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Japan – Meitec’s Q1 revenue and operating profits rise

31 July 2013

Japanese engineering staffing firm Meitec Corporation (9744: TO) reported revenue of JPY 17.51 billion (USD 178.5 million) for the three months ending June 2013, a +4.8% increase compared with the same period last year.

Operating profit rose +3.1%; from JPY 1.34 billion (USD 13.7 million) in Q1 2012 to JPY 1.39 billion (USD 14.2 million) in Q1 2013. Net profit declined during the period, falling by -2.6% from JPY 763 million (USD 7.8 million) in Q1 2012 to JPY 743 million (USD 7.6 million) in Q1 2013.        

The moderate recovery of the Japanese economy, partly as a result of the economic measures and financial policies implemented by the government, saw many leading manufacturers continuing to invest in technological development.

Meitec’s Temporary Staffing Business segment reported revenue of JPY 16.8 billion (USD 171 million), an increase of +4.5% compared with a year ago. Operating income for this business segment increased by +3.3% to JPY 1.35 billion (USD 13.8 million). The Temporary Staffing Business is responsible for over 90% of Meitec’s total net sales and provides temporary engineering staff.

Falling orders for the Engineering Solutions Business segment resulted in a revenue drop of -6.9% to JPY 539 million (USD 5.5 million). An operating loss of JPY 25 million (USD 254,855) was reported for Q1 2013, compared with a loss of JPY 1 million (USD 10,194) for the same period last year. The Engineering Solutions Business provides engineering services related to analytical technologies, prototype productions, casting/metal mould production, and technology support for printed-circuit boards.  

The Global Business segment reported new sales growth of JPY 4 million (USD 40,777), an increase of +40.6% compared with a year ago. An operating loss was reported of JPY 18 million (USD 183,496), higher than the loss of JPY 13 million (USD 132,525) last year. The Global Business segment engages in job placement and vocational training for students to supply human resources for Japanese manufacturers operating in the coastal areas of China.

The Recruiting & Placement Business segment reported increased revenue, up +35% to JPY 223 million (USD 2.3 million). Operating profit increased by +52.6%, to JPY 78 million (USD 795,148) for Q1 2013. 

Looking forward, the consolidated forecast for the six months ending 30 September 2013 predicts revenue of JPY 35.5 billion (USD 361.9 million), an increase of +4% compared with the six months ending 30 September 2012. Operating profit for the period, however, is expected to fall by -10.1% to JPY 2.6 billion (USD 26.5 million). 

The full year consolidated forecast, ending 31 March 2014, predicts revenue of JPY 73.5 billion (USD 749.3 million), up +4.5% on last year, and operating profit of JPY 6.4 billion (USD 65.2 million), up +0.7% compared with last year.

Trading today, Meitec Corp’s share price opened +0.11% to JPY 2,951 (USD 30.08), an increase of +64.52 compared with a year ago. Based on its current share price, the company has a market value of JPY 88.04 billion (USD 897.5 million)

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