We will meet your expectations by maintaining high growth based on the self-storage business.
Arealink Co., Ltd.
Arealink is transitioning to an “operating owner” business model, focusing on earnings from self-storage operations to be a company resilient to economic fluctuations.
I would like to begin by thanking all our shareholders for their generous support.
Arealink posted gains in revenue and earnings for the fiscal year ended December 2019, exceeding our targets for net sales, operating income, and ordinary income, which were revised upward during the period. However, we also recorded an extraordinary loss of \5.9 billion, resulting in a net loss for the year. This was due mainly to \5.0 billion in provision for loss on repurchases.
We made this provision because of the possibility that Arealink will repurchase from customers storage containers sold by the company that have been certified as buildings under Japan’s Building Standards Act. This is a temporary loss, and not a large outflow of funds, so will not have a major impact on the company’s financial condition.
Considering the economic outlook, Arealink has decided to transition to an “operating owner” business model in order to secure stable growth and profitability, and establish a robust corporate structure resilient to fluctuations in the economy. We will begin by making our own investments in outdoor containers, shifting our focus to earnings from self-storage operations and improving profitability. At the same time we are strengthening the land rights management (leasehold land) business, making it a second source of earnings supporting the self-storage business.
In the self-storage business, Arealink is continuing to open outdoor container locations in regional areas, aiming to secure overwhelming market share and profitability in Japan. We are also pursuing such measures as limiting campaign price reductions, and the 100 yen project, in order to improve earnings and boost profitability. We are differentiating ourselves from the competition, developing new products and services, and reaching out to potential customers.
In the leasehold land business, Arealink pursues business in line with its principle of “finding solutions for difficult situations.” This is a low-risk, niche business that generates stable earnings, and we are strengthening our efforts.
Arealink’s guiding principle is to “provide convenience, joy, and excitement.” In today’s constantly changing world, our desire is to be a company that plays a vital role in society, and where people are proud to work.
I hope that all our shareholders will continue to enjoy growing together with us. Thank you for your ongoing support.
President & CEO
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