(From April 1, 2021 to September 30, 2021 / Date of Issue: Dec. 1, 2021)

The Group achieved robust performance in the second quarter of the fiscal year ending March 31, 2022, centered on the Consumer and Amusement Machine Sales areas of the Entertainment Contents Business. Structural reforms carried out in the previous fiscal year steadily bore fruit, and we were able to pare down fixed costs, chiefly in the Pachislot and Pachinko Machines Business. They resulted in a swift recovery in performance from the same period of the previous year, which was hard hit by the COVID-19 pandemic and we recorded sales of ¥134.8 billion (up 22% year on year), operating income of ¥14.6 billion (versus an operating loss of ¥3.0 billion a year earlier), ordinary income of ¥14.7 billion (versus an ordinary loss of ¥3.5 billion), and quarterly profit attributable to owners of parent of ¥12.0 billion (versus a ¥21.7 billion loss).

In tandem with second quarter results, we announced a revision to our full-year forecast for operating results. Sales are expected to fall below the full-year forecast announced in May 2021, mainly due to difficulties in supplying the number of machines initially projected in the Pachislot and Pachinko Machines Business under the impact of global shortages in the supply of components. At the same time, anticipating continued brisk performance in the Entertainment Contents Business, mainly in the Consumer area, we revised the forecasts upward for operating income, ordinary income, and profit attributable to owners of parent from May 2021 forecast.

In addition, as we announced on September 10, 2021, since Yokohama city called off public solicitation for its planned specified integrated resort (IR) facilities project, we had no choice but to drop our plans to participate in an IR project there. Despite this setback, we will continue to identify opportunities for proactive growth investments in a wide range of areas to realize growth for the Group over the longer term. However, for the time being, to optimize the capital structure, we decided to buy back treasury stocks using part of our surplus capital.

Going forward, we will continue to grow the Entertainment Contents Business, while working to navigate the headwinds caused by external factors such as the global components supply shortage and the lingering impact of COVID-19 as we push forward to achieve the goals set out in the medium-term plan. At the same time, we will invest in growth from a longer-term perspective to realize the enhancement of corporate value. I would like to ask our stakeholders for your continued support.

In the Pachislot and Pachinko Machines Business, the forecast for unit sales of machines was revised downward in light of mounting global procurement risks for semiconductors and other components. Meanwhile, performance in the Entertainment Contents Business as a whole is favorable, with particularly brisk sales of both new game titles and repeat sales in the Consumer area and plans to record royalty income. Consequently, operating income, ordinary income, and profit attributable to owners of parent are expected to exceed previous forecasts.