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    3738   JP3893700009

T-GAIA CORPORATION

(3738)
  Report
Delayed Japan Exchange  -  01:00:00 2023-02-01 am EST
1644.00 JPY   -0.90%
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T Gaia : (Delayed)Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2023

11/18/2022 | 03:09am EST
(Percentages represent year-over-yearchanges)

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2023

(Six Months Ended September 30, 2022) (Based on J-GAAP)

November 4, 2022

Company name:

T-Gaia Corporation

Listing:

Tokyo Stock Exchange

Stock code:

3738

URL:

https://www.t-gaia.co.jp/

Representative:

Masato Ishida, President & CEO

Contact:

Kaoru Hayashi, Senior Managing Officer & General Manager of Corporate Planning & Strategy Dept.

Tel: +81-3-6409-1010

Scheduled date of filing Quarterly Securities Report: November 4, 2022

Scheduled commencement date of dividend payout: December 6, 2022

Quarterly financial results supplementary explanatory documents: Yes

Quarterly financial results presentation: Yes (for institutional investors & analysts)

(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2023 (April 1, 2022 - September 30, 2022)

(1) Consolidated results of operations (six months)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

1H FY 2023

Million yen

%

Million yen

%

Million yen

%

Million yen

%

212,828

(3.4)

3,632

(25.8)

5,650

(24.0)

4,140

(23.3)

1H FY 2022

220,337

30.8

4,898

(12.7)

7,429

(20.8)

5,397

(15.8)

Note: Comprehensive

income (million

yen):

1H FY

2023: 4,393 /

[(19.0)%] 1H

FY 2022: 5,423 /

[(16.3)%]

Earnings per

Diluted earnings

share

per share

1H FY 2023

Yen

Yen

74.23

-

1H FY 2022

96.81

-

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

1H FY 2023

Million yen

Million yen

%

242,727

73,430

30.0

FY 2022

241,277

70,483

29.2

Reference: Shareholders'

equity (million yen):

1H FY

2023: 72,827

FY 2022:

70,448

2. Dividends

Annual dividends

1Q-end

Interim

3Q-end

Year-end

Annual

FY 2022

Yen

Yen

Yen

Yen

Yen

-

37.50

-

37.50

75.00

FY 2023

-

37.50

FY 2023

-

37.50

75.00

(forecasts)

Note: Revisions to the dividend forecast most recently announced: None

3. Consolidated Forecasts for the Fiscal Year Ending March 31, 2023 (April 1, 2022 - March 31, 2023)

(Percentages represent year-over-year changes)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Earnings per

owners of parent

share

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

Full year

483,000

1.4

11,200

6.0

15,400

0.1

10,000

(5.5)

179.32

Note: Revisions to the financial forecast most recently announced: None

Notes

  1. Changes in significant subsidiaries during the period (six months) under review (Changes in subsidiaries accompanying change in the scope of consolidation): Yes

Newly included:

2 companies (Relay2, Inc. and CCC FRONTIER Inc. (the trade name changed to UNiCASE Corporation on

October 1, 2022))

Excluded:

-

  1. Application of accounting procedures specific to creation of quarterly consolidated financial statements: None
  2. Changes in accounting principles, estimates and restatements
    1. Changes in accounting principles caused by revision of accounting standards, etc.: None
    2. Changes in accounting principles other than those mentioned above: None
    3. Changes in accounting estimates: None
    4. Restatement: None
  3. Number of shares issued and outstanding (shares of common stock)
  1. Number of shares outstanding (including treasury shares) at the end of the period
  2. Number of treasury shares at the end of the period
  3. Average number of shares outstanding during the period (six months)

1H FY 2023

56,074,000 shares

FY 2022

56,074,000 shares

1H FY 2023

282,266 shares

FY 2022

308,866 shares

1H FY 2023

55,775,599 shares

1H FY 2022

55,747,756 shares

  • Quarterly financial results reports are exempt from quarterly reviews conducted by certified public accountants or an audit corporation.
  • Cautionary statement with respect to forward-looking statements

(Disclaimer on forward-looking statements, etc.)

