Announcement concerning projected results for FY 2009
Business results (consolidated)
The Vector Group posted net sales of 3,427,613,000 yen for the 21st term, up 4.8% y-o-y.
Operating income was 18,707,000 yen, down 72.1% y-o-y, due to a 6.4% increase in operating expenses against a 4.8% rise in net sales. In addition, the cost of sales ratio in the Internet sales business climbed 1.7 percentage points y-o-y to 79.0%, personnel expenses (including wages, bonuses, provision of allowance for bonuses, and social service costs) increased 12.1%, depreciation expenses rose 21.9%, and advertising expenses soared 97.7%. Some of these expenses are related to the expansion of new businesses.
Ordinary income also declined 52.7% y-o-y to 32,883,000 yen, despite non-operating income of 19,688,000 yen that was derived mainly from the distribution of income from foreign investment funds.
Net loss was 53,363,000 yen (compared with a net loss of 61,366,000 yen in the preceding fiscal year). This unfavorable figure reflects a net loss before taxes of 108,393,000 yen (a turnaround from net income before taxes of 12,244,000 yen a year ago) caused by an extraordinary loss of 116,080,000 yen associated with impairment losses on software of the online game business sector.
Internet sales business
The Internet sales business is related to personal consumption, which remained sluggish. In the software download sales field, demand for PCs ran its course, and the degree of consumers’ interest in software decreased. Accordingly, sales from the Pro-Reji service dropped 9.4% y-o-y to 1,482,753,000 yen, and sales from the Share-Reji service also fell 26.0% to 31,551,000 yen.
Meanwhile, in the software package and software sales sector, sales increased 16.8% y-o-y to 957,990,000 yen, due to the effects of selling products, mainly PC peripherals and memory devices, at major online shopping malls such as Yahoo and Rakuten Ichiba.
Online game business
At the online game business, sales jumped 51.4% y-o-y to 621,845,000 yen, accounting for 18.1% of net sales of the Group, thanks to the operations of eight titles on average during the period.
Site advertisement sales business
Sales of the site advertisement sales business sector were 218,622,000 yen, down 16.1% y-o-y. This decrease is attributable not only to the sluggish economy but also to the fact that sales of keyword ads, one of the advertisements operated in the Company’s website that account for one-third of the sector’s total sales, decreased rapidly toward the end of the fiscal year, and fell 15.0% from the previous term. Previously, keyword ads had remained strong.
Sales from other businesses were 114,849,000 yen, up 13.6% from the previous term. This increase is attributable to a 31.7% increase in sales of the Vector Direct Service (a comprehensive support service for software houses that provides the software download sales system including payment settlement services), which account for 70% of total sales of other businesses, despite a decrease in sales from the business for undertaking the operation and management of other companies’ servers (a 46.7% fall y-o-y).
Press Releases » 2009