Xyec’s FY2015 earnings jump five-fold to JPY191.4 million

• Revenue up 12.2% to JPY 8,480.4 million
• All three business segments – Engineering Services, IT Services and IT Solutions – delivered good performances in FY2015
• Maintained a healthy cash position of JPY 2,371.4 million as at the end of FY2015

Xyec Holdings Co., Ltd. (“Xyec” or the “Company”, and together with its subsidiaries, the “Group”), an established integrated engineering and IT services provider for major manufacturing industries in Japan, today reported a 429.5% surge in net profit attributable to equity holders of the parent to JPY 191.4 million (S$2.3 million) for the 12 months ended 31 March 2015 (“FY2015”) compared to JPY 36.2 million (S$0.5 million) of the preceding financial year (“FY2014”).

This was achieved on the back of 12.2% increase in the Group’s revenue to JPY 8,480.4 million (S$99.8 million) from JPY 7,558.6 million (S$95.0 million) in FY2014, underpinned by stronger revenue contribution from the Engineering Services segment.

Accounting for 49.7% of the Group’s total revenue in FY2015, the Engineering Services business segment achieved a 22.4% increase in revenue to JPY 4,216.7 million (S$49.6 million) in FY2015 from JPY 3,444.4 million (S$43.3 million) in FY2014. This was mainly due to the recovery in the automobile industry which led to higher demand for engineering services, as well as a full year’s contribution from the Company’s 95% owned subsidiary, Techno Like Us Co., Ltd., compared to only five months of revenue contribution in FY2014. Techno Like Us Co., Ltd. was acquired by the Company in November 2013.

Revenue recorded in FY2015 by the Group’s two other business segments, IT Services and IT Solutions, rose 3.0% and 5.8% to JPY 3,252.6 million (S$38.3 million) and JPY 1,011.1 million (S$11.9 million) respectively. The increase in revenue from the IT Solutions business segment was mainly attributable to higher contribution from the Company’s wholly-owned subsidiary, NT Solutions Co., Ltd.

The Group’s gross profit in FY2015 increased 11.4% to JPY 1,786.2 million (S$21.0 million), while the gross profit margin remained relatively constant at 21.1%.

As a result, the Group’s earnings per share increased to JPY 1.78 (2 Singapore cents) in FY2015 from JPY 0.37 (0.5 Singapore cents) in FY2014. The Group’s net asset value per share remained relatively constant at JPY 19.11 (S$0.22) as at 31 March 2015 compared to JPY 18.06 (S$0.23) as at 31 March 2014.
The Group ended FY2015 with a robust balance sheet – with cash and cash equivalents amounting to JPY 2,412.5 million (S$28.4 million) as at 31 March 2015.

Dividend

The Group has proposed a first and final dividend of JPY 0.4 (0.5 Singapore cents) per ordinary share for FY2015, which translates to a dividend payout ratio of 22.5%. Separately, the Group declared a special dividend of JPY 0.5 (0.6 Singapore cents) per ordinary share on 11 September 2014, which was paid to shareholders on 28 November 2014.
Note: Financial numbers in S$ are calculated based on the average exchange rates of JPY 84.98 and JPY 79.57
to S$1:00 for FY2015 and FY2014 respectively.

Outlook and Future Plans

Economic recovery is underway for the Japan economy following a string of economic policies introduced by the government to stimulate the economy. According to FocusEconomics, a weak yen, low oil prices and an improving labour market are expected to drive Japan’s economic growth this year .

In addition, the depreciating yen has a positive impact on the all-important export sector. With most of the Group’s clients being domestic manufacturers, Xyec expects this trend to lead to higher demand for all its business segments.

During FY2015, the Company’s controlling shareholder Mamezou Holdings Co., Ltd. (“Mamezou”), successfully completed a partial offer to acquire 31,825,000 ordinary shares in Xyec. Pursuant to the completion of the partial offer, Mamezou’s aggregate shareholdings in Xyec had increased from approximately 29.89% to 59.92%.

Commenting on the partial offer, Mr Manabu Kobayashi, Executive Chairman, President and Chief Executive Officer of Xyec said: “Mamezou is principally engaged in the provision of IT solutions, which will provide a strong business synergy and help boost our IT Solutions business segment. The Group will also be able to tap on Mamezou’s resources and operating system to further enhance our suite of complementary services. From a geographical strategy standpoint, we will be able to tap on Mamezou’s regional presence within China and Indonesia to develop and conduct more businesses in Asia.”

“Since the completion of the partial offer in March, Mamezou has no intentions to introduce any major changes to the Group’s businesses and we continue our business as usual. We are pleased to end FY2015 on a strong note and will continue to grow our customer base as well as seek to further expand into the ASEAN region,” added Mr Kobayashi.

About Xyec Holdings Co., Ltd.

Incorporated in 2005, Xyec Holdings Co., Ltd. (“Xyec”) is one of the key players in providing integrated engineering and IT consultancy and services, to major manufacturing industries in Japan, such as automobile, aerospace, machinery, telecommunications and electronics. Xyec has a diversified and well-established customer base comprising several multinational companies, including affiliate companies of the Denso group, the Fujitsu group, the Hitachi group and the Toyota group.

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