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.
May 13, 2022
Consolidated Financial Results | |
for the Fiscal Year Ended March 31, 2022 | |
(Under Japanese GAAP) | |
Company name: | Gala Inc. |
Listing: | Tokyo Stock Exchange |
Securities code: | 4777 |
URL: | http://www.gala.jp |
Representative: | Satoru Kikugawa, Representative Director and Group CEO |
Inquiries: | Yuki Okamoto, Director and CFO |
Telephone: | +81- 03-6822-6669 |
Scheduled date of annual general meeting of shareholders: | June 25, 2022 |
Scheduled date to commence dividend payments: | ― |
Scheduled date to file annual securities report: | June 27, 2022 |
Preparation of supplementary material on financial results: | Yes |
Holding of financial results briefing: | None |
(Yen amounts are rounded down to millions, unless otherwise noted.)
1. Consolidated financial results for the fiscal year ended March 31, 2022 (from April 1, 2021 to March 31, 2022)
(1) Consolidated operating results | (Percentages indicate year-on-year changes.) | ||||||||||
Net sales | Operating profit | Ordinary profit | Profit attributable to | ||||||||
owners of parent | |||||||||||
Fiscal year ended | Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | |||
March 31, 2022 | 600 | △39.0 | △297 | ― | △220 | ― | △186 | ― | |||
March 31, 2021 | 985 | 138.8 | 26 | ― | 93 | ― | △131 | ― | |||
Note: Comprehensive income | For the fiscal year ended March 31, 2022: | △260 million yen | [―%] | ||||||||||||
For the fiscal year ended March 31, 2021: | △138 million yen | [―%] | |||||||||||||
Basic earnings | Diluted earnings | Return on equity | Ratio of ordinary | Ratio of operating | |||||||||||
per share | per share | profit to total assets | profit to net sales | ||||||||||||
Fiscal year ended | Yen | Yen | % | % | % | ||||||||||
March 31, 2022 | △9.77 | ― | △235.3 | △20.7 | △49.6 | ||||||||||
March 31, 2021 | △6.98 | ― | △121.2 | 10.3 | 2.7 | ||||||||||
Reference: | Share of profit (loss) of entities accounted for using equity method | ||||||||||||||
For the fiscal year ended March 31, 2022: ― million yen | |||||||||||||||
For the fiscal year ended March 31, 2021: ― million yen | |||||||||||||||
(2) Consolidated financial position | |||||||||||||||
Total assets | Net assets | Equity-to-asset ratio | Net assets per share | ||||||||||||
As of | Millions of yen | Millions of yen | % | Yen | |||||||||||
March 31, 2022 | 1,047 | 438 | △2.8 | △1.53 | |||||||||||
March 31, 2021 | 1,085 | 303 | 17.3 | 9.83 | |||||||||||
Reference: | Equity | ||||||||||||||
As of March 31, 2022: | △29 million yen | ||||||||||||||
As of March 31, 2021: | 187 million yen |
(3) Consolidated cash flows
Cash flows from | Cash flows from | Cash flows from | Cash and cash | |
equivalents at end of | ||||
operating activities | investing activities | financing activities | ||
period | ||||
Fiscal year ended | Millions of yen | Millions of yen | Millions of yen | Millions of yen |
March 31, 2022 | △595 | 62 | ― | 288 |
March 31, 2021 | 381 | 0 | 310 | 825 |
2. Cash dividends
Annual dividends per share | Total cash | Ratio of | ||||||
Payout ratio | dividends to | |||||||
First | Second | Third | Fiscal | dividends | ||||
Total | (Consolidated) | net assets | ||||||
quarter-end | quarter-end | quarter-end | year-end | (Total) | ||||
(Consolidated) | ||||||||
Yen | Yen | Yen | Yen | Yen | Millions of yen | % | % | |
Fiscal year ended | ― | 0.00 | ― | 0.00 | 0.00 | ― | ― | ― |
March 31, 2021 | ||||||||
Fiscal year ended | ― | 0.00 | ― | 0.00 | 0.00 | ― | ― | ― |
March 31, 2022 | ||||||||
Fiscal year ending | ― | 0.00 | ― | 0.00 | 0.00 | ― | ||
March 31, 2023 | ||||||||
(Forecast) | ||||||||
* Notes
-
Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): Yes
Newly included: 1 company (Treeful Inc.)
Excluded: ― companies (Company name) - Changes in accounting policies, changes in accounting estimates, and restatement
- Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
- Changes in accounting policies due to other reasons: None
- Changes in accounting estimates: None
- Restatement: None
- Number of issued shares (common shares)
- Total number of issued shares at the end of the period (including treasury shares)
As of March 31, 2022 | 19,060,800 shares |
As of March 31, 2021 | 19,060,800 shares |
(ii) Number of treasury shares at the end of the period
As of March 31, 2022 | ― shares |
As of March 31, 2021 | ― shares |
(iii) Average number of shares outstanding during the period
Fiscal year ended March 31, 2022 | 19,060,800 shares |
Fiscal year ended March 31, 2021 | 18,791,942 shares |
- Financial results reports are exempt from audit conducted by certified public accountants or an audit corporation.
