My name is Ando, and I am the CEO of our company. Thank you very much for taking time out of your busy schedule today to participate in our financial results briefing for Q2 FY 2024. I will now start by explaining our financial results according to the explanatory material, and then we will move on to the Q&A session. We would like to take as many questions as time permits. Now, please look at page 4. These are the points I will discuss today. The first point is our Q2 results. Domestic sales of new vehicles remained negative through June, but with the exception of August that was affected by a typhoon, sales were positive in July and September on a YoY basis, with a recovery in new vehicle sales expected in the future.
Meanwhile, demand for used vehicles remained strong in both domestic sales and exports, with USS's auction results showing a 3% decrease in the number of vehicles consigned, and a 9% increase in vehicles contracted, resulting in record-high consolidated results in terms of sales and in all profit categories. The second point is the upward revision of our full-year forecast. The main factor was the increase resulting from the upward swing in Q2, as we kept the 2nd half forecast to almost what is stated in our plan. The third point is shareholder return. In line with the upward revision of our earnings forecast, we will revise the dividend per share upward from JPY 41.2 - JPY 41.6.
In addition to the dividend, we expect to achieve a total return ratio of 80% or more this fiscal year through the repurchase of shares of up to JPY 10 billion, which was announced at the same time as the recent secondary offering of shares held by financial institutions. Please go on to page 7. First, let me explain the main factors behind the increase in net sales. The main factors behind the revenue growth were the increase in the ratio of contracted vehicles and rise in the unit price of fees due to CIS price increases and other factors in the auction business, and the surge in the number of vehicles sold in the used car purchasing and selling business. Next, the decrease in purchases in the cost of sales was due to a decline in large-scale demolition work in the industrial plant recycling business.
The rise in the cost of goods sold was mainly due to an increase in the number of used vehicles sold in the used car purchasing and selling business. Next, the drop in sales commission under SG&A was due to a drop in the number of referrals for demolition work in the industrial plant recycling business. Please see page 9. The trends in new and used cars are as explained in the beginning. The number of used vehicles exported has a significant impact on the overall auto auction market. Export volume has gone down from the record-high volume in the 1st half of the previous year but is still at a high level. Please see page 11. The slide you are looking at compares USS to industry average for the unit price of contracted vehicles.
With regard to the recent trend in the unit price of contracted vehicles, we have analyzed that while new vehicles have been in short supply again since January and the number of vehicles consigned has declined, the demand for used vehicles has been strong, thereby resulting in an increase in the unit price of contracted vehicles. Next, the difference between the USS and industry averages for the unit price of contracted vehicles has widened from about JPY 200,000 per vehicle before the pandemic to about JPY 600,000 in September 2024, the most recent month. Analyzing the difference between the USS and industry averages, we believe that USS has an overwhelming competitive edge in terms of the relatively young, high unit price vehicles that are used for retail purposes in Japan. This slide explains the performance of the auction segment. The lower left graph shows the changes in market share.
From January to June 2024, the share increased to 41%. This was due to a decrease in the share of automaker-affiliated auction houses as a result of lower sales of new vehicles. Next, I will explain the unit price of fees. First, the consignment fee per vehicle was JPY 5,782, up JPY 103 YoY. The main positive factor was the increase in the percentage of consignment in the high unit price sections at the Tokyo and HAA Kobe sites. Continuing on, the contract completion fee per vehicle was JPY 8,773, a decrease of JPY 42 year on year. The main factor was the increase in rebates allocated to large lot sites. Next, the successful bid fee per vehicle stood at JPY 14,196, up JPY 830 year- on- year, mainly due to a JPY 3,000 increase in the CIS successful bid fee in April.
Rabbit reported an increase in both sales and profit, with net sales of JPY 3.7 billion, up 16% year- on- year, and an operating profit of JPY 100 million, up 61% year- on- year thanks to the rise in sales volume, the firm auction market, and the increase in gross profit per vehicle. The accident-damaged vehicle purchasing and selling business also posted higher sales and profits, with net sales of JPY 2.6 billion, up 24% year- on- year, and an operating profit of JPY 100 million, up 167% year-o n- year, due to the increase in sales volume as well as the firm auction market price and higher gross profit per vehicle. In the resource recycling business operated by our subsidiary, ARBIZ Corporation, we maintained the same handling volume as in the previous fiscal year.
But due to such factors as the non-ferrous metal market prices remaining high, we recorded increased sales and profit, with net sales of JPY 2.8 billion, up 10% year- on- year, and an operating profit of JPY 300 million, up 52% year- on- year. In the industrial plant recycling business operated by SMART, we posted an operating loss due to the decline in the number of orders for large-scale demolition projects. In the auto auction peripheral business, we started offering new auto loans in April 2023 through a capital and business alliance with GMS. As of end of September 2024, there were 780 member companies, 5,800 loan transactions, and approximately JPY 7.7 billion in loans executed, and we will continue to expand our business. I will now explain our full-year forecast. As mentioned at the beginning, our full-year forecast has been revised upwards to reflect the results until Q2.
