Konami Holdings Corp’s gaming and systems division reported revenue of JPY34.3 billion (US$315.3 million) for the 12 months ended March 31, 2016, up by 1.4 percent in comparison with the previous year. Consolidated operating income for the segment however fell 12.2 percent year-on-year to JPY5.6 billion, the Japanese conglomerate said last week.
The company said operating expenses in its gaming and systems division increased mainly due to more investment spending. It included “increases in product approval fees and product development costs resulting from expansion of the product line-up in the North American and Australian markets,” the firm said.
Income in the segment decreased given the “slow growth in earnings in the harsh market condition by intensified competition and stalled North American market,” it added. The company said the North American market was affected by the entry of new manufacturers, the integration of major manufacturers and “increasingly prudent investments” by casino operators.
In the gaming segment, Konami operates outside Japan via Konami Australia Pty Ltd and U.S.-based Konami Gaming Inc. Konami said it had strong sales of the new Concerto cabinet launched in the last quarter of 2015 in North America.
The company initiated sales of the new Concerto cabinet in Asia and Oceania in the first quarter of 2016, and said that it also continued to “roll out a richly diverse product line-up, including ‘Podium Stack’ of the Podium series”.
Group wide, Konami reported revenue of JPY249.9 billion for the fiscal year ended March 31, up by 14.6 percent from the previous year. Group operating profit jumped 61.2 percent year-on-year to JPY24.7 billion, while group net profit grew by 6 percent year-on-year to JPY10.5 billion.
Besides casino slot gaming, the Japanese conglomerate is also involved in the Japan-focused pachinko game segment; in digital entertainment – including video games and mobile games; and health and fitness.
A dividend of JPY12.50 per share was approved as a year-end dividend for the 12 months to March 31. Including the interim dividend of JPY10.50 per share, the company paid an annual dividend of JPY23 per share, worth an aggregate of JPY3.1 billion.
Konami said it expects to record a net profit of JPY15.0 billion for the fiscal year ending March 31, 2017, and to pay an annual dividend of JPY34 per share.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia