Gross profit for Q1 in FY22/23 was up YoY by 4.6% but still 11.3% behind 2019Q1, with expenses seeing an approximately 10% uptick compared to last financial year’s same period as well.
Overall Good Financial, Still Lagging Pre-pandemic Levels
Sega Sammy released its financial results for the first quarter of the financial year FY2022-23, which ended June 30. Reported figures look good compared to last year with total sales up to JPY66.1 billion (US$496.13 million) from JPY59.4 (US$445.76 million) – an 11.2% growth year over year (YoY) for the same period in the financial year 2021-2022, fueled mainly by growth in Entertainment Contents – up 11.18% from JPY47.4 billion (US$355.7 million) to JPY52.7 (US$395.47 million).
Another highlight is the updated Full Year Forecast (FYF) – JPY375.0 billion (US$2.81 billion), which – if it comes to fruition – would mean an almost 17.2% increase in yearly financial results, up from JPY320 billion (US$2.41 billion).
However, selling, general and administrative expenses have seen a big raise of almost 10.9% – from JPY20.2 billion (US$151.55 million) to JPY22.4 billion (US$168.06 million) compared to the same period of the financial year 2021-22, with the cost of sales for the quarter clocked in at JPY40.93 billion (US$307.02 million), up 7.6% from the same period in 2019 and up 15.7% YoY.
The reported losses of JPY149 million (US$1.12 million) left pre-tax income sitting at JPY4.10 billion (US$30.76 million). The total profit for the reported quarter was JPY3.16 billion (US$23.71 million) – up 7.5% compared to the same period in the previous year and a whopping 75.8% growth compared to the figures for the same period in 2019.
On the whole, as a result of all this, the operating income for the reported Q2 was JPY2.7 billion (US$20.25 million), compared to JPY3.8 billion (US$ 28.50 million) for the same period in the financial year 2021-22, a decrease of 28.9%, indicating that catching up to pre-pandemic levels is still in the future.
A Path Forward for Company Finances
Just a month ago we saw the announcement of the company’s Genesis Crest 43 J Cabinet. Managing director Masahiro Kurosaki says the company has “spent the past few years developing and planning the best hardware and software combination and the result is what I believe is our strongest cabinet offering to date” while commenting on the machine.
According to the announcement, the new gaming device will not only meet industry standards but also push the envelope thanks to its improved performance and serviceability, along with some much-needed quality-of-life improvements, such as the curved display, the built-in wireless charger, and much more.
Gaming devices aside, the company did indeed lift its revenue forecasts for the end of the financial year 2021-22 thanks to great results from the Entertainment Contents branch, as well as the performance of its pachislot and pachinko business. However, it had also raised concerning points about its integrated resorts business, thanks to raising COVID-19 cases, marking a trend in the company’s dependence on the COVID-19 situation in the country.