News Releases

Consolidated Financial Results for the 3rd Quarter of the FY2018

(Rounded down to the nearest million)

Business results for the third quarter of the year ending March 31, 2019

Operating results

(Percentage figures denote year-over-year changes.)
  Net
sales
Operating
income
Ordinary
income
Net income
attributable to
equities of parent
Million yen % Million yen % Million yen % Million yen %
Third quarter, year
ending March 31, 2019
24,795 -11.4 1,841 27.2 2,016 25.6 1,342 40.1
Third quarter, year
ending March 31, 2018
27,984 -16.2 1,448 -17.3 1,605 -15.0 958 -21.2

(Note) Comprehensive income
Third quarter of the year ended March 31, 2019: ¥1,316 million (31.5%)
Third quarter of the year ended March 31, 2018: ¥1,001 million (-21.4%)

  Net income per share Diluted net income per share
Yen Yen
Third quarter, year
ending March 31, 2019
90.80
Third quarter, year
ending March 31, 2018
64.83

Financial position

  Total assets Net assets Shareholders’ equity ratio
Million yen Million yen %
Third quarter, year
ending March 31, 2019
43,117 29,976 69.5
Year ended March 31, 2018 43,564 29,251 67.1

(Reference) Shareholders’ equity
Third quarter of the year ended March 31, 2019: ¥29,976 million
Year ended March 31, 2018: ¥29,251 million

Dividends

  Annual dividends(Yen)
First
quarter-end
Second
quarter-end
Third
quarter-end
Year-end Annual
Year ended March 31, 2018 10.00 30.00 40.00
Year ended March 31, 2019 10.00    
Year ended March 31, 2019
(Forecast)
      30.00 40.00
(Note) Revision of the most recently released dividend forecasts: No

 

Forecast earnings for the year ending March 31, 2019

  Net sales Operating
income
Ordinary
income
Net income
attributable to
owners of parent
Net income
per share
Million yen % Million yen % Million yen % Million yen % Yen
Entire – year 35,000 2.7 1,300 9.0 1,400 0.7 800 1.9 54.12
(Note) Revision of the most recently released performance forecasts: No

 

 

Qualitative Information Regarding the Consolidated Results

1. Analytical Review of Operating Results

The Japanese economy remained on the track of moderate recovery during this third consolidated fiscal quarter, with continuing improvement in corporate earnings, and employment and income environments.

On the other hand, the economic outlook still continues to be uncertain due to the impact of trade issues on the global economy, and concerns about the effect of volatility in financial and capital markets, etc.

In the pachinko industry, in which the Daikoku Denki Group (“the Group”) is engaged, various game machine manufacturers have released into the market pachislot machine #6 and game machines under the new regulations such as “pachinko machines with fixed settings” that comply with the “Regulations on the Partial Revision of Regulations Regarding the Enforcement of the Act on Control and Improvement of Amusement Business, etc.” and “Regulations Regarding the Certification of Game Machines and Examination of Model” (hereinafter referred to as “new regulations”) that was enforced on February 1, 2018, and their market evaluation is attracting attention. However, since the number of units sold and the number of models are limited, game machines made under the old regulations are still the main operation force in pachinko halls.

While a pressing task is to respond to the “Revised Health Promotion Act to strengthen passive smoking prevention measures“ (to be fully enforced on April 1, 2020), the installation of a dedicated smoking room, etc. in a pachinko hall is being considered.

In this market environment, the Information System Segment continued to seek to expand sales of information publication devices including “BiGMO PREMIUM II” equipped with data display, and various content corresponding to “pachinko machines with fixed settings.” With respect to the CR unit, they worked to make a proposal for customer analysis by the fan trend data publication service “Fan-SIS,” and of a new function with strengthened security functions by ”VEGASIA III.”

The Control System Segment conducted a performance analysis of “pachinko machines with fixed settings” and promoted proposal activities for attractive gaming features suitable for the market after revision of the regulations.

They also worked on a project proposal for a pachinko game machine that is equipped with a gimmick characterized by its gaming features through the movement of balls, which is increasing in the market.

As a result, for this third consolidated fiscal quarter, net sales amounted to 24,795 million yen (down 11.4% from the same period last year), operating income was 1,841 million yen (up 27.2% from the same period last year), and ordinary income was 2,016 million yen (up 25.6% from the same period last year), and quarterly net income attributable to parent company shareholders amounted to 1,342 million yen (up 40.1% from the same period last year).

Business results by segment

Information System Segment

For the third consolidated fiscal quarter of this segment, sales of the information publication terminal “BiGMO PREMIUM II,” whose introduction to leading companies is proceeding, and sales of hall computers exceeded levels in the same period last year. Sales of CR units also remained robust because a proposal for the new function gained a good reputation. However, since the severe market environment continued, with significantly decreased new parlor openings and large-scale renovations, sales of other main products fell below levels in the same period last year.

Amid a serious manpower shortage in pachinko halls, the demand for an individual counting system, which is an optional feature of the CR unit, is growing.

In terms of profits, segment income exceeded the level in the same period last year due to a decrease in R&D cost.

As a result, net sales in this segment were 19,810 million yen (down 2.8% from the same period last year) and segment income was 2,787 million yen (up 17.5% from the same period last year).

Control System Segment

Display units for pachinko machines continued to sell well during the consolidated third fiscal quarter in this segment and exceeded the level in the same period last year. However, sales of control units and their components fell below levels in the same period last year because of game machine manufacturers’ review of sales plans due to the revised regulations, and the impact of the reuse rate increase, etc.

As for pachislot game machines, approximately 5,500 units were brought to the market in the same period last year, but there were no sales during this third consolidated fiscal quarter.

As a result, net sales in this segment were 5,024 million yen (down 34.4% from the same period last year), and segment income was 332 million yen (down 3.0% from the same period last year).

(Note) Business segment sales and income figures include intersegment transactions.

2. Analytical Review of Financial Position

Total assets at the end of this third consolidated fiscal quarter were 43,117 million yen, a decrease of 446 million yen from the end of the previous consolidated fiscal year. The main factors for this were a large decrease in cash and deposits and inventories, although trade notes and accounts receivable increased due to higher net sales during this third consolidated fiscal quarter compared to the previous fourth consolidated fiscal quarter, and software increased due to the construction of an in-house system.

Total liabilities as of the end of this third consolidated fiscal quarter were 13,140 million yen, a decrease of 1,171 million yen from those at the end of the previous consolidated fiscal year, due to a decrease in advances received that are included in electronically recorded obligations and current liabilities-other, although income taxes payable, etc. increased.

Net assets at the end of this third consolidated fiscal quarter were 29,976 million yen, an increase of 724 million yen from the end of the previous consolidated fiscal year, due to an increase in retained earnings resulting from the fact that the recorded amount of quarterly net income attributable to parent company shareholders exceeded the dividend payment. The equity ratio was 69.5% (up 2.4 points when compared to that at the end of the previous consolidated fiscal year).

3. Explanation of Earnings Forecast such as Consolidated Business Results Forecast

There are no changes in the consolidated business performance forecasts for the full fiscal year ending March 2019, announced last time, since progress has been made almost as planned.

The Group will immediately disclose if the forecast must be revised.