CEO Comment Volume 34, 2007.08
Report on Performance Forecast for Fiscal Year Ended June 2007 and Business Developments
Upward Revision of Individual Performances and Overview of Previous Resu
As approved at the special board meeting earlier today, we announced an upward revision of individual performances, as well as the consolidated performance forecast, for the fiscal year ended June 2007. (Details to be announced in our August 28 financial results briefing)
The revised consolidated performance forecast for the FY is as follows:
Sales: 17,338 million yen (+39% year-on-year increase)
Operating income: 2,475 million yen (+64.5% year-on-year increase)
Both are expected to exceed past records.
Although net income did not reach 800 million yen as forecasted at start of year, it is expected to post a significant 73.9% year-on-year increase. Cost of sales included an impairment loss on operating investment securities for our incubation business (investment & consultation) of 375 million yen, but final profit is still projected to reach 588 million yen, econd only to the 633 million yen for the FY ended June 2005.
Digital Garage’s two public subsidiaries have already announced their fiscal results, further details of which will be discussed in our August 28 financial results briefing. The following items are updates and overviews of our new venture development.
- Following last year’s significant growth (a year-on-year increase of more than 50%), our solution business continues to perform well. With the increasing popularity of broadband and 3-G mobile phones, the business format for advertising and solutions is seeing a drastic change. In such a business climate, Digital Garage Group’s cross media solutions are recognized as valuable tools by many national clients, thus contributing to the solid results last year.
- Having acquired 100% of the shares of Sogei Co., Ltd., a major real estate advertising agency, the Group carried out a 1.05 billion yen capital increase on July 27. As a result, Sogei established a strong financial footing with enhanced capital adequacy. Coinciding with this event, I assumed the position of Chairman of the Board for all 5 solution segments. (Please read the message from Sogei CEO Masaharu Nishimoto for details http://www.sogei.co.jp/corporate/)
For further details, please see the release issued on August 10.
- DG Mobile, Inc., a subsidiary that delivers comics and other content to 3-G mobile phones, is in its fourth year since its inception in 2004. It has successfully collaborated with several major publishing companies involving various types of content, which has resulted in a steady increase in sales. Taking advantage of the growing eBook market for mobile devices, the company has turned a profit this fiscal year.
- On April 26, Kakaku.com Inc. and Sogei Co., Ltd. launched their mashup business, Mansion DB (http://mansion-db.com/), an Internet search engine specializing in new condominiums for sale. Focusing on information for the Kanto, Kansai and Tokai areas, the database now contains 1,351 properties as of the end of July, after only three months of operation. The site began some fee-based services from July and expects further improvements in advertising revenue as the number of properties in the database increases.
- Furthermore, on June 18, CGM Marketing, Inc., a strategic subsidiary established in cooperation with Dentsu Group and Asatsu-DK Inc. and focused on next-generation advertising, launched a beta version of a new advertisement matching service called AD-Butterfly with the support of major national clients (https://www.adbutterfly.com/). The final version will be made available this fiscal year in order to spur short-term profit.
While a global downturn in equity markets is causing volatility, Digital Garage Group remains fully committed to our core business as well as to newly emerging next-generation Internet businesses. We sincerely appreciate your continuous support and guidance.
