Nippon Ichi Software Q2 2016 Financial Results

Key insights

6 takeaways

01
Nippon Ichi Software reported a net loss of 19 million yen for the six-month period ending September 30, 2015, a sharp decline from the 79 million yen profit recorded in the same period the previous year.See it on page 4
02
Net sales fell 28.6% year-over-year to 1.467 billion yen, while operating profit dropped 47.5% to 86 million yen.See it on page 9
03
The Package segment, which released nine titles, generated 979 million yen in sales, while the Online segment remained the most profitable division with 185 million yen in operating profit.See it on page 4
04
Operating cash flow was negative at 310 million yen, driven by increases in inventory and trade receivables, and cash and deposits decreased significantly to 577 million yen.See it on page 11
05
Despite the downturn, the company maintained its full-year earnings forecast, stating that performance remains in line with initial projections.See it on page 1
06
The company expanded its international operations by establishing a new subsidiary in Vietnam.See it on page 6

Summary

Nippon Ichi Software’s financial results for the second quarter of the fiscal year ending March 2016 reflect a period of contraction across key performance metrics. Covering the six-month period from April 1, 2015, to September 30, 2015, the report details a decline in overall revenue and profitability compared to the same period in the previous year. The company reported net sales of 1.467 billion yen, representing a 28.6% decrease year-over-year, while operating profit fell by 47.5% to 86 million yen. The company ultimately recorded a quarterly net loss of 19 million yen, a significant downturn from the 79 million yen profit reported in the prior year's second quarter.

The company operates across four primary segments: Package, Online, License, and Other businesses. The Package segment, which released nine titles domestically and internationally, generated 979 million yen in sales and 40 million yen in operating profit. The Online segment contributed 395 million yen in sales with 185 million yen in operating profit, while the License business saw growth, reaching 32 million yen in sales and 25 million yen in profit. The Other segment, focused on contract development and retail operations, reported a minor operating loss of 4 million yen.

Financial stability remains intact, with total assets reaching 3.308 billion yen, an increase driven largely by growth in investment securities. However, cash and deposits decreased significantly to 577 million yen. Operating cash flow was negative at 310 million yen, primarily due to increases in inventory and trade receivables. Despite these results, the company maintained its full-year earnings forecast, citing that performance remained generally in line with initial projections. No significant changes to corporate structure were reported, though a new subsidiary was established in Vietnam to support international operations.