Japan – Persol revenue up 5.2% but EBITDA down 5.4%

Japanese staffing giant Persol (2181: JP)  reported revenue today for the nine months ended 31 December 2019 of JPY 721.16 billion (USD 6.56 billion), an increase of 5.2% when compared to the previous period.

(JPY millions) 9 months 2019 9 months 2018 Change 9 months 2019 (USD millions)
Revenue 721,160 685,231 5.2% 6,566.8
Gross Profit 159,785 151,252 % 1,455.0
Gross Margin 22.1% 22.0%
EBITDA 41,358 43,730 -5.4% 376.6
Operating Income 28,403 32,074 -11.4% 258.6
Net Income -654 18,738 72.3% -5.9

The group reported increased sales within its Temporary Staffing/BPO segment and its PersolKelly segment which provides HR services; mainly staffing, in the Asia-Pacific region.

Operating profit was down primarily due to deteriorated profitability in the group’s overseas operations. The Programmed segment (that operates staffing and maintenance businesses in Australia) saw profit decrease due to declining profitability in its staffing business which was influenced by the stagnated local economy and the weakening of the Australian dollar. The PersolKelly segment’s profitability was also hit.

The group reported a net loss during the period because extraordinary losses were recorded such as impairment losses on goodwill of Programmed’s staffing business in Q2, and business restructuring costs related to the termination of a business in the nine months ended 31 December 2019.

Revenue by segment

(JPY millions) 9 months 2019 9 months 2018 Change 9 months 2019 (USD millions)
Temporary Staffing/BPO 407,580 378,435 7.7% 3,711.8
Recruiting 63,923 62,249 2.7% 582.1
Programmed 140,194 151,331 -7.4% 1,276.7
PersolKelly 62,642 55,495 12.9% 570.4
ITO 29,698 23,869 24.4% 270.4
Engineering 21,187 21,371 -0.9% 192.9

In November 2019, the company forecasted revenue of JPY 980 billion (USD 8.92 billion) for the year ended March 2020.

The group said financial results for the nine months ended 31 December 2019 were almost in line with the company’s plan. Therefore, there is no change in earnings forecasts for fiscal 2019 that was announced in November 2019.

In trading today, Persol Holdings shares closed at JPY 2,125.00 (USD 19.35), down 0.51% on the day and 20.88% above the 52 week low of JPY 1,758.00 (USD 16.01) set on 28 March 2019. Based on its current share price the company has a market value of JPY 505.60 billion (USD 4.60 billion).

Source: Staffing Industry Analysis | Visit: Japan – Persol revenue up 5.2% but EBITDA down 5.4%

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