Although the Japanese economy exhibited some signs of recovery in the first quarter of the consolidated fiscal year ending in March 2011, many companies continued to reduce IT-related investment and rein in expenses. The current business environment therefore remains harsh.

According to the “Specified Service Industry Dynamic Statistics” collected by the Ministry of Economy, Trade and Industry (published on July 15, 2010), sales in the information services industry have shown negative growth in each of the 12 months from June 2009 up to May 2010.

In these circumstances, the Information Development Group (“ID group”) continued to place the highest priority on personnel development while making a variety of other efforts, including improvement of operating efficiency through the shared use of the group’s management resources and group-wide sales efforts targeting existing customers.

In our core business of system operation and management, despite the price reductions requested by some customers, total revenue slightly increased over the same period of the previous year due to the identification of potential needs and a shift to value-added services. However, total revenue for the consolidated first quarter of the ID group decreased to 4.03 billion yen (-4.1% from the same period of the previous year) due to adverse factors, including the completion of a large data input project, slow growth in the number of new orders received, and weak orders for software development.

Although the ID group made intensive efforts to enhance productivity by improving business processes, profitability failed to increase due to the price reductions sought by customers and other factors. As a result, operating profit and recurring profit decreased to 176 million yen (-30.5% from the previous year) and 197 million yen (-19.3%), respectively. On the other hand, net profit for the first quarter increased to 101 million yen (+1.6%).

Going forward, many companies are expected to continue to reduce IT-related investment and seek cuts in costs. The business environment will therefore remain challenging.

Under these conditions, the ID group will make efforts to provide more higher quality and price-competitive services by, along with the global strategy, further continuing to implement the cross-divisional business operations outsourcing (BOO) strategy in pursuit of a “one-client, multiple transactions” model and by promoting our IT platform solutions business (design and configuration of low-cost, highly reliable system operations environments). At the same time, the ID group will further improve operations efficiency and productivity.

As a result of the efforts mentioned above, the performance of the ID group in the current consolidated fiscal year is expected to be as follows: total revenue of 17.5 billion yen (+1.4% over the previous year); operating profit of 1.05 billion yen (+23.4%); net profit of 550 million yen (+254.7%).

The ID group is determined to continue efforts to provide our customers with “services that delight” by placing our top priority on human resources development and further improving the skills and productivity of employees.

I hope that you will continue to support the ID group in the future.