GGRAsia – Konami annual profit down 42pct as revenue flat

Konami annual profit down 42pct as revenue flat

May 14, 2020 Newsdesk Industry Talk, Latest News, Top of the deck

Japanese conglomerate Konami Corp posted a net profit of nearly JPY19.89 billion (US$186.2 million) for the 12 months ended March 31, 2020, down 41.8 percent from the previous year. That was on revenue of JPY262.81 billion for the period, flat compared with the previous year, according to a Thursday press release.

Group-wide operating profit for the period was JPY31.0 billion, down 38.6 percent year-on-year. The company said operating profit decreased “due to temporary expenses” related to a building the group occupied previously. “The worldwide spread of Covid-19 also affected our product and service supply for the fiscal year ended March 31, 2020,” it added.

The group’s gaming and systems division – which includes supply of casino equipment – reported net revenue of approximately JPY28.4 billion for the fiscal year ended March 31, down 8.9 percent in comparison with the previous year. Segment profit declined by 62.3 percent year-on-year to JPY1.8 billion, the group said in its release. The segment had a profit margin of 6 percent, down from 15 percent in the previous year.

Sales of the KX 43 upright cabinet for slot games “continued to perform strongly,” it said. “In addition, the sales of [cabinets] in the Concerto series … were mainly enhanced in the North American market as well as the Oceania, South America and Europe markets,” added the company.

Konami said that during the reporting period the performance of the gaming and systems division “was affected by increased operating expenses due to advance investments for the expansion” of the firm’s line-up, as well as delays in delivery of products and services in the group’s supply chain and the temporary closure of casinos around the world triggered by the spread of Covid-19.

In the gaming segment, Konami operates outside Japan via Konami Australia Pty Ltd and U.S.-based Konami Gaming Inc. The Japanese conglomerate is also involved in the Japan-focused pachinko games segment, digital entertainment – including video games and mobile games – and sports.

In its Thursday release, Konami said it could not forecast its earnings and dividend for the fiscal year ending March 31, 2021.

“With respect to the outlook, there are concerns over a global recession triggered by measures taken to avoid the spread of the coronavirus outbreak,” said Konami, adding that a stagnation of business would affect the group’s earnings performance.

“Under the current circumstances where visibility is low on when the outbreak will be under control and consumer spending will recover, it is difficult to reasonably calculate its impact on our guidance,” stated the company.

A dividend of JPY7.00 per share was declared as a year-end dividend for the 12 months to March 31. Including the previously-announced interim dividend, the company paid a total annual dividend of JPY45.0 per share, down 81.0 percent from the previous fiscal year.