and 68 in Singapore and Malaysia. The number of developed facilities falls slightly short of the plan. In Q2 and beyond, we will strive to keep up with the plan.

Next, I will focus on the UK and Australia and explain the results on a local currency basis.

In the UK, both net sales and business profit were almost in line with the plan. Operations at properties such as airports were very steady due to a recovery in demand related to travel and business travel. On the other hand, results for properties in urban areas, including properties attached to commercial facilities and properties in office districts, fell slightly short of the plan. There was a delay in the plan for developing Times PARKING. Therefore, we would like to accelerate our efforts in and after Q2.

In Australia, both net sales and business profit fell short of the plan. Operations remained weaker than expected in urban areas. At present, we are advancing pump-priming measures, such as revising fees and streamlining the fee system in consideration of the increased prices and the services' appeal to customers, as well as proactively cancelling contracts for unprofitable parking facilities.

In both the UK and Australia, work from home has taken root following the COVID-19 pandemic. Many people work from home on Monday and Friday, and the recovery of operations on weekdays has been milder than we anticipated. Amid these circumstances, costs have been rising over the last two years due to inflation because the rent for some parking facilities is linked to the price index.

In the face of this structural problem, we will increase sales by taking operational measures on a facility-by-facility basis in the short term. In the medium term, we will transform our business portfolio from properties under long-term sublease contract to Localized Times PARKING facilities, which are short-term contract parking facilities (small, dispersed and dominant).