Japanese used car trader Idom Inc. faced a disappointing first quarter due to a nationwide lockdown that overturned its profitability graph.

Revenue fell 7.2% year-on-year to Y83.7 billion ($792.7 million U.S.) for the quarter ended May 31. Idom incurred a net loss of Y914 million ($8.7 million U.S.), compared to a net profit of Y447 million ($4.2 million U.S.) in the same period last year. The company also posted an operating loss of Y153 million against an operating income of Y1.5 billion last year.

From April to mid-May, retail prices declined, which brought down the company’s gross profit per car. A reduction in auction market prices also eroded gross profit per car on the wholesale market.

However, by successfully reducing advertising costs, Idom kept selling, general and administrative expenses below the last year’s level.

Founded in 1994, Idom (TSE: 7599) runs Go2Go.jp, a c-to-c car-sharing app, car subscription site Norel.jp, and auto marketplaces Gulliver and GulliverFrima. The group has more than 500 stores in Japan, its primary market. The company also operates in the U.S. as Gulliver USA and in Australia through its majority stake in automotive company DVG.

In Q1, the Japan segment saw net sales drop 4.1% year-on-year to Y68 billion, resulting in an operating loss of Y136 million. That’s a massive drop from income of Y1.8 billion in Q1 2020.

“The decrease in sales and profit was caused by a fall in the number of visitors to stores due to the impact of COVID-19,” the company said.

The company predicted a return to normalcy by the end of the year. Net sales are expected to reach Y338 billion in fiscal year 2021 and operating profit is estimated to reach Y5.8 billion.

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