Financial Performance - For the first six months of the fiscal year 2022, the company recorded a loss before tax of approximately 362 million JPY, compared to a profit of about 36 million JPY in the same period of the previous fiscal year[11]. - The company reported a net loss attributable to shareholders of approximately 333 million JPY for the first six months of FY2022, compared to a profit of about 23 million JPY in the same period of FY2021[47]. - Operating loss for the period was ¥279 million, compared to an operating profit of ¥144 million in the previous year[110]. - The company reported a total comprehensive loss of ¥330 million for the period, reflecting a significant decline in financial performance[125]. - Basic and diluted loss per share was ¥(0.666), compared to earnings of ¥0.046 per share in the prior year[110]. Revenue and Income - Total revenue for the first six months of fiscal year 2022 was approximately 2,735 million JPY, slightly down from 2,744 million JPY in the same period of fiscal year 2021, a decrease of about 9 million JPY[22]. - Revenue from the Japanese pachinko and pachislot business accounted for approximately 90.5% of total revenue in the first six months of fiscal year 2022, compared to 90.6% in the same period of fiscal year 2021[22]. - Other income increased by approximately 67 million JPY or 45.3% from about 148 million JPY in the first six months of FY2021 to about 215 million JPY in FY2022, mainly due to increased sales of second-hand Japanese pachinko machines and related materials[29]. - Revenue from automatic vending machines in the first six months of fiscal year 2022 was approximately 44 million JPY, slightly down from 47 million JPY in the same period of fiscal year 2021[23]. - Revenue from horse boarding and employment support services in the first six months of fiscal year 2022 was approximately 34 million JPY, down from 37 million JPY in the same period of fiscal year 2021, a decrease of about 3 million JPY[25]. Operational Changes - The company closed three underperforming pachinko parlors as of August 31, 2021, to focus resources on better-performing locations, which is expected to enhance customer experience and reduce operational losses[10]. - The company closed the Nagasaki employment support center due to unsatisfactory financial performance and difficulties in attracting and retaining experienced staff[20]. - The company has 12 pachinko parlors operating under the brands "Big Apple" and "K's Plaza" across various regions in Japan[9]. - The company completed the replacement of all high-gambling content pachinko and slot machines by the end of January 2022, in compliance with the amended regulations issued by the National Police Agency[14]. Market Conditions - The company has been affected by increased competition from other forms of entertainment in Japan, leading to a continuous decline in the pachinko industry[9]. - The company noted that the attractiveness of the replaced machines is lower than that of previous models, which has contributed to a decline in customer traffic at its parlors[14]. - The company anticipates that the regulatory changes will continue to negatively impact customer traffic in the future[14]. Financial Position - As of December 31, 2021, the total borrowings amounted to approximately 5,160 million JPY, a decrease from 5,495 million JPY as of June 30, 2021, with 84.2% being bank loans[48]. - The company's cash and cash equivalents were approximately 1,607 million JPY as of December 31, 2021, down from 2,617 million JPY as of June 30, 2021[55]. - The company's total assets were approximately 19,435 million JPY as of December 31, 2021, compared to 21,324 million JPY as of June 30, 2021[56]. - The debt-to-equity ratio was approximately 80.1% as of December 31, 2021, an increase of 1.2% from 78.9% as of June 30, 2021, primarily due to a decrease in cash and cash equivalents[64]. Impairment and Losses - The company recognized impairment losses totaling approximately 557 million JPY on property, plant, and equipment, right-of-use assets, and intangible assets due to the ongoing adverse market conditions influenced by COVID-19[11]. - The company recorded impairment losses of approximately 35 million JPY, 281 million JPY, and 241 million JPY for property, plant and equipment, right-of-use assets, and intangible assets, respectively, in the first six months of FY2022[37]. - The impairment loss recognized for investment properties in the first six months of the fiscal year 2022 amounted to approximately 22 million JPY, compared to zero in the same period of fiscal year 2021[71]. Governance and Management - The company’s board believes that the current structure of having the same individual serve as both Chairman and CEO is appropriate for the continuity of business strategy and management[99]. - The company has complied with the corporate governance code as set out in the Listing Rules during the first six months of the fiscal year 2022, with some deviations noted[99]. - The company’s governance structure is regularly reviewed to ensure it meets the needs of the company and its shareholders[100]. Future Outlook - Management continues to seek new opportunities to expand into other business areas to diversify revenue streams[21]. - The company anticipates that the extended maturity dates of the bonds will continue to provide stable cash flow and income, particularly amid ongoing disruptions in the Japanese pachinko industry due to COVID-19[80].
OKURA HOLDINGS(01655) - 2022 - 中期财报