Now it is time to start the presentation of financial results for the second quarter of fiscal year ending December 2023. First, let me introduce today's attendees. In the front row table at the right-hand side, Nippon Express Holdings President, CEO, and Representative Director, Mr. Saito. To the left of Mr. Saito, President, CEO, and Representative Director of Nippon Express Co., Mr. Horikiri. In the back row, Nippon Express Holdings Executive Vice President in charge of Corporate Management Division, Compliance and Risk Management Division, and IT Digital Solutions Division, Mr. Kondo. To the left of Mr. Kondo, Senior Managing Executive Officer in charge of Global Business Division, Mr. Nagashima. Next to Mr. Nagashima, Managing Executive Officer in charge of Corporate Strategy Division, Mr. Takezoe. Next, Executive Officer in charge of Financial Planning Department, Mr. Matsumoto.
Secretariats are headed by Mr. Akaishi, Executive Officer in charge of Corporate Planning Department, Mr. Suzuki, Director of Financial Planning Department. I am the moderator. I am Tsumori from IR Promotion Office of Corporate Planning Department. Today, first, President Saito will spend a little over 20 minutes on the overview of the financial results, followed by Mr. Nagashima for about 6 minutes on the forwarding business. On the domestic logistics situation, Mr. Takezoe will spend about four minutes, total of 30 minutes. That is the time for the presentation from the company, and then we will move to Q&A. We plan to conclude the session at 5:30 P.M. Today, we will use the material of three kinds, PowerPoint presentation material, financial results, notes on the financial results presentations. It is posted on a corporate website for your reference.
At today's presentation, the main topics will be the operating results, overview of the management, and the business plan's current progress. About sustainability, governance, and risk management, we would like to take opportunities such as IR day in taking ample time to promote the dialogue. So we are going to move to the presentation from President Saito on the second quarter financial results.
Hello, I am Saito. Thank you very much for participating to the financial results presentation of the company. Thank you very much for your time in a busy schedule. Also, I deeply appreciate your continued support. Today, I will present the second quarter results of the fiscal year ending December 2023, and full year forecast, and current progress of the business plan, and the shareholders return. First, I will explain the outline of the results. Please see the page five of the presentation material.
Consolidated results for the first six months for the fiscal year ending December 2023 is shown here. Global monetary tightening prolonged aggression against Ukraine. Downward pressures against the economy continues and cargo movement continues to be sluggish. In going forward, global economic environment stabilizes. A certain recovery can be anticipated, but its timing is not visible yet. Against this backdrop, international forwarding business, the demand disrelation is causing the decrease of handling volume, and the relaxation of demand and supply balance is lowering our freight rate unit price, and the reactional downturn continues. In domestic logistics, there is a recovery in the automotive industry, but overall, the sluggish trend continues, and our consolidated results was a decrease in sales and profit year-on-year.
The operating income reduction is bigger year-on-year versus the trend of the consolidated segment profit is because of the previous year's gain on sale of the former head office, Shiodome Building, for JPY 53.5 billion, and the reactional downturn from that is occurring. Regarding the forecast that was published on May 12th, the decline of the volume in the second quarter to stop and international logistics demand to recover in the second half, that was our assumption. But business environment were not improving, but the space supply increased, which distorted supply-demand balance, and our ocean forwarding business per unit profit deteriorated. The actual performance was lower than the forecast. On page 10 and 11, variable elements considered, revenues and operating incomes breakdown for upside and downside. 21st and 28 pages, each segment's details are shown for your reference.
On page 12, Nippon Express standalone revenues by business and overview are also elaborated. The detail will be explained by Mr. Takezoe. Please see page 13. Full year consolidated business forecast. The current situation and our outlook is considered comprehensively. Versus the full year forecast announced in May 12th, we decided to make a downward revision for revenues and operating income and other incomes. Please see page 20. The revisions of the guidance is compared by segment. As I said, international logistics demand continues to be weak, and the first half results we created downside in the third quarter. July onward, air ocean forwarding handling, there is no clear change. The recovery is going to be much delayed from our initial projection. Domestic logistics also expected to continue slow trend. Logistics business, especially Japan segment's revision, is large.
Price revisions and contract reviews should be deepened further. Group powers should be maximized in controlling cost to secure the short-term performance, and also aiming to achieve the long-term vision. Core business growth and a strategy to enhance domestic business in Japan will be promoted. The reforms of the businesses and the organization will be worked upon. We aim to expand the global business, especially focusing on the pharmaceuticals and semiconductors. The new businesses and the customer foundation should be expanded. That's the strategy we are promoting. Now we have the system ready to accelerate the strategy, and growth potential is increasing. However, the external environment change. Our growth power to overcome it, we are still in the middle, so we need to accelerate the speed of the reform.
