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    3738   JP3893700009

T-GAIA CORPORATION

(3738)
  Report
Delayed Japan Exchange  -  01:00 2022-12-06 am EST
1622.00 JPY   -0.25%
11/21T-Gaia's Attributable Profit Drops 23% in Fiscal H1
MT
11/18T Gaia : (Delayed)Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2023
PU
11/18T Gaia : Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2023
PU
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T Gaia : Full Version of Consolidated Financial Results for the Fiscal Year Ending March 31, 2022

05/27/2022 | 03:10am EST

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 Fiscal Year Ended March 31, 2022

(Based on J-GAAP)

May 2, 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 Annual General Meeting of Shareholders: June 22, 2022

Scheduled date of filing Securities Report: June 22, 2022

Scheduled commencement date of dividend payout: June 23, 2022

Financial results supplementary explanatory documents: Yes

Financial results presentation: Yes (for institutional investors & analysts)

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

1. Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (April 1, 2021 - March 31, 2022)

(1) Consolidated results of operations (twelve months)

(Percentages represent year-over-year changes)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

FY 2022

Million yen

%

Million yen

%

Million yen

%

Million yen

%

476,464

12.6

10,567

(24.7)

15,381

(22.3)

10,579

(18.9)

FY 2021

422,973

-

14,042

-

19,793

-

13,042

-

Note: Comprehensive income (million yen):

FY 2022: 10,579 / [(19.8)%]

FY 2021: 13,197 / [-%]

Earnings per share

Diluted earnings

Return on Equity

Ratio of ordinary

Ratio of operating

per share

profit to total assets

profit to net sales

FY 2022

Yen

Yen

%

%

%

189.74

-

15.7

6.5

2.2

FY 2021

234.01

-

21.9

9.5

3.3

Reference: Share of profit (loss) of entities accounted for using equity method (million yen):

FY 2022: (45)

FY 2021: (540)

Note 1: As the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29, March 31, 2020) and relevant revised ASBJ regulations have been applied from the beginning of the fiscal year, the figures for the FY 2021 are those after retrospectively applying the accounting standard and relevant revised ASBJ regulations. Therefore, year-over-year changes for the FY 2021 are not shown.

Note 2: During the second quarter of FY 2022, the Company finalized the provisional accounting treatment for a business combination. As a result, the

figures for the FY 2021 reflect this finalization of the provisional accounting treatment.

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

FY 2022

Million yen

Million yen

%

Yen

241,277

70,483

29.2

1,263.30

FY 2021

233,826

64,026

27.4

1,148.26

Reference: Shareholders'

equity (million yen):

FY 2022: 70,448

FY 2021: 63,998

(3) Consolidated cash flow position

Cash flows from

Cash flow from investing

Cash flows from

Cash and cash

equivalents at end of

operating activities

activities

financing activities

period

FY 2022

Million yen

Million yen

Million yen

Million yen

18,864

(2,484)

(7,931)

56,162

FY 2021

19,338

(32,711)

17,849

47,601

2. Dividends

Annual dividends

Total dividend

Dividend

Dividend on equity

payout ratio

annual

consolidate

consolidate

1Q-end

Interim

3Q-end

Year-end

Annual

FY 2021

Yen

Yen

Yen

Yen

Yen

Million yen

%

%

-

37.50

-

37.50

75.00

4,179

32.1

7.0

FY 2022

-

37.50

-

37.50

75.00

4,180

39.5

6.2

FY 2023

-

37.50

-

37.50

-

41.8

(forecasts)

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 1: Consolidated forecasts for the first half of FY 2023 have not been disclosed.

Notes

  1. Changes in significant subsidiaries during the period (twelve months) under review (Changes in subsidiaries accompanying change in the scope of consolidation): None
  2. Changes in accounting principles, estimates and restatements
    1. Changes in accounting principles caused by revision of accounting standards, etc.: Yes
    2. Changes in accounting principles other than those mentioned above: None
    3. Changes in accounting estimates: None
    4. Restatement: None

Note: For more details, please refer to "3. Consolidated Financial Statements and Notes (5) Notes to consolidated financial statements (Changes in accounting principles)" on page 13.

