Business Operations - The company operates the largest network of Japanese-style pachinko parlors, with a total of 449 locations as of September 2019[13]. - The core business includes two types of gaming machines: Japanese-style pachinko and Japanese-style slot machines, with betting amounts typically ranging from 0.5 to 4 yen per pachinko ball and 5 to 20 yen per gaming coin[13]. - The company offers approximately 1,000 different types of prizes, including everyday items and special prizes, and continuously introduces new products to enhance customer service[14]. - As of September 30, 2019, the company operated a total of 449 gaming halls, with 177 high-stakes and 272 low-stakes halls, where low-stakes halls accounted for 60% of the total[27]. - The proportion of low-stakes gaming machines in the company's total gaming machines increased from 47.4% to 72.4% as of June 30, 2019, indicating a strategic shift towards low-stakes gaming[31]. - The company plans to continue expanding low-stakes gaming to reshape Japanese pachinko into a truly popular entertainment option for the masses[31]. Financial Performance - The EBITDA for the six months ended September 30, 2019, was 19,638 million JPY (1,426 million HKD), compared to 18,049 million JPY (1,242 million HKD) for the same period in the previous year, reflecting a year-on-year increase[21]. - The net profit for the six months ended September 30, 2019, was 8,696 million JPY (631 million HKD), an increase from 8,325 million JPY (573 million HKD) in the previous year[21]. - Total revenue for the group reached ¥73,970 million, reflecting a slight increase of 0.5% year-over-year[43]. - Operating profit for the same period was ¥14,042 million, up 14.4% from ¥12,268 million year-on-year[94]. - The company reported revenue of ¥73,970 million for the six months ended September 30, 2019, an increase of 0.5% compared to ¥73,583 million for the same period in 2018[94]. - Basic earnings per share for the period was ¥11.35, compared to ¥10.89 for the same period last year, reflecting a 4.2% increase[94]. Aircraft Leasing Segment - The company aims to leverage strong cash flow from its Japanese pachinko business to drive stable growth in its aircraft leasing segment[16]. - The company has registered a subsidiary, Dynam Aviation Ireland Limited, in December 2018 to engage in aircraft leasing activities, benefiting from favorable political measures in Ireland[17][18]. - According to Boeing's Current Market Outlook, the global fleet size is expected to double from 25,830 aircraft to 50,660 by 2038, indicating a promising outlook for the aircraft leasing business over the next 20 years[16]. - The company acquired an aircraft valued at ¥4,632 million (approximately HK$336 million) to expand its aircraft leasing business during the six months ended September 30, 2019[65]. Cash Flow and Liquidity - Operating cash flow for the six months ended September 30, 2019, was ¥17,458 million (approximately HK$1,267 million), an increase from ¥15,856 million (approximately HK$1,091 million) for the same period in 2018[58]. - Net cash used in investing activities for the six months ended September 30, 2019, was ¥8,430 million (approximately HK$612 million), compared to ¥3,461 million (approximately HK$238 million) in 2018[59]. - The company’s cash and cash equivalents increased by ¥603 million (approximately HK$44 million) during the six months ended September 30, 2019, resulting in a total of ¥48,140 million (approximately HK$3,496 million) at the end of the period[56]. - Current assets as of September 30, 2019, totaled ¥61,441 million (approximately HK$4,462 million), while current liabilities were ¥46,837 million (approximately HK$3,401 million), resulting in a net current asset value of ¥14,604 million (approximately HK$1,061 million)[62]. - The current ratio as of September 30, 2019, was 1.3, down from 1.6 as of March 31, 2019[63]. Operational Efficiency - The group aims to standardize the layout and number of gaming machines in new pachinko halls to reduce initial investment costs and construction time[38]. - The implementation of a centralized management system for gaming machines through 16 distribution centers across Japan helps streamline operations and reduce costs[40]. - The group focuses on low-cost operations, with approximately 60% of operating expenses attributed to gaming machines and labor costs[39]. - The company is focusing on enhancing its operational efficiency and exploring potential mergers and acquisitions[99]. Financial Risk Management - The company’s financial risk management focuses on minimizing potential adverse impacts on financial performance due to market unpredictability, including foreign currency, price, and interest rate risks[70][71]. - The company has implemented policies to ensure sales are made to customers with appropriate credit records, significantly reducing credit risk[72]. - The company’s liquidity policy includes regular monitoring of current and expected cash flow needs to maintain sufficient cash reserves and access to committed financing[73]. Corporate Governance - The company has complied with all applicable corporate governance code provisions, except for the dual role of Sato Kohei as both Chairman and CEO[81]. - The company plans to hold its Annual General Meeting by June 30, 2019, in compliance with corporate law[83]. - The company requires additional time to finalize the annual report to be sent along with the AGM notice[83]. Accounting Policies - The company adopted IFRS 16 "Leases," which introduces a single lease accounting model for lessees, requiring recognition of right-of-use assets and lease liabilities for all leases longer than 12 months, unless not significant[105]. - The transition to IFRS 16 was applied retrospectively, treating the new regulations as if they had always been in effect[108]. - The company evaluated the impairment of right-of-use assets as of the initial application date, ensuring compliance with IAS 36 "Impairment of Assets"[108]. Employee Information - As of September 30, 2019, the group employed 17,779 staff, contributing to the creation of approximately 250,000 jobs in the Japanese pachinko industry[33]. - As of September 30, 2019, the company had approximately 17,779 employees, a slight decrease from 18,023 employees as of March 31, 2019[65]. - The total employee compensation for the six months ended September 30, 2019, was ¥26,138 million (approximately HK$1,898 million)[65].
DYNAM JAPAN(06889) - 2020 - 中期财报