Overview of financial results for FY2019

Net sales decreased to ¥27,112 million (down 6.8% year on year) as a result of a fall of 0.65 million in the number of smartphone-based paying subscribers from September 30, 2018, to 3.92 million as of September 30, 2019, and a decline of 0.81 million in the total number of paying subscribers to 4.79 million. Gross profit declined to ¥19,955 million (down 12.0% year on year), mostly reflecting the decrease in net sales.

Operating income fell to ¥2,959 million (down 8.0% year on year), chiefly due to the decrease in gross profit despite a decrease of 16,996 million yen (down 12.6%) in selling, general, and administrative expenses based on a reduction in advertising expenses achieved by prioritizing the efficiency of acquiring paying subscribers on smartphones in mobile phone stores, a fall in depreciation, and other factors.

While operating income fell, ordinary income rose to ¥3,134 million (up 0.6% year on year), which was chiefly attributable to a share of the profit of entities accounted for using the equity method due to a gain on bargain purchases associated with the acquisition of shares in Shobunsha Publications, Inc., which has become an equity method affiliate, despite the one-time amortization of goodwill due to the book value depreciation after making MNES Inc. an equity method company.

Profit attributable to owners of parent stood at ¥1,508 million (down 7.4% year on year), reflecting the absence of a decrease in tax expenses due to an absorption-type merger of a consolidated subsidiary that existed in the previous fiscal year and the posting of extraordinary losses such as a loss on valuation of investment securities, a loss on the sale of shares of an affiliate, and an impairment loss on intangible assets (mainly software).

Consolidated statements of income
(Millions of yen)
2015/9 2016/9 2017/9 2018/9 2019/9
Net sales 33,461 32,844 30,933 29,075 27,112
Operating income 4,245 5,355 4,053 3,218 2,959
Operating income ratio (%) 12.7 16.3 13.1 11.1 10.9
Ordinary income 4,144 5,310 3,972 3,116 3,134
Ordinary income ratio (%) 12.4 16.2 12.8 10.7 11.6
Profit attributable to owners of parent 2,607 3,317 1,434 1,629 1,508
Profit attributable to owners of parent ratio(%) 7.8 10.1 4.6 5.6 5.6