Nippon Express Co. - Company Strategy & Performance Analysis
Nippon Express offers logistics services. The company is active in the areas of security and transportation, heavy haulage, and construction and logistics support.
Although, geographically the firms has presence in 42 countries, Japan is the territory from which it generates most of its revenues. As the firm already has an established presence in North and South America and Europe, it is expanding into the developing economies of East and South Asia.
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Low volume of freight transactions led to a revenue decline in local currency terms
In Japan, Nippon Express offers railway forwarding, motor cargo transportation, warehousing, air freight forwarding, and marine and harbor transportation solutions. Revenue generated in this territory increased at 11.0% from US$9.5bn in 2015 to US$10.5bn in 2016. However, in local currency terms, revenue declined at 0.2% due to the weak volume of freight transactions in the motor and marine and harbor transportation divisions.
Increase in logistics transactions caused revenue to rise
Revenue from the logistics support division increased at 7.2% from US$2.7bn in 2015 to US$2.9bn in 2016. However, in local currency terms, it declined at 3.6%. A decrease in the unit selling prices of oil led revenue to decline.The company recorded an increase in revenue and operating margin during the second quarter of FY2017. The total revenue generated by the security and transport division posted an increase of 13.2%, from US$444.2m in 2015 to US$502.9m in 2016. In local currency terms, revenue increased at rate of 1.8% due to strong volume witnessed in logistics transactions.
The company witnessed increase in revenue and operating margins in the second quarter of FY2017
Nippon Express recorded an increase in revenue, from US$4.2bn in Q2 FY2016 to US$4.7bn in Q2 FY2017 due to an increase in scale as a result of the worldwide expansion of units. Nippon Express (China) Co., Ltd and Nippon Express (Europe) Co., Ltd expanded their China-Europe cross-border rail transport services, while Nippon Express USA, Inc. opened a new facility in Laredo, Texas. The firm’s operating margins increased from 3.3% in Q2 2016 to 3.5% in Q2 2017.
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