These materials contain forward-looking information including earnings projections based on information currently available to the Company and certain assumptions considered reasonable in the judgment of the Company. Nothing contained in these materials is meant to suggest that the Company promises to attain the said projections. Moreover, due to various factors, actual results may materially differ from projections.

(How to obtain quarterly supplementary documents on financial results)

The Company is scheduled to hold an online financial results presentation meeting for institutional investors and analysts on November 4, 2022 (Friday). The Company plans to post the documents used in this presentation on its website on the same day the meeting is held.

T-Gaia Corporation (3738) / Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2023 (Six Months Ended September 30, 2022) (Based on J-GAAP)

  • Attachment: Table of Contents

1. Qualitative Information Concerning the First Half Financial Results.................................................................................................

2

(1)

Explanation of operating performance .........................................................................................................................................

2

(2)

Explanation of financial position..................................................................................................................................................

3

(3)

Explanation of forward-looking information including the consolidated financial forecasts .......................................................

3

2. Quarterly Consolidated Financial Statements and Notes ....................................................................................................................

4

(1)

Quarterly consolidated balance sheets..........................................................................................................................................

4

(2)

Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income.........................

5

(Quarterly consolidated statements of income)

(Consolidated six months period) ..............................................................................................................................................

5

(Quarterly consolidated statements of comprehensive income)

(Consolidated six months period) ..............................................................................................................................................

5

(3)

Quarterly consolidated statements of cash flows..........................................................................................................................

6

(4)

Notes to quarterly consolidated financial statements....................................................................................................................

8

(Notes on the going-concern assumption) ....................................................................................................................................

8

(Notes on significant changes in shareholders' equity) ................................................................................................................

8

(Segment information)..................................................................................................................................................................

8

- 1 -

T-Gaia Corporation (3738) / Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2023 (Six Months Ended September 30, 2022) (Based on J-GAAP)

1. Qualitative Information Concerning the First Half Financial Results

  1. Explanation of operating performance

In the period under review (April to September 2022), amid the continuation of global monetary tightening, etc., the downturn in overseas business conditions has been a downward risk on the business conditions in Japan. Careful attention also needs to be paid to the impacts of rises in commodity prices, supply side limitations, fluctuations in the financial and capital markets, etc.

In the market for mobile phone handsets, which is the main business field of the Group (the Company, its consolidated subsidiaries, and its equity-method affiliates), gradual progress was made on the shift to 5G (5th-generation mobile communication system), including in March 2022 when KDDI CORPORATION ended its 3G (3rd-generation mobile communication system) service. However, commission terms and conditions for some telecommunications carriers were revised in the second quarter of the previous fiscal year (July to September 2021). In addition to this, great change is underway in the role played by mobile phone distributors, including the Company, and the competitive environment, such as planning to improve online procedures and to consolidate or abolish carrier shops in the medium to long term.

Also, although delays to the delivery of some products caused by a global supply shortage of semiconductors, etc., are being resolved, the outlook remains unclear.

Under this business environment, the Group steadily worked toward the realization of the TG Universe (the ecosystem within T- Gaia), the Group-wide strategy in our medium-term management plan, and initiatives to achieve the TG Material Issues (eight priority issues) with the aim of transforming our business portfolio so that it is not dependent on the Consumer Mobile Business Segment. In April 2022, we established a specialist division that will operate on a Group-wide basis to support efforts in the areas of "growth investments, particularly in the Enterprise Solutions Business Segment and Payment Service Business and Other Business Segment," and "further growth of sales of original products and enhancement of the productivity of store operations."

The number of contracts for mobile phone numbers (below, "mobile phone contracts") agreed during the period under review was 1,740,000 (a decrease of 14.2% compared to the same period of the previous fiscal year), mainly due to an increase in the price of handsets and a fall in the number of model change contracts that accompanied a change in the direction of sales measures by telecommunications carriers. Although we began to see the effects of specific initiatives for raising productivity, such as growing sales of original products and Smart Online Support, which provides remote support for initial setup and usage methods at shops, this was not enough to offset revenue decreases such as the decline in commission income due to the revisions to commission terms and conditions and fall in the number of mobile phone contracts mentioned above.

