Business Operations - As of December 31, 2019, Okura Holdings Limited operated 17 Japanese-style pachinko parlors under the brands "Big Apple," "K's Plaza," "Big Apple YOUPARK," and "Monaco" [8]. - The company operates primarily in Japan, focusing on Japanese-style pachinko and slot machine gaming businesses [117]. - The group’s management has identified three reportable segments: (i) Japanese pachinko and pachislot business; (ii) property leasing; and (iii) others [176]. Financial Performance - Total revenue for the six months ended in 2019 was approximately 4,032 million JPY, a decrease of about 3.4% from approximately 4,176 million JPY in the same period of 2018 [20]. - Revenue from the Japanese pachinko and pachislot business accounted for approximately 94.3% of total revenue in the first half of 2019, down from 95.2% in the same period of 2018 [20]. - Revenue for the six months ended December 31, 2019, was ¥4,032 million, a decrease of 3.4% from ¥4,176 million in the same period of 2018 [98]. - Revenue from external customers for the Japanese arcade business was ¥3,867 million, while property leasing generated ¥140 million, and other segments contributed ¥25 million, totaling ¥4,032 million [180]. - The profit attributable to shareholders increased from approximately 200 million JPY in the first half of 2018 to about 224 million JPY in the first half of 2019, representing a growth of approximately 12.0% [34]. - The profit for the period was ¥224 million, down from ¥200 million in the previous period, indicating a decline of 12% [180]. Expenses and Costs - The company reported an increase in expenses for Japanese-style pachinko and slot machines from 1,418 million yen in the first half of 2018 to 1,525 million yen in the first half of 2019 due to compliance with the 2018 regulations [10]. - Total operating expenses for the Japanese arcade business were ¥1,525 million, an increase from ¥1,418 million in the previous period, reflecting a rise of about 7.5% [196]. - The depreciation and amortization expenses for the period were ¥718 million, significantly higher than the ¥328 million recorded in the previous period, representing an increase of approximately 118% [196]. - The company incurred a total interest expense of ¥137 million for the six months ended December 31, 2019, compared to ¥61 million in the same period of 2018 [114]. Cash Flow and Liquidity - Cash and cash equivalents amounted to approximately 2,291 million JPY as of December 31, 2019, down from about 2,565 million JPY as of June 30, 2019 [41]. - The net cash generated from operating activities for the six months ended December 31, 2019, was ¥684 million, down from ¥1,223 million in the same period of 2018, representing a decline of approximately 44% [114]. - Cash and cash equivalents decreased by ¥274 million, ending at ¥2,291 million as of December 31, 2019, compared to ¥2,565 million at the beginning of the period [114]. Investments and Acquisitions - The company is exploring methods to diversify its revenue streams, including the acquisition of bonds totaling 1,000 million yen issued by Sinwa Co., Ltd. [13]. - Major investments included approximately 2,258 million JPY in investment properties and about 1,506 million JPY in financial assets as of December 31, 2019 [57]. - The company agreed to purchase properties in Nagasaki City for a total consideration of approximately ¥782.2 million, including consumption tax [74]. Compliance and Governance - The audit committee reviewed the unaudited interim financial information for the six months ended December 31, 2019, ensuring compliance with relevant accounting standards [87]. - The company has adopted the corporate governance code and has complied with applicable provisions during the six months, with a noted deviation regarding the roles of the Chairman and CEO being held by the same individual [84]. - The company has confirmed compliance with the standard code for securities trading by all directors during the six-month period [85]. IFRS Adoption - The company has adopted IFRS 16 "Leases" starting from July 1, 2019, which has impacted its accounting policies [133]. - The adoption of IFRS 16 resulted in the recognition of lease liabilities amounting to ¥12,819 million as of July 1, 2019, which includes ¥1,113 million in current lease liabilities and ¥11,706 million in non-current lease liabilities [139][142]. - The total right-of-use assets recognized amounted to ¥11,282 million, which includes land (¥924 million), buildings (¥9,720 million), leasehold improvements (¥299 million), equipment and tools (¥334 million), and computer software (¥5 million) [143]. Employee and Training - Total employee costs for the six months ended December 31, 2019, reached approximately ¥704 million, accounting for about 17.9% of total operating expenses [62]. - Employee training programs are organized for new hires, focusing on the operation and customer service of Japanese-style pachinko parlors [62].
OKURA HOLDINGS(01655) - 2020 - 中期财报