Taro Hashimoto, CEO
Financial results for FY2019
For the financial results in the fiscal year ended March 31, 2020, we recorded a large increase in income, with revenue increasing and operating income approximately tripling compared to the previous fiscal year. Ordinary income also increased, due partly to the receipt ofinsurance money. Net income rose as well, as a result of factors including the posting of refunds for local taxes for last year at Fishing Vision Co.,Ltd. as well as the posting of a part of settlement proceeds from a damage claim as extraordinary income, even though tax expenses for subsidiaries increased, resulting in increases in both revenue and income.
Objective of capital reduction, and shareholder return
We sincerely regret that we did not pay a year-end dividend for FY2019 as the earned surplus is negative. This is because we are not able to return profits due to previous losses, although financial results remain favorable. First of all, we must resolve that issue and make it possible to realize shareholder return measures, such as the allocation of future surplus and the acquisition of treasury shares, while ensuring the flexibility and agility of future capital policies. To that end, we had our shareholders resolve to approve a capital reduction without compensation at the general meeting of shareholders.
As a result of this resolution, it has become possible to reconcile the negative earned surplus amount as of March 31, 2020 (final settlement) up to the maximum by the capital reduction without compensation, and to utilize all extraordinary income of 1,700 million yen incurred in April due to a merger with six subsidiaries as a resource for future shareholder return. The total of the 1,700 million yen and retained earnings including the income (loss) for the current fiscal period, will be what is termed the “earnings available for dividends” for the current fiscal period.
Group consolidation and change of segments
The Company implemented an absorption-type merger with six subsidiaries in April this year and integrated the business segments to enhance the effectiveness of the consolidation. As a result, starting from April this year, we reorganized into four business segments—Education, Studio ＆ Content, Broadcast, and Technology—and put in place a category of Company-wide Expenses (Corporate Management Division).
We believe that consolidation means thoroughly ensuring total optimization that is greater than the sum of piece-by-piece optimization. For us, “total optimization” means engaging in business activities that are truly beneficial for people and society, in line with our mission, not simply the pursuit of profits. We hope to develop businesses that benefit people and society by instilling our mission in all our employees.
Group consolidation and changes resulting from the coronavirus pandemic
Two changes are simultaneously underway right now at the Company:“changes due to group consolidation” and “changes due to the coronavirus pandemic.” Going forward, we will pursue the benefits of consolidation, such as improving operational efficiency and implementing personnel exchange, as well as adapting to this era of life with the coronavirus.
The coronavirus pandemic has led to major changes in employee work schedules and lifestyle rhythms, and as a result, each employee has had the opportunity to reassess their work-life balance. We will actively utilize this opportunity to allow diversity in work styles and, thereby, to improve employee health and productivity at the same time.
To our shareholders
Initially, we thought that given the stable content of the financial results for FY2019, we could expect positive financial forecasts for FY2020. However, unfortunately, as it is extremely difficult to foresee how long the impact of the coronavirus will continue, the financial forecast for FY2020 is undecided at this time. The outlook remains uncertain, but amid the mid-to long-term trends, we will pursue business development not only with income targets but also with the aim of growing as a company that coexists with society.
More than ten years before the 2015 UN Summit, which issued the SDGs (Sustainable Development Goals), we launched the Renaissance High School Group based on the same idea as the SDGs of ensuring quality education for all. In addition, through the business of Fishing Vision Co., Ltd., we have promoted the targets of protecting life below water and protecting life on land for more than 20 years. The technology segment has been promoting the target of industry, innovation and infrastructure and other efforts centered on the CDN business, and our other businesses also share the SDGs philosophy and targets. We believe it is important to have a philosophy and objectives in common with the SDGs, and we also are convinced that sharing the SDGs philosophy and objectives is an essential requirement for all companies growing in the medium to long term, not only Broadmedia.
I would be most grateful to our shareholders for their continuing support.