Top Management Interview

December 2019,
Taro Hashimoto, CEO

Financial results for the first half of FY2019

While revenue was on par with the same period of the previous fiscal year, income grew steadily. Looking by segment, the “Content” has been driving profit from the previous year with the record highest number of students enrolled in the Renaissance High School Group. Our digital media service also turned profitable thanks to increased advertising revenue from the entertainment news website “Crank-In!” and “Crank-In! Trend,” as well as steady growth in revenue from the video distribution service “Crank-In! Video.” The “Broadcast” segment posted higher income due to the progress in management reform, and the “Technology” segment was favorable as with the previous year. In addition to CDN service, our new solutions and services are so well received that they boosted profit.

Ordinary income increased as a result of higher operating income. Net income also rose owing mainly to the refunds for taxes as well as the posting of settlement proceeds received from a lawsuit we filed for damages.

Full-year financial results forecast was revised upward

Results in the first half were favorable exceeding our projection. As we expect income in the second half to be flat year on year, operating income was revised upward to 450 million yen, an increase by 100 million yen from the previous forecast. Ordinary income and net income were also revised upward, in line with the latest upward revision of operating income, following the first upward revisions made on September 30.

Full-year financial results forecast was revised upward

Primary objective of Group consolidation

We had announced a plan to merge our six wholly-owned subsidiaries, and recently decided to merge them into the Company on April 1, 2020. Up to the present, each subsidiary has developed its own unique businesses, but from now on, we will remove barriers between organizations, fuse different businesses together and accelerate innovations, so as to create new businesses.

Upon this merger, we are considering changes in organizational structure and business segments. Having more opportunities for personnel exchange and cross-sectoral dialogues, we intend to foster human resources who will act as bridges between different businesses. We will build a proactive management structure capable of promoting operations that go beyond the existing boundaries.

In recent years, initiatives on Environmental, Social and Governance (ESG) and Sustainable Development Goals (SDGs) have been spreading widely. We will incorporate them into the management strategies going forward to achieve the Company’s sustainable growth.

Primary objective of Group consolidation

Response to the 5G environment

The year 2020 will see the full-scale launch of 5G service in Japan. Leveraging the advantage of providing cloud gaming service to network operators, the Company is laying groundwork for the 5G environment. We expect that 5G will bring significant progress in the cooperation between two different business segments, eSports and cloud gaming.

To our shareholders

Although results are steadily recovering, we sincerely regret that we did not pay an interim dividend for FY2019 as retained earnings are negative at present. At the same time, we also do not plan to pay year-end dividend. Giving priority to earning solid profit, we will strive to provide returns to shareholders as soon as possible.

The Company is committed to improving its corporate value by pursuing development of businesses that are exceptionally unique. I would be most grateful to our shareholders for their continuing support.