Sales / Profit and loss

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).