Aiming FY2019 Q2 Earnings Presentation

Key insights

6 takeaways

01
Aiming reported a net loss of 517 million yen and an operating loss of 434 million yen for FY2019 Q2 (April-June 2019), driven by declining revenue and special losses.See it on page 4
02
Revenue for Q2 was 1,362 million yen, a 25.1% decrease year-over-year and a 14.8% decline from Q1 2019, primarily due to underperforming joint titles like Logres and Gestalt Odin, and concluded contract development projects.See it on page 10
03
The company implemented a voluntary retirement program for 51 applicants, incurring an 80 million yen special loss but expecting an annual personnel cost reduction of 120 million yen.See it on page 8
04
Strategic adjustments include terminating the PC version of Logres and the service for Gestalt Odin to reduce operational overhead, alongside workforce optimization in Taiwan.See it on page 13
05
The strong performance of the PlayStation 4 version of Caravan Stories partially offset revenue declines from other titles.See it on page 6
06
Q3 is projected to continue experiencing revenue pressure and operating losses, as cost-cutting is balanced with increased promotional spending for new titles.See it on page 17

Summary

The Aiming FY2019 Q2 earnings presentation outlines the financial performance and strategic adjustments of the company for the period of April through June 2019. The primary objective is to report a quarterly net loss, driven by a decline in revenue, the absence of cost-sharing benefits from joint ventures that were present in the previous quarter, and the recognition of special losses associated with a voluntary retirement program.

Financial results for the second quarter show revenue of 1,362 million yen, representing a 25.1% decrease compared to the same period in the previous year and a 14.8% decline from the first quarter of 2019. Operating losses reached 434 million yen, while net losses totaled 517 million yen. The revenue shortfall is attributed to the underperformance of joint titles such as Logres and Gestalt Odin, alongside the conclusion of certain contract development projects. These declines were partially offset by the strong performance of the PlayStation 4 version of Caravan Stories. Operating costs increased due to the loss of joint-venture cost-sharing and the reclassification of personnel expenses from cost of sales to selling, general, and administrative expenses.

To improve long-term profitability, the company implemented a voluntary retirement program, which saw 51 applicants. While this resulted in a one-time special loss of approximately 80 million yen, the company anticipates an annual personnel cost reduction of approximately 120 million yen. Furthermore, the company is optimizing its workforce in Taiwan and has decided to terminate the PC version of Logres and the service for Gestalt Odin to reduce development and operational overhead. Looking ahead to the third quarter, the company projects continued revenue pressure due to the performance of core titles and anticipates maintaining an operating loss as it balances cost-cutting measures with increased promotional spending for new titles.