As a result, consolidated business results for the period under review marked net sales of 212,828 million yen (-3.4% compared with the year-earlier period), with operating profit of 3,632 million yen (-25.8%). Due to a year-on-year decrease in the hoard profit of prepaid card, ordinary profit marked 5,650 million yen (-24.0%) and profit attributable to owners of parent posted 4,140 million yen (- 23.3%).

Results by business segment for the period under review are described below.

(Millions of yen)

Consumer

Enterprise

Payment Service

Others and

Solutions

Business and

Consolidated

Mobile Business

adjustment

Business

Other Business

financial results

Segment

amounts

Segment

Segment

Net sales

177,100

18,088

17,602

36

212,828

(5.3%)

6.9%

8.0%

-

(3.4%)

Profit attributable to

1,605

1,197

1,254

83

4,140

owners of parent

(41.2%)

27.5%

(27.3%)

-

(23.3%)

Supplementary

2,169

1,276

144

41

3,632

information -

(43.1%)

13.9%

-

-

(25.8%)

Operating profit

* Percentages represent

year-over-year changes

[Consumer Mobile Business Segment]

This segment is engaged in intermediary services specializing in contracts for telecommunications services, including mobiles, and other types of contracts provided by each telecommunications carrier, as well as the sales of mobile phones, etc. For the Group's shops across Japan, we are aiming to realize shops that are "regional ICT hubs" rather than mere "points of sale," and which please customers and win their trust through high quality services and proposals with utility value that meets customer requirements.

In the Consumer Mobile Business Segment, the external environment is becoming increasingly severe, mainly with commission income declining compared with the same period of the previous fiscal year due to revisions to commission terms and conditions and sluggish growth in the number of mobile phone contracts as mentioned above. However, we are creating opportunities to make sales and provide services not only by opening satellite shops, mainly at shopping malls, etc., but also by providing sales support for remote locations where there are no local shops. Additionally, we are expanding the number of shops that can handle Smart Online Support to raise efficiency and focusing on growing sales of coating services for mobile phones, etc., and sales of original products such as security products.

Also, in addition to being selected as an implementation organization for the Ministry of Internal Affairs and Communications' Project on Digital Utilization Support for Users under FY2022 Initial Budget (Regional Cooperation), we are also contributing to the vitalization of regional communities in ways such as taking on a project to support applications for My Number cards through telecommunications carriers.

As a result, net sales marked 177,100 million yen (-5.3% compared with the year-earlier period), with profit attributable to owners of parent of 1,605 million yen (-41.2%).

[Enterprise Solutions Business Segment]

This segment is engaged in the sale of mobile phone for enterprise customers, the provision of solution services related to devices and network management services, etc., and sales and intermediary services specializing in optical communication line service contracts for corporate and individual customers. The Group is expanding products and services to create a one-stop channel for

- 2 -

T-Gaia Corporation (3738) / Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2023 (Six Months Ended September 30, 2022) (Based on J-GAAP)

meeting customers' requirements through its Life Cycle Management (LCM) business which revolves around administrative and support services for device life cycles spanning from procurement, propositions, and introduction support for smart devices including PCs, to building Wi-Fi environment, maintenance, operations, and updating services.

In the Enterprise Solutions Business Segment, the number of mobile phone contracts increased compared with the same period of the previous fiscal year as delays to the delivery of some products caused by a global supply shortage of semiconductors, etc., were being resolved.

We expanded products and services in the LCM business and the number of management IDs for network administrative services, helpdesks, and the like surpassed the same period of the previous fiscal year. We also focused on proposing new business areas such as proposing the building, operation and maintenance of networks that use edge solutions, as well as strengthening relationships with local governments against the background of the "Digital Garden City Nation Vision" advocated by the Japanese government.

In products related to fixed-line telecommunications, the cumulative number of lines owned by the Company's own "TG Hikari" fiber-optics access service rose steadily.

As a result, net sales marked 18,088 million yen (+6.9% compared with the year-earlier period), with profit attributable to owners of parent of 1,197 million yen (+27.5%).

