For details, please refer to "Summary of Financial Information and Consolidated Business Results for the Nine Months Ended December 31, 2018"
|(Unit: Millions of yen)||Nine Months Ended
December 31, 2017
|Nine Months Ended
December 31, 2018
|YoY Change %|
|Profit attributable to owners of parent||(4,133)||(14)||-|
|(Unit: Millions of yen)||Year ended March 31, 2018||Nine months ended
December 31, 2018
|Total current assets||42,175||47,039||4,863|
|Total non-current assets||30,160||19,337||(10,822)|
|Total current liabilities||22,480||19,014||(3,466)|
|Total non-current liabilities||14,346||12,109||(2,237)|
|Total net assets||35,509||35,253||(256)|
|Total liabilities and net assets||72,336||66,376||(5,959)|
|(Unit: Millions of yen)||Nine months ended
December 31, 2017
|Nine months ended
December 31, 2018
|Cash flows from operating activities||(2,534)||(380)||2,154|
|Cash flows from investing activities||3,349||3,855||506|
|Cash flows from financing activities||(1,004)||(814)||190|
|Effect of exchange rate change on cash and cash equivalents||0||0||0|
|Net increase (decrease) in cash and cash equivalents||(189)||2,661||2,850|
|Cash and cash equivalents at beginning of period||23,090||24,373||1,282|
|Cash and cash equivalents at end of period||22,901||27,034||4,133|
i.) Overview of operations for the nine months ended December 31, 2018 (April 1, 2018 to December 31, 2018)
In the pachinko and pachislot (hereinafter, “PS”) industry, the Amendment of the Regulation for Enforcement of the Amusement Businesses Law* (hereinafter, Amusement Business Law) was enforced on February 1, 2018. Manufacturers are working proactively to develop PS machines based on the new regulations (hereinafter, “new-regulation machines”). In pachinko halls and among PS fans, consumers are anticipating the advent of a new form of popular entertainment—pachinko games that feature a variety of game functions thanks to the introduction of new-regulation machines and that can be enjoyed with peace of mind while limiting spending to an appropriate amount.
Against this backdrop, new-regulation pachinko machines were launched in August 2018, followed by pachislot machines in October. These new-regulation machines have earned a certain level of approval, but partly because the market is currently in a transition period, the number of machines passing the model certification test has been low. Consequently, the number of machines that have been launched has fallen short of market expectations, and market penetration will take time.
During the fiscal year under review, the FIELDS CORPORATION Group is taking the initiative in promoting large-scale management reforms. We are transitioning to a management structure under which businesses are managed by four companies (each company represents one business unit). Under the new structure, we aim to leverage the individual strengths of each business unit and foster synergies among them, achieving steady profitability increases. Under the new structure, distribution of PS machines will be concentrated on the Company, acting as the PS distribution unit. This move is aimed at improving the earnings structure. At the same time, we are stepping up a host of cost-reduction measures in our effort to optimize operating expenditures.
Given the market situation, we positioned the first half of the fiscal year (April to September) as a time for the PS distribution unit, which spearheads the FIELDS CORPORATION Group, to focus mainly on remodeling PS machines to be compliant with the new regulations. The Company also focused on the sale of old-regulation and later-remodeled machines, selling a total of 43,000 units. These efforts were the main reason for the consolidated operating loss of about ¥3.9 billion in the first half of the fiscal year.
In the third quarter (October to December), sales totaled 47,000 units, as we concentrated on sales of new main-title machines, including remodeled new-regulation machines. As a result of these business activities, consolidated operating profit during the third quarter (October to December) was about ¥2.6 billion. In a return to profitability, consolidated ordinary profit amounted to about ¥2.7 billion.
Consolidated operating performance for the first nine months included net sales of ¥37,615 million (-16.9% YoY), an operating loss of ¥1,261 million (a YoY improvement of ¥2,350 million), and an ordinary loss of ¥1,314 million (a YoY improvement of ¥2,543 million). Loss attributable to owners of parent came to ¥14 million (a YoY improvement of ¥4,119 million) due to the booking of extraordinary income of ¥748 million in gain on step acquisitions in the third quarter (October to December) accompanying the consolidation of NANASHOW Corporation as a subsidiary.
ii.) Explanation of consolidated earnings forecasts
The Company made no revisions to the consolidated earnings forecasts for the fiscal year ending March 31, 2019 disclosed on May 11, 2018, when it announced "Summary of Financial Information and Business Results for the Year Ended March 31, 2018 (Consolidated)." Expected progress in the fourth quarter of the fiscal year under review (January to March 2019) is as follows.
The PS distribution unit currently sells two pachinko and two pachislot titles. We expect to begin selling one additional pachinko title and one pachislot title. Although the number of units sold will vary according to PS market trends, at present we maintain our consolidated forecasts for the full fiscal year.
*: Regulation Partially Amending the Ordinance for Enforcement of the Act on Control and Improvement of Amusement Business and the Regulations for the Verification of Licenses, Formats and Other Aspects of Pachinko and Pachislot Machines, which were enforced on February 1, 2018.