Japan Post Holdings Co. has announced plans to sell off the freight division of its Australian unit Toll Holdings Ltd. to focus on its international logistics business, particularly in Asia.
Japan Post Holdings said Thursday it is aiming to expedite a turnaround in performance by spinning off the loss-making Toll division, which operates in Australia and New Zealand.
The group's international logistics businesses, which is handled by Toll, has been in a prolonged slump. Toll posted an operating loss of 8.2 billion yen in the April-June period this year.
The company was being weighed down by the logistics business operations in Australia and New Zealand -- which accounts for about 30% of Toll's entire sales and made up the majority of the deficit.
Japan Post Holdings acquired the Australian logistics company for 620 billion yen in 2015, aiming to boost its overseas business amid a decline in domestic mail volume in Japan.
However, a downturn in the Australian economy led to a decline in results, and the company posted a loss of about 400 billion yen in the fiscal year ended March 2017.
Japan Post Holdings has been unable to emerge from the red despite restructuring its management team and cutting personnel.
Due partly to the economic downturn caused by the novel coronavirus pandemic, Japan Post Holdings concluded that it would be difficult to rebuild the business on its own.
However, it is hard to predict whether the sale will be completed in a way that matches the company's desired conditions.
"There's no guarantee that the businesses will be sold," a Japan Post Holdings official said.
Japan Post Holdings is facing a number of management issues, including a loss of credibility due to improper sales of insurance products by its Japan Post Insurance Co. unit, and a decline in the share price of Japan Post Bank Co. due to investment difficulties caused by low interest rates.
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