Consolidated Financial Results for the Three Months Ended June 30, 2023

This financial report details the consolidated results for Koei Tecmo Holdings Co., Ltd. for the first quarter of the fiscal year ending March 31, 2024, covering the period from April 1, 2023, to June 30, 2023. The findings reveal a complex fiscal performance characterized by a slight decline in top-line revenue alongside significant growth in bottom-line profitability, driven largely by non-operating activities.

Net sales for the quarter reached ¥18.3 billion, representing a 1.9% decrease compared to the same period in the previous year. Operating profit saw a more substantial decline of 35.6%, falling to ¥7.5 billion as the cost of sales nearly doubled from ¥3.3 billion to ¥6.3 billion. Despite these operational headwinds, ordinary profit surged by 61.6% to ¥14.7 billion, and profit attributable to owners of the parent rose by 56.3% to ¥10.6 billion. This discrepancy is explained by strong non-operating income, specifically a ¥4.87 billion gain on the sale of investment securities and a ¥2.84 billion gain on the valuation of derivatives.

The company’s financial position remains robust, with total assets increasing to ¥232.8 billion from ¥210.9 billion at the end of the previous fiscal year. This growth was supported by a significant rise in cash and deposits, which climbed to ¥30.5 billion. While the capital adequacy ratio dipped slightly from 67.4% to 61.7%, net assets per share increased to ¥455.43.

Looking ahead, the full-year forecast remains unchanged, with the company projecting net sales of ¥95 billion, a 21.1% increase over the prior year. While operating profit is expected to contract slightly by 4.2% for the full year, ordinary profit and net income are forecasted to remain stable. These results reflect a period of transition where investment activities and financial management have significantly bolstered the company's net earnings despite rising operational costs.