At the same time, toward the market, resource allocation imbalance need to be corrected, and also it needs to be fit better. I will come back to this point, but especially in Japan, we will not stay in a status quo, but organizations and business models transformation is necessary. The external environment impact, we cannot be excluded from, but the growth power to overcome the impact, that's what we need to be as NX Group, and we will be promoting the transformation of the system and the business structure. That's all for the overview of the results and the full-year forecast. In adopting IFRS, the current business plan target numbers will not change, but the IFRS-based numbers are converted in a Japan GAAP. Please see page 29. The progress for the numbers and the targets of the business plan and the forecast.
The slow COG movement energies and personnel cost, various costs are rising. Toward the final year target, in each target, we are seeing the underachievement. On the other hand, versus 2019 pre-COVID, revenues up 12% and operating income is 1.5x higher. That shows the business plan is delivering the concrete results. Please see page 31. Next, let me elaborate on the business plan. First, core business growth strategy. Our focus industry actual is presented here. The second quarter, the accumulated revenues with the forwarding business unit price deterioration, we did not achieve the target for the focus industry. Also versus 2023 target, excluding overseas apparel, we fell short of the benchmark 50%. Semiconductor industry is expected to be down by 10.3% for the global semiconductor market 2023 year-on-year. So the first time for four years since 2019, the negative growth is expected.
SME, which is one of our main products, there are significant shift from the air transportation to ocean transportation from last year to this year. We are expanding the handling in ocean transportation, but the unit price deterioration is creating a big downward variance. On the other hand, new semiconductor production factory plans in a global scale, there are number of new plans and potential demand is increasing. We will continue to promote the account management, mainly on the semiconductor manufacturers and equipment manufacturers in and outside of Japan. We will promote the investment of a warehouse in front of semiconductor factory. Forwarding and heavy haulage and construction, we are going to fully utilize the functions of the group and meet the demand in the 2024 after. We expect growth of the top line related to the semiconductor industry.
We are seeing the international logistics reaction of downtime is creating an impact, but the handling of the logistics, including warehouse, home and abroad, they are increasing overall in the recovery phase of the volume of the logistics. We are confident that they will bear fruits. Next, on the business axis, air and ocean forwarding volume actuals and the annual target. Please see the material. For the forwarding business, from the second half of last year, easing of demand and supply continued and the results of the forwarding volume, there is a contraction from the first quarter, but reaction of downtime continues from the last year. In this situation, expanding the handling and the reduction of the usage cost will be the key point. The detail will be presented by Nagashima, who is in charge of the business of the forwarding. Please see page 32.
On the strategy to enhance domestic business in Japan, the productivity enhancement, deepening the integration of land, sea, and air, and network products strengthening. We are seeing the progress as recorded, and we are delivering fruits on the outsourcing cost reduction. Next, please see page 33. Our efforts to reduce the back office cost. At the end of the second quarter of the current fiscal year, accumulated reduction amounts to JPY 5.3 billion versus JPY 9.5 billion of target. The progress is 56%. Back office cost, we are looking at the next business plan and existing Nippon Express centered approach. We are expanding the scope to total group in working on the cost reduction of the back office. In addition, cost reduction and improvement level of approach has a limitation, so we consider the reorganization of our Japan business is required. Please see page 37.
Restructuring of Japan business, we launch the business structure reform project to work on the concrete discussion. The project will make a recommendation for the next term business plan, but immediate initiatives will be shifted to the line operation for the execution. Later, I will talk about the direction of the recommendation toward the next term business plan. Today, we have announced execution of MOU to integrate the Nippon Express Co.'s special combined delivery service business with Meitetsu Transportation Co., Ltd. For domestic logistics business, the continued shortage of our truck drivers are continuing and getting increasingly severe. With the impact of a change of a structure of the industry, the total cargo volume is expected to go down. In the special combined delivery business market, we cannot expect the significant increase of the volume.
The two groups, by combining the special combined delivery business and establishing the new structure, will lead to expansion of the business and enhancing the strength. By January next year, we aim to conclude the final agreement in the integration of the business. Please see page 38. Our efforts toward the realization of the long-term vision. We continue to accelerate the transformation and the holding structure to realize the growth globally and also the strong group management. We will continue the restructuring. In order to accelerate the implementation of global business strategy, GBHQ, which is global business headquarter, the restructuring of the organization was conducted last year. The establishment of the organization is positioned as day one to strengthen the global business structure, and day two is being worked upon to develop customers and working on the new market.