(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 twelve months)

FY 2022

56,074,000 shares

FY 2021

56,074,000 shares

FY 2022

308,866 shares

FY 2021

338,866 shares

FY 2022

55,756,422 shares

FY 2021

55,734,177 shares

  • Financial results reports are exempt from audit 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 supplementary documents on financial results)

The Company is scheduled to hold an online financial results presentation meeting for institutional investors and analysts on May 2, 2022 (Monday). 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 Fiscal Year Ended March 31, 2022

(Based on J-GAAP)

Attachment: Table of Contents

1. Summary of Results of Operations .....................................................................................................................................................

2

(1)

Summary of results of operations for the period under review.....................................................................................................

2

(2)

Summary of financial position for the current fiscal year.............................................................................................................

3

(3)

Summary of cash flows for the current fiscal year .......................................................................................................................

4

(4)

Outlook.........................................................................................................................................................................................

5

(5)

Basic profit allocation policy, and dividends in the current and next fiscal years ........................................................................

6

2. Fundamental Concepts Concerning the Choice of Accounting Standards..........................................................................................

6

3. Consolidated Financial Statements and Notes ....................................................................................................................................

7

(1)

Consolidated balance sheets .........................................................................................................................................................

7

(2)

Consolidated statements of income and consolidated statements of comprehensive income .......................................................

9

(Consolidated statements of income)........................................................................................................................................

9

(Consolidated statements of comprehensive income)...............................................................................................................

9

(3)

Consolidated statements of changes in shareholders' equity ......................................................................................................

10

(4)

Consolidated statements of cash flows .......................................................................................................................................

12

(5)

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

13

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

13

(Changes in accounting principles) ............................................................................................................................................

13

(Consolidated statements of income)..........................................................................................................................................

13

(Segment information, etc.) ........................................................................................................................................................

14

(Per Share Information)..............................................................................................................................................................

18

(Business combinations and relevant) ........................................................................................................................................

18

(Significant subsequent events) ..................................................................................................................................................

18

4. Other.................................................................................................................................................................................................

19

Transfers of directors........................................................................................................................................................................

19

- 1 -

T-Gaia Corporation (3738) / Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (Based on J-GAAP)

1. Summary of Results of Operations

The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and relevant revised ASBJ regulations from the beginning of the current fiscal year. As for applying the accounting standard and relevant revised ASBJ regulations, the Company, in accordance with the general rules for accounting treatment as set forth in paragraph 84 of the accounting standard, retrospectively applies the new accounting principles to all of the prior periods. Therefore, the Company compares its performance with the previous fiscal year and analyzes the data using the figures after applying the accounting standard and relevant revised ASBJ regulations.

Regarding the business combination with TF Mobile Solutions Corporation carried out on November 2, 2020 (it was absorbed through an absorption-type merger on February 1, 2021. Below, "TFM."), although a provisional accounting treatment was applied in the previous fiscal year, this was settled in the second quarter of the current fiscal year. Therefore, figures used in comparisons with the previous fiscal year and analysis are figures that have been revised following the settlement of this provisional accounting treatment.

  1. Summary of results of operations for the period under review
    In the fiscal year under review (April 2021 to March 2022), the Japanese economy continues to face a difficult situation due to the

impact of COVID-19. Looking forward, while there is an increasing sense of uncertainty because of the situation in Ukraine, for example, careful attention needs to be paid to the risk of an economic downturn at home and abroad due to supply side limitations and trends in raw material and other prices, as well as fluctuations in the financial and capital markets.

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), the steady popularization of handsets compatible with 5G (5th-generation mobile communication system) has begun. On the other hand, the provision of online-only plans for service, which will not provide in-store assistance, started in March 2021, which has caused a dramatic change to the role of shops and the competitive environment. In the second quarter of the current fiscal year, commission terms and conditions for some telecommunications carriers were revised. Also, delays to the delivery of some products caused by a global supply shortage of semiconductors, etc., have become prolonged.

