Hello, it’s IINO.
I would like to broadcast IINO san’s Logistics Radio.
Today, I would like to talk about, “Kintetsu GHD completes TOB for Kintetsu World Express.”
Daily Logistics Radio by IINO san in 8th July 2022
Kintetsu World Express Becomes Subsidiary of GHD
Kintetsu Group Holdings, GHD announced on July 6 that TOB, tender offer, it had conducted for KWE, Kintetsu World Express, had been completed.
KWE will become a consolidated subsidiary of Kintetsu GHD and is expected to be delisted.
GHD to Corporate Business
The company aims to grow its corporate business as Corona pandemic and declining population along the railroad line make it difficult to grow the railroad business and leisure-related businesses.
In May, the vice president of Kintetsu GHD stated that the aim of TOB was to “develop and strengthen businesses that are not affected by the movement of people.”
KWE will become a consolidated subsidiary of Kintetsu GHD on July12.
While Kintetsu GHD’s revenues are mainly from consumer-oriented businesses such as railroads, leisure, and distribution, the company intends to increase the ratio of sales to corporate customers by incorporating KWE’s international logistics business.
The company also hopes to leverage KWE’s overseas bases to expand overseas in real estate and other businesses.
Financial Results of 2 Companies
In May, Kintetsu GHD forecast that its consolidated net income for the fiscal year ending March, 2023 will be $200 million, down 37% from the previous year.
On the other hand, KWE expects to be $237 million, down 26%.
This is a significant drop from the previous year because of the strong performance of the previous year.
Since Kintetsu GHD is a consumer-oriented company, it appears that this is due to the fact that consumers have not yet fully returned from the Corona pandemic.
I am personally concerned about what will happen to KWE in the future.
It will be delisted and the market and shareholders will no longer have any say in things, but I wonder what will happen now that it will have a parent company.
I will keep an eye on it.
That’s all for today. Thank you.