Day three, targeting January 2024, mainly led by GBHQ, the large framework to be established to enhance the function and role. We aim to be the company having a sense of presence in the global market and catch up to the mega forwarders of European market. We capture supply chain and the logistics, more global perspective, so not only Japanese, but utilizing M&A to acquire non-Japanese customers. We acquired company called cargo-partner, which is located in Austria, as a forwarding company. Now we are moving toward closing and making new procedures related to Competition Act. The strategic significance of the M&A in the three axis, customer, industry, business and region. In these three axis, we pursue synergies, and the PMI will be very critical.
The establishment of a PMI structure is mainly led by GBHQ and enhancing the function of GBHQ and further accelerate the growth of the global business. This M&A is the largest ever as the company, but this is not going to be the last. The regions that we have not developed fully, such as Africa, we will expand business further by proactively utilizing M&A to tap into new areas to enhance the synergy of the whole group. As a result, our business portfolio will evolve to different from the existing ones. On the profitability and the capital efficiency, we are going to elevate our business to a higher level. In addition, regarding Japan, overlapping businesses and functions need to be organized and integrated within the group and to strengthen our specialty business.
Regarding the restructuring of Japan business, as I said earlier, our business resource allocation needs to be optimized versus the market. In the past, we treated Japan in a uniform manner in terms of expected earnings and approach to customers. Tokyo, Nagoya, Osaka, and other regions, there are big differences in the quality and the scale of the market. Our mother market is Japan, Tokyo, Nagoya, Osaka. There are many customers located, and there is a direct linkage to global supply chain. For us to grow globally, this is the most important market, and this is a core of the domestic account management. For us to grow globally, we will further concentrate our business resource required. For other regions, we see a trend of returning the production back to Japan, so we capture those changes, but not staying within the legacy.
Meeting market attributes, we will optimize the resource allocation. Earlier, as I said, in the semiconductor industry situation in Japan, there are various regions forming or planning the new industrial cluster. Versus this trend, we are already investing in the warehouses next to customers' locations. Our efforts for the focused industries and the new business seeds start to engage with the structural reform we promoted on a strategy to enhance domestic business in Japan. Now we are seeing an environment which allows us to shift the business resources, which creates a key point, key features for us to promote the business strategy. Actions toward the restructuring of Japan business already started. The strategy to enhance domestic business in Japan is now moving to a new phase from cost reduction to the improvement of the efficiency of capital.
That is all for our efforts on the business plan. This fiscal year is a final year of the current business plan, and it is an important year to bridge toward the next term business plan. Our business environment continues to be difficult, but no matter how the environment changes, consistent revenues and profits should be generated. We will take a long-term perspective and a further deepening of the core business growth strategy and the strategy to enhance domestic business in Japan is required, and we will continue to work on that. Please see page 40. The shareholders' return of the current fiscal year, the forecast of the dividend is JPY 150 each for interim dividend and a year-end dividend, and a total JPY 300 payout ratio 48.3%, and a total return ratio, including a share repurchase, is 66.6%.
For your information, the payout ratio on Japan GAAP is 43.6%. Total return ratio is 60%. The total five years total return ratio from 2019 is 55.7%. Going forward, we will keep the target of the business plan in mind and also eyeing to the next term business plan to enhance the return to shareholders. That is all for the overview of the second quarter financial results of the current fiscal year. We aim to move toward to realize long-term vision as a whole group. So we ask and appreciate for your continued cooperation. Thank you.
Next, Mr. Nagashima, please.
Thank you. I will present the overview of the ocean air forwarding business and our future actions. Please see page 31.
Air and ocean forwarding volume actual, as Mr. Saito elaborated, the reaction of downturn from last year continues. It was lower than the actual of the previous year. Ocean transportation business continued to see the slow cargo movement. Cargo movement from January to June this year, it was down 5.3% year-on-year, 84 million TEUs. This level is about the same as 2019, showing a slow market environment. Freight rate suddenly dropped in the fourth quarter last year, and it's been trending weak since then. It is currently at the pre-pandemic level. Return to direct handling of shipping company is seeing a volume is down by 6.9% year-on-year, so rate of decrease is bigger than the market. In terms of the forecast, the Q4 previous fiscal year, the cargo movement was slow.
Annual ocean container transportation market is expected to increase by 1% or 2%, but currently no change is observed. Even at the peak season, strong recovery is not anticipated, so the slow trend is likely to continue. 2024 global economy growth outlook is about 3%. The moderate recovery is projected. In addition, newly built large-size ships are entering to the market, so even if the demand increases, the fare will stay low for some time. Air transportation. According to IATA report, 2023 international air cargo volume is expected to be down by 4.3%, so continuing from 2022, negative growth is forecasted. The single months, June statistics shows down by 7.5%, so the rate of reduction is bigger versus the annual projection.
