Honyaku Center, Japan’s largest Language Service Provider, reported results for the first half of its fiscal 2015 (which ends on March 31st 2016). The Tokyo-headquartered company reported revenues of JPY 4.262bn ($34.6M) for the six month ending on September 30, 2015. This is down by a little over 2% compared to the same period in 2014. Gross margins also fell slightly from an est. 44.2% to 42.3%. Honyaku Center managed to cushion the impact of the reduced topline and gross margin by taking out JPY 104M ($845,000) in SG&A expenses, leaving the company with a net income of JPY 61M ($495,000), which is slightly down from last year’s JPY 86M ($698,000).
Honyaku Center’s core translation services business, however, was not to blame for the lagging performance.
The unit, which accounts for around 75% of revenues, notched up a respectable 5% growth year-on-year (YoY). What pulled down the results was the poor performance in its other, smaller business units. Temporary Staffing was down 35.8% YoY, which the company attributed to the sale of one of its subsidiaries in the recruitment business. Interpretation declined by 2% to JPY 445M ($3.6M), which came despite the company’s assertion that activity in the Investor Relations area picked up. Honyaku Center’s Language Education arm generated JPY 106M ($860,000M), which represents a more substantial drop of 6.7%. The company reported an even bigger 8.3% decline to JPY 136M ($1.1M) in its Convention business, and this despite the substantial contract in Q1 for the “The 7th Pacific Islands Leaders Meeting”. In the Other category, Honyaku posted a healthy 42.5% jump in revenues to JPY 72M ($584,000M), which is mainly thanks to a boost in the company’s patent applications support business.