Under this business environment, the Group's unit sales of mobile handsets, etc. (below, "unit sales") during the period under review jumped from the previous period to 4,160,000 as a result of the following factors.

  1. The impact of shortened operating hours and suspensions of operations at carrier shops and some limits on services available (in response to a nationwide declaration of a state of emergency) in 1Q FY 2021 (April to June 2020)
  2. The shift from 3G (3rd-generation mobile communication system) networks to 4G and 5G networks and increased competition among telecommunications carriers
  3. An increase in the number of shops from making TFM a subsidiary in November 2020

On the other hand, the revisions to commission terms and conditions for some telecommunications carriers as mentioned above and an increase in the ratio of sales of products other than main brand products led to a year-on-year decline in Group commission income.

From the third quarter of the current fiscal year, the Group has been engaged in increasing sales of original products and enhancing the productivity of shop operations primarily in the Consumer Mobile Business Segment. Despite the gradual emergence of effects from an improvement in operating profit compared to the second quarter of the current fiscal year, for example, the financial forecasts announced at the beginning of the term were not achieved.

As a result, consolidated business results for the period under review marked net sales of 476,464 million yen (+12.6% year-on- year), with operating profit of 10,567 million yen (-24.7%). As a result of a significant year-on-year decrease in the recognized amount of card deposits, ordinary profit marked 15,381 million yen (-22.3%) and profit attributable to owners of parent posted 10,579 million yen (-18.9%).

Consolidated results of each business segment for the fiscal year under review are detailed below.

(Millions of yen)

Consumer Mobile

Enterprise Solutions

Payment Service

Total

Business and Other

Business Segment

Business Segment

Business Segment

Net sales

407,141

35,294

34,028

476,464

14.6%

9.1%

(3.4%)

12.6%

Profit attributable to

5,607

1,862

3,109

10,579

owners of parent

(23.5%)

(3.8%)

(17.8%)

(18.9%)

Supplementary

8,249

2,518

(200)

10,567

information -

(24.9%)

(24.9%)

-

(24.7%)

Operating profit (loss)

* Percentages represent

year-over-year changes

[Consumer Mobile Business Segment]

In Consumer Mobile Business Segment, although unit sales increased year on year as mentioned above, commission income declined due to factors such as revisions to commission terms and conditions.

In addition to selling handsets, shops are playing an important role in the area of offering value in the non-telecommunications field, which each telecommunications carrier is focusing on, such as content from various services and payment services using smartphones. Moreover, through such services as our on-site sales service, we have newly created opportunities for sales and service provision and are expanding our points of contact with customers. Internal support systems have been enhanced, including the centralization of tasks for the selection and preparation of on-site sales service locations, for example.

At shops that were formerly directly managed by TFM, we integrated various internal systems and shop management systems in July 2021. We will continue to accelerate initiatives aiming at maximizing synergies, such as personnel exchanges and efficient

- 2 -

T-Gaia Corporation (3738) / Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (Based on J-GAAP)

personnel deployment.

Regarding investments in shops, in the period under review, we closed or transferred ownership of unprofitable shops.

As a result, net sales totaled 407,141 million yen (+14.6% year-on-year) and net income attributable to shareholders of the parent company totaled 5,607 million yen (-23.5%).

[Enterprise Solutions Business Segment]

In mobile solutions for enterprise clients' business, sales units jumped year on year due to the inclusion of the corporate sales channel of the former TFM. Although workstyle reforms are driving proactive ICT investment and demand for smart devices that can be used for remote work continues to flourish due to the impact of COVID-19 infections, delays to the delivery of some products caused by a global supply shortage of semiconductors, etc., have continued for a prolonged time.

Selling, general and administrative expenses increased year on year due to staff expansion and system investments, etc. with the aim to expand business scale and improve productivity.

