Financial Performance - For the six months ended December 31, 2020, the company recorded a profit before tax of approximately ¥36 million, compared to a loss of approximately ¥6,767 million for the fiscal year 2020[10]. - The profit before tax for the first six months of fiscal year 2021 decreased by approximately ¥299 million, a decline of about 89.3% compared to the profit before tax of approximately ¥335 million for the same period in 2019[10]. - Total revenue decreased by approximately 31.9% from about 4,032 million yen in the first six months of FY2020 to about 2,744 million yen in FY2021[21]. - Revenue from the Japanese pachinko and pachislot business dropped by about 34.6%, from approximately 3,801 million yen in the first six months of FY2020 to about 2,485 million yen in FY2021, primarily due to a decrease in customer traffic[21]. - Profit attributable to shareholders decreased by approximately 201 million JPY or about 89.7% to approximately 23 million JPY in the first six months of FY2021 from approximately 224 million JPY in the same period of FY2020[51]. - Operating profit for the same period was ¥144 million, down 65% from ¥417 million year-on-year[108]. - Basic and diluted earnings per share for the period were ¥0.046, compared to ¥0.448 in the prior year[108]. - Other income fell by approximately ¥135 million or 47.7%, from about ¥283 million in the first six months of FY2020 to about ¥148 million in the first six months of FY2021[31]. Impact of COVID-19 - The company observed a gradual recovery in customer traffic at its 17 Japanese pachinko halls since June 2020, particularly in the Kyushu region[10]. - The overall customer traffic for the first six months of fiscal year 2021 was lower, influenced by the resurgence of COVID-19 cases[10]. - The company has been affected by government measures to control the spread of COVID-19, leading to temporary closures of entertainment facilities[9]. - The Japanese pachinko industry has been facing continuous decline, exacerbated by the COVID-19 pandemic, which has significantly impacted the operational environment[9]. - The company continues to monitor the impact of COVID-19 on its business and is adjusting its strategies accordingly[10]. - The company recognized impairment losses of approximately ¥45 million on property, plant, and equipment, and right-of-use assets as of December 31, 2020, due to unexpected increases in COVID-19 cases in Fukuoka and Tokyo[10]. - The group applied the practical expedient for all eligible rent concessions related to COVID-19, allowing for recognition without adjusting lease liabilities[140]. - The company recognized a rental concession of ¥3 million related to COVID-19, recorded as other income under variable lease payments[195]. Revenue Streams - Revenue from automatic vending machines decreased from approximately 66 million yen in the first six months of FY2020 to about 47 million yen in FY2021, attributed to reduced customer traffic[22]. - Property rental income increased from approximately 139 million yen in the first six months of FY2020 to about 175 million yen in FY2021, due to the acquisition of property in Nagasaki City[22]. - Revenue from horse boarding services rose from approximately 26 million yen in the first six months of FY2020 to about 35 million yen in FY2021, reflecting an expansion in operational scale[22]. - The company is actively seeking alternative revenue streams and expanding operations into different business areas[15]. Operational Adjustments - The company aims to navigate the challenging market conditions and is focused on improving operational performance in the coming periods[10]. - Management continues to prioritize resource allocation to restore customer traffic and comply with COVID-19 preventive measures[20]. - Total employee costs for the first six months of fiscal year 2021 reached approximately 709 million JPY, representing about 25.5% of total operating expenses, compared to 704 million JPY and 17.9% in the same period of fiscal year 2020[75]. - The company did not conduct any significant acquisitions or disposals of subsidiaries, associates, or joint ventures in the first six months of fiscal year 2021[82]. Financial Position - Total assets as of December 31, 2020, amounted to ¥23,097 million, an increase from ¥22,146 million as of June 30, 2020[111]. - Total liabilities as of December 31, 2020, amounted to ¥19,022 million, an increase of 5.1% from ¥18,090 million as of June 30, 2020[114]. - Non-current borrowings increased to ¥4,720 million from ¥3,731 million, reflecting a rise of 26.5%[114]. - Cash and cash equivalents increased to approximately 3,255 million JPY as of December 31, 2020, from approximately 1,545 million JPY as of June 30, 2020[57]. - The debt-to-equity ratio was approximately 76.8% as of December 31, 2020, a decrease of 1.6% from approximately 78.4% as of June 30, 2020, mainly due to the repayment of existing lease liabilities[63]. - The company’s retained earnings decreased to ¥(3,480) million as of December 31, 2020, from ¥(3,506) million as of June 30, 2020[122]. Capital Expenditures - Capital expenditures for the first six months of FY2021 were approximately 39 million JPY, a decrease from approximately 90 million JPY in the same period of FY2020, attributed to cost-saving measures due to the COVID-19 pandemic[67]. - The company reported a total capital expenditure of ¥39 million for the six months ended December 31, 2020, compared to ¥90 million for the same period in 2019, showing a reduction of about 56.7%[162]. - Capital expenditures for property, plant, and equipment were approximately ¥22 million, a decrease of 72.8% from ¥81 million in 2019[184]. Governance and Compliance - The company has maintained compliance with the corporate governance code as applicable during the first six months of fiscal year 2021, with a noted deviation regarding the roles of the chairman and CEO being held by the same individual[94]. - The financial data presented is unaudited and was approved by the board of directors on February 25, 2021[132]. - The company did not recommend any dividend for the first six months of the fiscal year 2021[101]. Financial Risks - The group’s business faces various financial risks, including market risk, credit risk, and liquidity risk[145]. - The group’s financial risk management policies have not changed since the year-end[146]. - The group’s management made significant judgments and estimates in applying accounting policies, which may differ from actual results[144].
OKURA HOLDINGS(01655) - 2021 - 中期财报