This level is down by 6.9% versus the same month, 2019, which is lower than the demand of the pre-COVID, but the recovery of passengers' flights is increasing the space supply by 1.6%. The current air freight rate is impacted by various cost increases, such as route changes from the Ukrainian situation and cost increases such as the energy price. Versus the pre-COVID, the level is higher by about 40%. However, the downward trend continues and in the slow demand situation, it may deteriorate further. In this situation, intra-Asia volume decrease from and to Japan is large and a shift to marine transportation, including the automotive industry, is occurring. Our handling volume versus previous year is down by 24.1%. The forecasting going forward is similar with ocean transportation.
No strong recovery is anticipated in peak season and the 2024 economic growth to be low, therefore, this difficult situation to continue for some time. That is all for the overview of the forwarding business. At the beginning of the fiscal year, we were projecting the recovery of the volume in the second half of the year. For the fiscal year, the volume reduction for ocean will be a little less than 10% and for air, a little less than 20%. GP per unit will decrease but maintain certain level. However, in a difficult situation, the air transportation volume and the ocean freight forward GP per unit was lower than our expectation. Regarding the situation of the GP per unit is described on page 48 to page 50 for your reference. Forwarding business, the key is to expand the volume and the reduction of the usage cost.
As the short-term focus, we will be expanding the scope of the bidding to secure the volume and also reduce the usage cost on the air transportation toward the winter season. We have already started the reconsolidation scheme using the Haneda Airport, and we will be expanding the handling of this scheme and replicating this to airports other than Haneda and expanding the sale on a long haul starting from Asia and improve the efficiency of the consolidation. We see return to ocean transportation from air transportation. We capture some cargo in ocean transportation, but with the promotion of the return to going directly to a shipping company, our total forwarding handling volume is coming down.
Overcoming this situation to expand the forwarding business, not by the transportation mode such as ocean transportation or air forwarding, but we have to capture the total supply chain and establish end-to-end solution and taking advantage of a global sales and marketing structure and promoting the sophisticated account sales and marketing to strengthen the sales expansion of our contract logistics to promote the volume expansion strategy. That is all from me. Thank you very much.
Next, Mr. Takezoe, please.
Thank you. This is Mr. Takezoe. I will elaborate on the domestic logistics and Nippon Express Co.'s business situation, which creates the big portion of the logistics business. Please see page 12. As Mr. Saito said, there are some delays in improvement of the business environment. Nippon Express and domestic group companies not seeing the recovery, so domestic logistics are seeing the slow trend.
Automotive industries cargo handling, we see recovery, but steel and chemicals, material related industries cargo handling, there are no recovery as observed yet, and this is due to the inventory adjustment and transitional time lag are created. But going forward, we will continue to monitor industry and our customers' production activities. In terms of the domestic logistics business performance, excluding the revenues of ocean transportation, port, air, and heavy haulage, and the construction business from the total revenues of the Nippon Express, the warehouse storage business and in-factory business expanded, and year-on-year, we see an upside of 1.7%. Versus 2019, it is up by 0.6%. On the other hand, railway small load shipment business and the moving and relocation business, there is big reductions. Next on cost. Year-on-year variable cost and fixed cost changes are shown in the material.
Year-on-year, with the change of the revenues, the expenses increased in line, but with the impairment of last year, depreciation expenses decreased, so in reality, versus a cost increase, the increase of revenue is not sufficient. Personnel expenses, energies, and outsourced unit costs are rising, and price revisions and a review on contract are being promoted. And there are some results shown, but it is not sufficient. We need to strengthen these efforts. The price revision effect of the first six months of the current fiscal year is as shown on page 11. The total group, the impact is JPY 5.4 billion, and in net, excluding JPY 4.6 billion of outsourcing expense increase, the actual impact to the profit is JPY 800 million.
In our current business plan period, strategy to enhance domestic business in Japan is working on the back office cost reductions. Price revisions are contributing to secure the earnings. At the same time, various cost increases, such as the employment system reforms from the same pay for same job and the cost increases starting from the last fiscal year, especially in the second half, have not fully been absorbed. We will continue to work on the strategy to enhance domestic business in Japan for further cost reductions and price revisions, and further deepening the contract revisions. Population declining and also change of the industry structure, the total cargo volume is likely to go down.
We will not wait for the environment to recover by itself, but we will cut into new industries and new areas, mainly on the focused industry, and also improve the capital efficiency and promote the reforms on the business structure. That is all from me. Thank you very much.
That is all for the presentation from the company.