Nippon Ichi Software Q2 2015 Financial Results

Key insights

6 takeaways

01
Nippon Ichi Software reported a net loss of 19.8 million yen for the six months ending September 30, 2015, a sharp decline from the 79.6 million yen profit recorded during the same period in 2014.See it on page 4
02
Net sales for the first half of the fiscal year fell 28.6% year-over-year to 1.47 billion yen, while operating profit dropped 47.5% to 86.5 million yen.See it on page 13
03
The package software segment, which released nine titles, generated 979.4 million yen in sales and 40.2 million yen in operating profit.See it on page 4
04
The online services segment proved to be the most profitable division, contributing 395.6 million yen in sales and 185.3 million yen in operating profit.See it on page 18
05
Cash and cash equivalents decreased significantly to 577.9 million yen, primarily due to inventory accumulation and outflows from investment activities.See it on page 5
06
Total assets reached 3.31 billion yen as of September 30, 2015, bolstered by an increase in investment securities despite the overall downturn in operational performance.See it on page 11

Summary

Nippon Ichi Software’s financial results for the second quarter of the fiscal year ending March 31, 2016, reflect a period of contraction in both revenue and profitability. For the six-month period ending September 30, 2015, the company reported net sales of 1.47 billion yen, representing a 28.6% decrease compared to the same period in the previous year. Operating profit fell by 47.5% to 86.5 million yen, and the company recorded a net loss attributable to owners of the parent of 19.8 million yen, a significant downturn from the 79.6 million yen profit reported in the prior year’s second quarter.

The company’s performance was driven by its four primary business segments: package software, online services, licensing, and other operations. The package software segment, which released nine titles across domestic and international markets, generated 979.4 million yen in sales and 40.2 million yen in operating profit. The online segment contributed 395.6 million yen in sales with an operating profit of 185.3 million yen, while the licensing segment saw 32.4 million yen in sales. The "other" segment, encompassing contract development and retail operations, reported a minor operating loss of 4.2 million yen.

Financially, the company maintained a total asset base of 3.31 billion yen as of September 30, 2015, an increase from the previous fiscal year-end, largely due to growth in investment securities. However, cash and cash equivalents declined significantly to 577.9 million yen, driven by outflows related to investment activities and inventory accumulation. The company continues to operate within the Japanese consumer and online game industry, navigating a market characterized by the expansion of smartphone gaming and the anticipation of new hardware cycles. The results were reviewed by an independent auditor, confirming the financial position and performance metrics for the period.