Past Message from Our President and CEO
Market Environment for Reporting Period 61 (Fiscal Year Ended January 31, 2023)
The demand for engineers from the automotive and semiconductor industries remained strong due to technological innovations, unaffected by uncertainties in both Japan and abroad.
Despite many international uncertainties such as the COVID-19 pandemic, the situation in Russia and Ukraine, and fluctuations in resource prices and exchange rates, we were able to promote our business without any major negative impact. The automotive industry, which comprises our main customer base, is in the midst of technological innovation such as CASE (connected, autonomous, shared, and electric), and the need for semiconductors is rapidly increasing due to the evolution of automotive software, as well as the initiatives to achieve carbon neutrality by 2050. Regardless of the current economic trend, the business environment of these industries has accelerated development, which caused the strong demand for engineers from Artner.
Summary of Business Results for Reporting Period 61 (Fiscal Year Ended January 31, 2023)
With increases in the utilization rate, the number of operative personnel, and the unit price of engineers, the Company achieved double-digit growth and the ninth consecutive period of growth in both sales and profit.
As a result of our enhanced sales activities focused on the automotive and semiconductor industries, we have achieved increases in the utilization rate, the number of operative personnel, and the unit price of engineers. In addition, the job turnover rate, which had temporarily worsened due to the COVID-19 pandemic, has recovered back to the level it held before the pandemic.
Based on the above, Reporting Period 61 saw double-digit growth and the ninth consecutive year of growth in both sales and profit, with sales of ¥9,242 million (up 14.1% year-on-year), operating profit of ¥1,194 million (up 18.2% year-on-year), ordinary profit of ¥1,203 million (up 16.5% year-on-year), and profit of ¥895 million (up 22.8% year-on-year). As such, the first year of the Medium-Term Business Plan has made steady progress.
Forecast for Reporting Period 62 (Fiscal Year Ending January 31, 2024)
The shortage of engineers continues. We expect active demand for engineers from projects related to carbon neutrality.
For the market environment for Reporting Period 62, a greater shortage of engineers is predicted compared to pre-pandemic levels due to increased demand for engineers from client companies and intensified competition for talent recruitment. As with Reporting Period 61, we continue to anticipate active demand for engineers for development projects at client companies in strategically important markets concerning carbon neutrality.
We will develop our approaches and businesses related to carbon neutrality on an ongoing basis by focusing on peripheral topics as well, such as materials and infrastructure. Based on the above, the Company expects to post higher sales and profits for Reporting Period 62, with sales of ¥9,797 million, operating profit of ¥1,325 million, ordinary profit of ¥1,328 million, and profit of ¥920 million.
Progress on the Plan Toward Compliance with the Listing Maintenance Criteria
We are making steady progress to comply with the listing maintenance criteria of the Prime Market of the Tokyo Stock Exchange.
As part of our effort to achieve the goal of a tradable share market capitalization of 10 billion yen, which is an incomplete item preventing us from meeting the listing maintenance criteria in the Prime Market of the Tokyo Stock Exchange, we raised the ratio of tradable shares to 70%. The earnings per share for the fiscal year ended January 31, 2023, reached 84.24 yen (up 22.8% year-on-year).
In addition, to improve capital efficiency, we aim to achieve an ROE of 20% or higher as a result of various initiatives such as using funds for M&As and increasing dividend returns (26.9% achieved in the fiscal year ended January 31, 2018).
As a result of the above, the share price reached 997 yen as of January 31, 2023 (up 16.2% compared to the transition standard date of June 30, 2021), and 1,354 yen most recently as of March 31 (up 57.8%). The tradable share market capitalization reached 7.5 billion yen as of January 31, 2023 (up 82.9%), and 10 billion yen (up 143.9%) most recently as of March 31.
Progress of the Medium-Term Business Plan (Fiscal year ending January 31, 2023 to Fiscal year ending January 31, 2025)
We are aiming for a total number of engineers of 1,600 as the Company’s target, utilizing the strength of our job-based employment system.
In the Medium-Term Business Plan, the Company is working toward a numerical management target of 1,600 engineers in total. As of January 31, 2023, the number of engineers was 1,157. For the fiscal year ending January 31, 2024, 130 newly graduated engineers will join the Company in April 2023, and 180 career engineers are planned to be hired. As the competition for hiring engineers intensifies, we will appeal the fact that Artner, which offers job-based employment with emphasis on skills, allows career advancement while experiencing a variety of projects, thereby satisfying the hopes of graduates and job seekers to achieve our target.
To Our Shareholders and Investors
Dividends increased for Reporting Period 61 with a commemorative dividend celebrating the Company’s 60th anniversary. The Company plans to increase dividends for Reporting Period 62 as well.
We would like to thank our shareholders and investors for their continued support.
After celebrating the 60th anniversary of the Company’s establishment in Reporting Period 61, we are taking a new step forward as a visionary company heading toward our 100th anniversary. Reporting Period 62 marks the second year of the Medium-Term Business Plan. As it is positioned as an important year that will determine the outcome of the Company’s final goal, all employees will work together to make a concerted effort.
The Company considers stable dividend payments to shareholders and investors as one of its most important management issues, and plans to set the dividend payout ratio to 50%. For Reporting Period 61, the ordinary dividend is ¥43.0, consisting of an interim dividend of ¥20.0 and a year-end dividend of ¥23.0 (¥4.0 increase from the previous forecast of ¥19.0). In addition, a commemorative dividend of ¥17.0 was paid to celebrate the 60th anniversary of the Company’s establishment and the 15th anniversary of its listing on JASDAQ (now Prime Market), amounting to a total annual dividend of ¥60.0 yen (payout ratio : 71.2%).
For Reporting Period 62, the Company plans to pay an interim dividend of ¥32.0 and a year-end dividend of ¥32.0, amounting to a total of ¥64.0 (payout ratio : 73.9%). We at Artner are grateful for your continued understanding support, and cooperation.
April 28, 2023
President and CEO SEKIGUCHI Sozo