Under these conditions, the Group is expanding products and services for its Life Cycle Management operations revolving 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. Moreover, the Group continued to adapt to changes in the business environment, including by focusing on proposing the building, operation, maintenance, etc. of networks that use edge solutions.

In products related to fixed-line telecommunications, the Company has continued to work to improve the quality of support for resale wholesalers and clients for the Company's own "TG Hikari" fiber-optics access service, and to improve business efficiency and strengthen direct sales through the introduction of systems.

As a result, we recorded net sales of 35,294 million yen (+9.1% year-on-year) and net income attributable to shareholders of the parent company of 1,862 million yen (-3.8%).

[Payment Service Business and Other Business Segment]

In Payment Service Business and Other Business Segment, gift card transaction volumes were down compared with the same period of the previous fiscal year. The demand for a variety of digital content, including games, music, and video streaming, continued to gradually decline from an increase during the nationwide voluntary lockdown.

Sales in the wholesale of smartphone accessories mainly to convenience stores continued to be robust due to the expansion of sales channels and the broadening of the merchandise lineup, despite costs which were recorded in the first quarter, such as the cost of addressing mislabeling of the manufacturing country in some products.

With respect to other new business, we continued to work on such areas as the operation of ICT schools for children and the hosting of online events for the e-Sports business.

QUO CARD Co., Ltd., a consolidated subsidiary, saw a decline in the amount of issuance for QUO Card compared to the same period of the previous fiscal year, when there was the special demand, primarily from local governments and other organizations, in order to support healthcare workers.

On the other hand, the number of member stores which accept QUO Card and QUO Card Pay steadily expanded.

As a result, net sales marked 34,028 million yen (-3.4%year-on-year), with profit attributable to owners of parent of 3,109 million yen (-17.8%) due to the significant year-on-year decrease related to hoarded cards mentioned above.

  1. Summary of financial position for the current fiscal year (Assets)
    Current assets at the end of the period under review were 194,542 million yen, which was 10,929 million yen higher than at the end of the previous fiscal year. This was mainly due to an 8,760 million yen increase in cash and deposits. Non-current assets were 46,735 million yen, which was 4,739 million yen lower than at the end of the previous fiscal year. This was mainly due to a 2,193 million yen decrease in goodwill and a 2,100 million yen decrease in deferred tax assets.
    As a result, total assets posted 241,277 million yen, which was 6,190 million yen higher than at the end of the previous fiscal year.
    (Liabilities)
    Current liabilities at the end of the period under review were 162,290 million yen, which was 13,816 million yen higher than at the end of the previous fiscal year. This was mainly due to a 9,000 million yen increase in current portion of long-term borrowings and a 11,825 million yen increase in card deposits. Non-current liabilities at the end of the period under review were 8,503 million yen, which was 12,822 million yen lower than at the end of the previous fiscal year. This was mainly due to a 12,751 million yen decrease in long-term borrowings.
    As a result, total liabilities posted 170,794 million yen, which was 994 million yen higher than at the end of the previous fiscal year.
    (Net assets)
    Total net assets at the end of the period under review were 70,483 million yen, which was 6,456 million yen higher than at the end of the previous fiscal year. This was mainly due to 10,579 million yen recognized in profit attributable to owners of parent and 4,181 million yen in payment of dividends of surplus.
    As a result, the equity ratio was 29.2% (27.4% at the end of the previous fiscal year).

- 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 27 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 May 2022 07:07:22 UTC.


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Sales 2023 464 B 3 403 M 3 403 M
Net income 2023 9 546 M 70,0 M 70,0 M
Net cash 2023 45 948 M 337 M 337 M
P/E ratio 2023 9,50x
Yield 2023 4,61%
Capitalization 90 717 M 665 M 665 M
EV / Sales 2023 0,10x
EV / Sales 2024 0,08x
Nbr of Employees 5 056
Free-Float 29,4%
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Mean consensus HOLD
Number of Analysts 4
Last Close Price 1 626,00 JPY
Average target price 1 735,00 JPY
Spread / Average Target 6,70%
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Nobutaka Kanaji Chairman
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