[Payment Service Business and Other Business Segment]

This segment is mainly engaged in sales of PIN (prepaid codes), sales of gift cards, and sales of smartphone accessories through major nationwide convenience store chains. It also includes the consolidated subsidiary QUO CARD Co., Ltd. which is tasked with the issuance and settlement of "QUO Card" and "QUO Card Pay" and the sales and repair/maintenance of card-handling equipment, etc.

In Payment Service Business, PIN and gift card transaction volumes were down compared with the same period of the previous fiscal year but there continued to be high levels of demand for a variety of digital content, including games, music, and video streaming. Sales in the wholesale of smartphone accessories mainly to convenience stores were robust due to the expansion of sales channels and the broadening of the merchandise lineup.

The amount of issuance for QUO Card and Quo Card Pay increased compared to the same period of the previous fiscal year, mainly due to adoption in various local government initiatives, but some shipping and administrative expenses were incurred in advance. QUO CARD Co., Ltd. continued to focus on adding member stores to increase convenience for users.

With respect to other new business, we continue to work on such areas as the operation of ICT schools for children and the hosting of online events for the e-Sports business. We also expanded our renewable energy business while contributing to customers' efforts to address climate change, including through contracts for the installation of solar power generation systems concluded between our consolidated subsidiary TG Power Inc. and the stores of major restaurant chains and electronic goods retailers.

As a result, net sales marked 17,602 million yen (+8.0% compared with the year-earlier period), with profit attributable to owners of parent of 1,254 million yen (-27.3%) due to the year-on-year decrease in the hoard profit of prepaid card mentioned above.

  1. Explanation of financial position (Assets)
    Current assets at the end of the period under review were 195,153 million yen, which was 611 million yen higher than at the end of the previous fiscal year. This was mainly due to a 1,234 million yen increase in cash and deposits and a 5,470 million yen increase in guarantee deposits despite a 5,500 million yen decrease in notes and accounts receivable - trade. Non-current assets at the end of the period under review were 47,573 million yen, which was 838 million yen higher than at the end of the previous fiscal year. This was mainly due to a 615 million yen increase in goodwill.
    As a result, total assets posted 242,727 million yen, which was 1,449 million yen higher than at the end of the previous fiscal year.
    (Liabilities)
    Current liabilities at the end of the period under review were 162,497 million yen, which was 206 million yen higher than at the end of the previous fiscal year. This was mainly due to a 9,663 million yen increase in card deposits despite a 9,000 million yen decrease in current portion of long-term borrowings. Non-current liabilities at the end of the period under review were 6,800 million yen, which was 1,703 million yen lower than at the end of the previous fiscal year. This was mainly due to a 1,875 million yen decrease in long-term borrowings.
    As a result, total liabilities posted 169,297 million yen, which was 1,497 million yen lower than at the end of the previous fiscal year.
    (Net assets)
    Net assets at the end of the period under review were 73,430 million yen, which was 2,946 million yen higher than at the end of the previous fiscal year. This was mainly due to 4,140 million yen recognized in profit attributable to owners of parent and 2,091 million yen in payment of dividends of surplus.
  2. Explanation of forward-looking information including the consolidated financial forecasts

There is no change to the full-year consolidated financial forecasts announced on May 2, 2022.

Six months (April to September 2022) net sales represent 44.1% of the full-year estimate, with percentages for operating profit, ordinary profit, and profit attributable to owners of parent at 32.4%, 36.7%, and 41.4%, respectively.

- 3 -

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

T-Gaia Corporation published this content on 18 November 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 November 2022 08:08:01 UTC.


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Net income 2023 9 521 M 73,2 M 73,2 M
Net cash 2023 45 948 M 353 M 353 M
P/E ratio 2023 9,63x
Yield 2023 4,56%
Capitalization 91 722 M 709 M 705 M
EV / Sales 2023 0,10x
EV / Sales 2024 0,08x
Nbr of Employees 5 056
Free-Float 29,4%
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Number of Analysts 4
Last Close Price 1 644,00 JPY
Average target price 1 735,00 JPY
Spread / Average Target 5,54%
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Masato Ishida President & Representative Director
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