On the next page and beyond, we have stated the factors that may cause fluctuations in operating profit in the second half and the full year, as well as segment-by-segment forecasts. So please do take a look at them later. Please see page 23. From here, I will explain the market environment and our mid- to long-term initiatives. First, this slide shows the changes in market share from 1990 to date. USS holds the industry's top market share at 39.6% as of 2023, and we're aiming for a 50% share in the long run. There are plans to expand capacity over the next three years by building or rebuilding large sites in Yokohama, Tokyo, and HAA Kobe.
In addition, we will continue to aggressively invest in talent, such as improving the convenience of auctions through digital transformation and strengthening vehicle inspectors, with the aim of achieving a 50% market share over the long term. This slide shows how we view our mid- to long-term growth. We will continue to focus on the auto auction business to secure stable earnings and growth. But we also intend to enhance overall growth by achieving even greater growth in the recycling and other businesses as our next pillar following the auction business. Next, I will explain how the funds will be used over the next three years. The cumulative growth investment from FY 2024 to 2026 will change from JPY 20 billion to about JPY 30 billion. This is due to the increase in capital expenditures at the Yokohama site and the Tokyo site's capital investment of approximately JPY 15 billion.
As for shareholder return, we expect to achieve a total return ratio of more than 80%, or approximately JPY 90 billion. Next, I would like to discuss our plans for future growth and investment. Construction of the Yokohama site will begin this month, November. We expect to be able to complete our construction in January 2026. As explained earlier, we're considering the renovation of large sites with room for growth and the restructuring of our auction core system. Please see page 28. This shows our dividends since our stock was listed on the stock exchange. As explained at the beginning, our annual dividend for 2024 has been revised upwards to JPY 41.6. We aim to increase our dividend for the 25th consecutive fiscal year. This slide shows the progress of our share repurchase program that has been implemented since October. And this slide shows our total return ratio.
With this, I would like to conclude my explanation of our financial results. Thank you for your attention.
President Seta will answer your question.
Yes, I Seta will answer. In the presentation given by the chairman earlier, he explained that the cumulative CapEx in the next three years will be more than 30 billion JPY. Our current share is 41%, and we're aiming for 50% in the long run through investment in hardware and strengthening sales in existing venues. As an intermediate goal or milestone, we would like to achieve 45% through our own efforts. We raised CIS fees last year, but we'd like to wait and see about USS Japan for a while longer. Because for USS Japan, we just introduced the wide screen or curved screen for our customers, and they've not yet become accustomed to it. Actually, you can choose between a flat screen or the wide curved screen. USS Japan is one of the most likely candidates for a price hike, but not for the time being, at least not within this year. We're hoping we could raise the price at some point next year.
President Seta will answer your question.
In the 1st half of this fiscal year, new car registrations were down 2.2% from the previous year due to factors including scandals at automakers. In the 2nd half, therefore, we can expect for an increase in new car registrations, which is very positive for us. We believe that more new car registrations will lead to more used cars in distribution, which will be a very favorable tailwind for auctions.
Now, regarding successful bids, the contract completion rate is currently declining towards the end of the year due to various seasonal factors in the industry. As completion rates come down, the circulation volume goes up, and that's how the auction market works. As for future trends of successful bids, we expect sales to gradually pick up as the new year, 2025, starts. Also, the question of how to split domestic and overseas exports is quite difficult. This is something that the market will decide. However, the demand for used cars for export and domestic use will become even stronger with sustainability. In this industry, the contract completion rate peaks in October, and as we get into November, we're seeing a slight decline, even here at the Nagoya venue.
We really cannot expect for a great completion rate during November and December, especially December, and this has been the seasonality for decades, but then in the latter half of January and February and March of next year, the contract completion rate will come back up, and prices will also rise. It's this seasonality that we repeat, so I feel that the peak season in Nagoya and the other venues is now, really until the end of November. There is the impact of the exchange rate, and the U.S. presidential election is currently going on, and the exchange rate will move depending on who will be elected. I think everybody is sort of waiting and seeing to see what will happen.
Vice President Yamanaka, responsible for GMS, will answer your question.
The loan balance for the GMS partnership grew extremely high in the first year. But as we got into the second year, we're starting to see some loan defaults. The approval rate has dropped slightly, and the amount of loans is also coming down slightly. However, applications have been very strong, and compared to the first year, monthly sales have remained roughly flat. We've recorded a reasonable amount of sales in the 1st half, and we are particularly pleased that operating income has become profitable. So by March of this fiscal year, we plan to improve systems and team structure too. And once these are in place, we're hoping to get back to an expansionary trend in the following fiscal year. This also depends on how much business we can grow with the current 19 venues that we have.
