News Releases

Consolidated Financial Results for the 1st Quarter of the FY2016

(Rounded down to the nearest million)

Business results for the first quarter of the year ending March 31, 2017

Operating results

(Percentage figures denote year-over-year changes.)
  Net
sales
Operating
income
Ordinary
income
Profit attributable to
owners of parent
Million yen % Million yen % Million yen % Million yen %
First quarter,
year
ending March 31, 2017
11,087 -4.4 1,337 119.5 1,399 111.1 908 163.9
First quarter,
year
ending March 31, 2016
11,595 -10.2 609 -59.2 662 -56.9 344 -64.0

(Note) Comprehensive income
First quarter of the year ended March 31, 2017: ¥935 million (165.2%)
First quarter of the year ended March 31, 2016: ¥352 million (-63.8%)

  Net income per share Diluted net income per share
Yen Yen
First quarter, year
ending March 31, 2017
61.47
First quarter, year
ending March 31, 2016
23.30

Financial position

  Total assets Net assets Shareholders’ equity ratio
Million yen Million yen %
First quarter, year
ending March 31, 2017
46,454 29,635 63.8
Year ended March 31, 2016 47,139 29,291 62.1

(Reference) Shareholders’ equity
First quarter of the year ended March 31, 2017: ¥29,635 million
First quarter of the year ended March 31, 2016: ¥29,291 million

Dividends

  Annual dividends(Yen)
First
quarter-end
Second
quarter-end
Third
quarter-end
Year-end Annual
Year ended March 31, 2016 10.00 40.00 50.00
Year ended March 31, 2017        
Year ended March 31, 2017
(Forecast)
  10.00 40.00 50.00
(Note) Revision of the most recently released dividend forecasts: No

 

Forecast earnings for the year ending March 31, 2017

  Net sales Operating
income
Ordinary
income
Net income
attributable to
equities of
parent
Net income
per share
Million yen % Million yen % Million yen % Million yen % Yen
First half
ending
September, 2017
21,500 -11.2 200 -75.5 200 -77.9 120 -71.5 8.12
Entire – year 50,000 6.4 1,000 1,000 600 40.59
(Note) Revision of the most recently released performance forecasts: No

 

Qualitative Information Regarding the Consolidated Results for the First Quarter

Explanation of Operating Results

The Japanese economy continues to remain uncertain during this consolidated first fiscal quarter. This was due mainly to a slowdown of the economy of China and other emerging countries, as well as concerns on adverse impact of the UK exiting the EU on the world economy.

In the pachinko industry, in which the Daikoku Denki Group (“the Group”) is engaged, the environment surrounding these businesses also remained challenging. The number of newly opened pachinko halls and renovation of existing halls declined. Pachinko halls restricted themselves from renewal of game machines in the wake of the 42nd G7 Summit. They also took a negative stance toward capital investment before removal/callback of the “pachinko machines where performance may differ from that of inspected units.”

Under such circumstance, the Information System Segment held “MIRAIGATE2016” exhibition & seminars in major cities across the country and recommended solutions to improve business. This event recorded a record-high number of visitors involved in the pachinko hall business. Subjects of the seminars included the measures against challenges that the industry would face, such as internal regulation updates and machine removal/callback. These seminars were highly acclaimed by event visitors.

Collection and sale of pachinko game machine are being carried out under an uncertain market environment. In order to implement a more flexible approach to this situation, the Control System Segment addressed efforts to reinforce its ability to collect information as well as steps that can be taken to upgrade parts procurement and the production process.

As a result, for this consolidated first fiscal quarter, sales volume amounted to 11,087 million yen (down 4.4% from the same period last year), operating income was 1,337 million yen (up 119.5% from the same period last year), and ordinary income was 1,399 million yen (up 111.1% from the same period last year). Net income for the quarter attributable to shareholders of the parent company amounted to 908 million yen (up 163.9% from the same period last year). Results of each segment were as follows:

[Information System Segment]

During the first consolidated quarter, this segment officially released a new data display terminal, “REVOLA.” Its beautiful stylish shape was highly regarded and sales had an encouraging start. However, results did not reach the same level as the previous year due to the difficult market conditions that resulted in a decline in newly built and renovated pachinko halls.

This segment resulted in increased profits as sales administrative expenses, such as R&D costs, were carried over to the second quarter.

As a result, net sales in this segment were 7,185 million yen (down 8.8% from the same period last year) and segment income was 1,120 million yen (up 42.0% from the same period last year).

[Control System Segment]

During the first consolidated quarter, the sale of the pachinko display units and parts fell below the same period last year. This was due to a decrease in number of machine models and sales volume.

The segment released a pachislot game machine, “Detective Opera Milky Holmes TD (Tantei Kageki Milky Holmes TD)”. Our record-high 8,800 units were successfully brought to the market.

As a result, net sales in this segment were 3,922 million yen (up 5.4% from the same period last year) and segment income was 672 million yen (up 166.4% from the same period last year).

(Note) Above figures for each segment include the amounts of inter-segment transactions.

Explanation of Financial Position

Total assets at the end of this first consolidated fiscal quarter were 46,454 million yen, a decrease of 685 million yen from the end of the previous consolidated fiscal year. One of the main factors for this was a decrease in accounts receivable and products, despite an increase in cash and deposits.

Total liabilities at the end of this first consolidated fiscal quarter amounted to 16,819 million yen, a decrease of 1,029 million yen. The main factor for this includes a decrease in amount payable for R&D costs and software license acquisition from the amount at the end of the previous fiscal year.

Net assets at the end of this first consolidated fiscal quarter were 29,635 million yen, an increase of 343 million yen from the end of the previous consolidated fiscal year. The main factors for this include increased retained earnings. The allocated net profit for the quarter attributable to shareholders of the parent company was larger than the amount of paid dividends. Consequently, the Group’s equity ratio was 63.8% (a rise of 1.7 points when compared to that at the end of the previous consolidated fiscal year).

Explanation of Earnings Forecast

The results of this consolidated first fiscal quarter roughly met our initial expectations. As mentioned in the “Explanation of Operating Results” section, sales administrative expenses, including R&D costs, were carried over to the second quarter. Consequently, earnings forecast for the second quarter as well as the full year of the fiscal year ending March 2017 remains the same as the forecast announced on May 13, 2016.