The topics presented today will be the "Financial Results for the Second Quarter and Future Outlook" and the "Reform Action Plan and Future Management Directions."
Let me begin with the financial results for the second quarter and future outlook.
In the consolidated financial results for the three months of the second quarter, we entered a trend toward recovery.
In the Media & Content Segment, Fuji TV's broadcasting revenue and streaming ad revenue trended toward recovery, and although a year-on-year decrease in net sales and an operating loss were recorded, both metrics did show improvement compared with the first quarter.
In the Urban Development, Hotels & Resorts Segment, THE SANKEI BUILDING recorded strong property sales, and the GRANVISTA's hotels and resorts also performed well.
Due to these results, in the consolidated financial results for the three months of the second quarter, while net sales were down year on year, operating losses were confined to 200 million yen. Total results for the first half of the fiscal year were a year-on-year decrease in net sales and an operating loss, due to the impact of the incidents on Fuji TV's broadcasting revenue in the first quarter.
Looking at the results of each business segment for the second quarter, firstly, in the Media & Content Segment, Fuji TV's broadcasting revenue was affected by a reactionary decline from the Paris Olympics of the previous year and by the impact of the Fuji TV incidents. However, monthly broadcasting revenue trended toward recovery, with the
number of advertisers in October reaching over 70% of last year's levels.
The performance of the Content Business remained strong in the growth areas of the digital, anime, and overseas program businesses. There was a reactionary decline in the event and merchandising businesses, resulting from the fact that the annual summer events at the head office were not held this year due to the impact of the Fuji TV incidents. Overall, however, Content Business revenue showed an improvement in profitability, with higher revenue and increased gross profit.
In terms of Fuji TV's total financial results for the first half of the fiscal year, the decline in broadcasting revenue in the first quarter due to the impact of the Fuji TV incidents resulted in a decrease in net sales and an operating loss.
In the other companies in the Media & Content Segment, Pony Canyon recorded a decrease in net sales and an operating loss due to the lack of hit animation titles and the downsizing of events. However, Quaras recorded increases in both net sales and operating income due to its strong performance in event-related businesses. Meanwhile, at dinos, despite a decline in revenue due to the underperformance in catalog sales in its core furniture and storage category, cost control efforts, including a review of catalog issuance, narrowed the operating loss.
On the other hand, the Urban Development, Hotels & Resorts Segment recorded a major increase in net sales and an increase in operating income.
THE SANKEI BUILDING recorded increases in both net sales and operating income, due to strong performance in sales of residences, hotels, and other properties.
In the leasing business, performance remained strong for all asset types in terms of both rents and occupancy rates. In
the sales business, sales of rental residences and hotels were strong during the quarter.
GRANVISTA Hotels & Resorts recorded increases in both net sales and operating income due to continued strong domestic and inbound tourism demand, which resulted in firm ADR and occupancy rates.
In the hotel business, ADR and occupancy rates at the INTERGATE-brand hotels exceeded the previous year's levels, due to their capturing inbound tourism demand. Additionally, in the aquarium business, while Kobe Suma Sea World, which opened in June last year, was impacted by Expo Osaka, Kansai and a reactionary decline from its strong performance in the first year of operations, Kamogawa Sea World saw strong domestic tourism demand, leading to results that exceeded the previous fiscal year.
Consequently, the results for THE SANKEI BUILDING and GRANVISTA were increases in net sales and operating income both for the second quarter and in total results for the first half of the fiscal year. In addition, THE SANKEI BUILDING's net sales, operating income, ordinary income, and net income and GRANVISTA's net sales and operating income were all the highest on record since these two companies became consolidated subsidiaries of FMH.
As I have just described, while the consolidated financial results for the first half of the fiscal year were a decrease in net sales and an operating loss primarily due to the Fuji TV incidents, a recovery trend began in the second quarter.
Now I will explain our full-year outlook.
We have revised our financial results forecasts upward.
At Fuji TV, broadcasting and streaming advertising revenues have been recovering since the second quarter and are expected to exceed our previous forecasts, and profitability
is also improving due to cost controls. For these reasons, consolidated operating income, ordinary income, and net income attributable to owners of the parent are projected to exceed previous forecasts, and we have therefore revised our forecasts.
In terms of shareholder returns, we have set a minimum annual dividend of 50 yen per share. By further enhancing profits and continuing share repurchases, we will aim to increase the dividend per share.
Next, I will talk about future management directions, including the Reform Action Plan.
We have updated the Reform Action Plan since we first disclosed it on May 16-once on July 31 to coincide with the announcement of our financial results for the first quarter, and again on September 30, the last business day of the second quarter.
Today, I will talk about three key points in the updates made at the second-quarter closing.
The first point is the timeline for achieving our target of 8% ROE and the setting of operating income targets for each segment. Our targets for ROE will be 5% to 6% by FY2030 and 8% by FY2033.
Our operating income targets for each segment are approximately 30 billion yen for both the Media & Content Segment and the Urban Development, Hotels & Resorts Segment by FY2030, and approximately 40 billion yen for the Media & Content Segment and 35 billion yen for the Urban Development, Hotels & Resorts Segment by FY2033.
To achieve these targets, we will establish key initiatives for each segment.
In the Media & Content Segment, in addition to enhancing
profitability in broadcasting and media, we will also establish a monetization model across the entire value chain by leveraging our IP.
In the Urban Development, Hotels & Resorts Segment, we will build a more capital-efficient business portfolio by reviewing our business and asset mixes.
As growth investments for this purpose, over the next five years, we plan to invest approximately 150 billion yen in the Media & Content Segment and 100 billion yen or more in the Urban Development, Hotels & Resorts Segment. The latter figure is calculated as the cumulative net investment, obtained by subtracting divestment proceeds from the total amount invested.
The next key point I would like to discuss concerns share repurchases as part of our capital allocation policy. We have decided to initiate share repurchases totaling 50 billion yen over the next year. We plan to conduct share repurchases totaling 250 billion yen by FY2029. Through these share repurchases, we aim to reduce shareholders' equity to about 650 billion yen at an early stage, and will continue to manage equity going forward with capital efficiency in mind.
The third key point concerns dividends. As I mentioned earlier, we have set a minimum annual dividend of 50 yen per share. We aim to increase the dividend per share by further enhancing profits and continuing share purchases.
At the same time, we will move quickly to implement the reorganization of our business and assets, partially completing that reorganization by FY2026.
Both the Media & Content Segment and the Urban Development, Hotels & Resorts Segment will be subject to this reorganization process. For the achievement of our ROE target, we intend to conduct a review from the perspective of