Sega Sammy Holdings Consolidated Financial Statements: 6 Months Ended September 30, 2014

Key insights

7 takeaways

01
Sega Sammy Holdings reported a net loss of 2,079 million yen for the six months ended September 30, 2014, a significant reversal from the 11,348 million yen net income recorded in the same period the previous year.See it on page 7
02
Operating income plummeted 72.2% to 3,452 million yen, largely due to a 2,778 million yen provision for dismantling fixed assets at the Phoenix Seagaia Resort.See it on page 3
03
The Pachislot and Pachinko segment, a core revenue driver, saw net sales decline by 14.9% to 60,727 million yen, with operating income dropping 51.3% as pachislot sales underperformed.See it on page 3
04
The Consumer Business segment grew net sales by 10.3% to 48,631 million yen, driven by strong packaged software and digital game performance, though operating income was suppressed by increased advertising costs.See it on page 4
05
Total net sales for the company fell 4.9% to 154,245 million yen compared to the prior year period.See it on page 3
06
Amusement Center Operations reported an operating loss of 224 million yen, attributed to the impact of a consumption tax increase and a lack of major market-driving titles.See it on page 3
07
The company maintains a stable financial position with an equity ratio of 61.5% and total assets of 551,204 million yen.See it on page 1

Summary

Sega Sammy Holdings experienced a challenging financial period for the six months ended September 30, 2014, characterized by declining revenues and a shift to a net loss. The company reported net sales of 154,245 million yen, representing a 4.9% decrease compared to the same period in the previous fiscal year. Operating income fell significantly by 72.2% to 3,452 million yen. Ultimately, the company recorded a net loss of 2,079 million yen, a sharp reversal from the 11,348 million yen net income reported in the prior year. This downturn was primarily driven by a 2,778 million yen provision for the dismantling of fixed assets at the Phoenix Seagaia Resort.

Performance across business segments was mixed. The Pachislot and Pachinko segment, a core revenue driver, saw net sales drop 14.9% to 60,727 million yen, with operating income falling 51.3%. While pachinko machine sales grew to 86,000 units, pachislot sales underperformed. The Consumer Business segment achieved a 10.3% increase in net sales to 48,631 million yen, bolstered by strong packaged software sales and solid digital game performance, though operating income declined due to higher advertising expenditures. Meanwhile, the Amusement Center Operations segment reported an operating loss of 224 million yen, impacted by a consumption tax increase and a lack of major market-driving titles.

The company maintains a stable financial position with an equity ratio of 61.5% and total assets of 551,204 million yen. During this period, accounting policies regarding retirement benefits were updated to align with new standards, shifting to a benefit formula basis for attributing expected benefits. Looking ahead, the company has adjusted its full-year forecast for the fiscal year ending March 31, 2015, reflecting the difficult market conditions and the ongoing need for structural reforms to revitalize its product offerings.