We'd like to quickly reach 45% share with our venues in Tokyo, Yokohama, HAA Kobe, and possibly Kyushu as well. That's why we're currently drawing up the construction drawings for Tokyo venue. The groundbreaking ceremony for Yokohama is coming up next week on November 11th. With Tokyo, we hope to do 20,000 units per week from 17,000 units today. We hope to reach 45% market share as soon as possible and take it further to 50%. However, since it is difficult to build up volume in smaller venues, we are hoping to gain greater growth in Tokyo, Nagoya, Yokohama, Kyushu, Kobe, and so on.
Yes, we have been saying for quite some time that we want at least one more venue to make a total of 20. M&A negotiations have so far been mutually difficult. We do wish to open another auction site, we do, but finding good locations is hard. We have no choice but to aim for 45% and 50% market share with our current venues. As I mentioned earlier, we just raised the CIS fee by JPY 3,000, which is much higher than the JPY 1,000 or JPY 2,000 hikes in the past. We've raised it up by JPY 3,000 at once. Next is USS Japan, and we know that its fee is not expensive. It's still low compared to other internet peers. Although we'd like to find the timing to raise this fee, we just changed the USS Japan system recently.
We'll have to wait and see how things go before we can hike our prices further. In the real venues, there are various fees such as consignment fees, contract completion fees, and successful bidding fees, and we'd like to raise them with consideration to price competitiveness. But also, we have to be mindful of the surrounding conditions too. As explained before, we'd like to find the right opportunity to hike these prices, like a new venue or a new system.
Vice President Yamanaka, head of finance, will answer your question.
I, Yamanaka, will answer. We received an offer from Mitsubishi UFJ Bank to sell approximately 3% of its shares, and we did consider the option of purchasing all of the shares from Treasury. However, we wanted to increase the share liquidity and the number of retail shareholders. Also, we heard from institutional shareholders that it was difficult to purchase our stocks with sufficient scale. This is why we chose to offer our shares for sale, to broaden our shareholder composition, and to increase shareholders, as well as to increase liquidity. In fact, the secondary offering was completed smoothly with considerable demand, and this has increased the number of shareholders to a certain extent, as we had expected.
So to your question, will this form of sale happen again?
Well, Mitsubishi UFJ Bank is actually the only financial institution that had a large number of shares. And so although there are a few other institutions that own some shares, we were told that this would be the last time a significant volume of shares would be available for sale. Therefore, we took this opportunity this time. And I would say that there is a very narrow possibility of this happening again in the future.
President Seta will answer your question.
Currently, there are very few electric vehicles in distribution. Among new cars, the EV ratio is 3%, and in domestic auctions, 0.5%, so both are very low. Currently, the car dealers are exercising their experience and intuition. They observe the condition and mileage of the electric vehicles and estimate the level of deterioration. To accurately diagnose the battery capacity and deterioration, you need to increase the pressure while conducting quick charging. We are starting to see easier test kits, but there seems to be not so much demand yet. However, if we are to see the launch of some bestseller EVs in the future, the distribution of used EVs will increase. So with this in mind, we're hoping to collaborate with some company in the future to develop a device that allows for easy and accurate testing.
Yes, we've announced a total return ratio of 80% or above for the next three years, including this fiscal year. And we will continue to consider policies that realize high levels of shareholder return. Regarding capital investment, construction of the Yokohama venue will begin next week on November 11th, and this is scheduled to open January 2026. Initially, we estimated CapEx to be JPY 8 billion, but due to soaring construction costs, we've raised that to about JPY 10 billion. Then the construction of the Tokyo venue will begin, and this is expected to cost around JPY 15 billion, with completion by spring of 2027, one year after the completion of the Yokohama venue. In addition, approximately JPY 5 billion to replace the systems, and thus capital investments will be roughly JPY 30 billion over the next three years. We will keep you informed of any changes.
After that, we plan to slightly renovate HAA Kobe and another local venue in Fukuoka, Kyushu. It's not a large amount of money, but we would like to replace the facilities, including the computers, as they're gradually becoming older.
President Seta, who serves also as president of ARBIZ, will answer your question.
Yes, the 1st half figures were negative, not good. The business has been growing well since we started in 2019. However, in the 1st half, we lost orders due to various factors. The construction period was extended, and thus the negative profit year- on- year. The order backlog for the full year is more than JPY 4 billion . We're hoping to somehow bring the 2nd half to positive. In any case, this is an interesting business that we have launched in collaboration with the SMBC Group, and we're aiming for sales of JPY 10 billion in the mid to long term while making maximum use of their information network. We're putting our efforts into achieving JPY 10 billion in sales in the next two to three years.