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Japan – Pasona Q1 growth improves outlook

04 October 2013

Recruitment firm Pasona Group Inc. (2168: TYO) reported revenue of JPY 51.21 billion (USD 525.2 million) for the first quarter ending 31 August 2013, a slight fall from revenue of JPY 51.27 billion (USD 525.8 million) for the same period last year.

Despite the small drop in revenue, Pasona reported substantially increased operating and pre-tax profit figures during the first quarter. In Q1 2013, the company reported an operating profit of JPY 834 million (USD 8.6 million), a +149% increase from JPY 335 million (USD 3.4 million) a year ago. Pre-tax profit for the period rose by +142% to JPY 798 million (USD 8.2 million), up from JPY 330 million (USD 3.4 million) during Q1 2012.

Net profit for the period was JPY 103 million (USD 1.05 million), a significant improvement on a net loss of JPY 193 million (USD 5.06 million) for the same period last year.

As a results of its latest figures, Pasona has upgraded its forecasted results for the first half of the year, ending 30 November 2013.

Expected revenue for H1 2013 remains unchanged at JPY 108.5 billion (USD 1.1 billion). The company’s operating and pre-tax profits are predicted to surpass previous expectations. The operating profit for H1 2013 had been expected to reach JPY 730 million (USD 7.5 million) and is now forecast to reach JPY 880 million (USD 9 million), up +20.5%. Pre-tax profit had been expected to be JPY 620 million (USD 6.4 million) for the first half of the year, this has been revised upward to JPY 820 million (USD 8.4 million), an increase of +32.2%.

Net loss for the period had been predicted to be JPY 170 million (USD 1.7 million). Pasona still expects that the company will report a net loss for the period, however this has been improved to a net loss of JPY 110 million (USD 1.1 million).

The company’s full year forecast, for the period ending 31 May 2014, predicts that Pasona’s revenue will be JPY 222 billion (USD 2.3 billion). An improvement of +4.7% compared with reported revenue for the year ending 31 May 2013, of JPY 212 billion (USD 2.2 billion). 

Pasona expects that the company’s operating profit will be JPY 3.43 billion (USD 35.2 million), an improvement of +8.2% on last year’s operating profit of JPY 3.17 billion (USD 32.5 million). Net profit for the year is not expected to surpass that of last year. For the year 2012 net income had originally been forecast at JPY 350 million (USD 3.6 million) but the company reported net income for the period of JPY 600 million (USD 6.15 million). Net income for the year ending 31 May 2013 is predicted to reach JPY 480 million (USD 4.9 million).

In trading today, the company’s share price rose by +2.9% to JPY 81,300 (USD 833), an increase of +69% compared with a year ago. Based on its share price, the company has a current market value of JPY 33.89 billion (USD 347.5 million).

According to research by Staffing Industry Analysts, Pasona Group is the third largest staffing company in Japan

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