-
Proper use of earnings forecasts, and other special matters: (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)
Supplementary materials on financial results will be posted on the Company's website after the announcement of financial results.
○Additional Information
1. Summary of Operating Results…………………………………………………………………………………………… | 2 | |
(1) | Summary of Current Period Operating Results………………………………………………………………………… | 2 |
2. Consolidated Financial Statements and Principal Notes…………………………………………………………………… | 4 | |
(1) | Consolidated Balance Sheet …………………………………………………………………………………………… | 4 |
(2) | Consolidated Statement of Income and Consolidated Statement of Comprehensive Income………………………… | 6 |
Consolidated Statement of Income…………………………………………………………………………………… | 6 | |
Consolidated Statement of Comprehensive Income………………………………………………………………… | 7 | |
(3) | Consolidated Statement of Changes in Equity………………………………………………………………………… | 8 |
(4) | Consolidated Statement of Cash Flows ………………………………………………………………………………… | 10 |
(5) | Notes on the Consolidated Financial Statements……………………………………………………………………… | 11 |
(Notes on Going Concern Assumptions)…………………………………………………………………………… | 11 | |
(Changes in Accounting Policies) …………………………………………………………………………………… | 12 | |
(Segment Information, etc.) ………………………………………………………………………………………… | 12 | |
(Per Share Information) ……………………………………………………………………………………………… | 15 |
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1． Summary of Operating Results
(1) Summary of Current Period Operating Results
During the current fiscal year, Japanese economic activities have been significantly restricted by the declaration of a state of emergency and the application of pre-emergency measures due to the spreading of COVID-19. Although the Japanese economy showed a partial recovery following the gradual restart of economic activities as a result of increased vaccination coverage and termination of the state of emergency, uncertainty over the future still exists due to major concerns about the spreading of new mutant viruses, increased raw material price, and situations in Ukraine, etc. In these circumstances, Gala Inc. (the "Company") and its consolidated subsidiaries (collectively, the "Group") have proceeded with the Online Game business and the Smartphone App business with the aim of becoming the World's No.1 global online community company.
The Group's operating results for the current fiscal year are summarized as follows:
The Group's consolidated net sales have significantly decreased to ¥600,958 thousand, a 39.0% decrease from the previous fiscal year. The decrease was mainly due to a sales decrease in the Smartphone App business since one-off license transfer sale was recognized in the previous fiscal year, and furthermore, current fiscal year sales in the Smartphone App business declined as a result of the license transfer.
The cost of sales decreased due to a royalty payment decrease, which is in line with the Smartphone App business sales decline following the license transfer stated above.
Selling, general and administrative expenses decreased from the previous fiscal year due to a decrease in software amortization expenses, despite an increase in the outsourcing costs of Rappelz (*1).
In addition, gain on sales of crypto assets of ¥24,925 thousand, gain on valuation of crypto assets of ¥24,979 thousand, and foreign exchange gains of ¥25,981 thousand were recorded in the non-operating income.
As a result, the Group recorded an operating loss of ¥297,865 thousand (operating profit of ¥26,265 thousand in the previous fiscal year), ordinary loss of ¥220,339 thousand (ordinary profit of ¥93,273 thousand in the previous fiscal year), and loss attributable to owners of parent of ¥186,142 thousand (loss attributable to owners of parent of ¥131,087 thousand in the previous fiscal year).
The Group's operating results by each segment are summarized as follows:
(i) Japan
In October 2021, the Japan segment started offering Rappelz, a smartphone game app developed by Gala Lab Corp., a consolidated subsidiary of the Company, in the US and Canada, although the release date had been delayed since its development period was extended to improve the quality of the game and achieve other enhancements. The segment is currently preparing for the renewal and global release of Rappelz as an NFT game/blockchain game by incorporating blockchain technology. In the NFT games/blockchain games, in-game items are "converted to NFT" by the blockchain, a fundamental technology of cryptocurrencies, and users can change the items obtained in the game to crypto assets that can be traded on an exchange or other markets. The segment will further enhance the appeal of games through these measures and focus on the monetization of the Smartphone App business. The start of the service is expected to be in the second quarter of the fiscal year ending March 2023 for re-release in the US and the third quarter of the same fiscal year for release in the EU and Korea.
Following the resolution at the Board of Directors meeting held on April 2, 2021 to make Treeful Inc. a subsidiary of the Company by accepting its third-party allocation of shares, the Company acquired shares of Treeful Inc. on April 30, 2021. Accordingly, the Group launched the Treehouse Resort business as a new business. The Treehouse Resort business is a resort business in Nago City, Okinawa operated by Treeful Inc., a consolidated subsidiary of the Company. The business offers a combination of Treehouse and Aerohouse built on the ground as one set to the guests. Treeful Inc. is licensed for the business of operation of an inn according to the Hotel Business Act since July 2021 and opened the Treehouse Resort in August 2021 as the first paid treehouse accommodation provider in Japan.
With the concept of a "Sustainable Resort", the Treehouse Resort aims the establishment of a sustainable society by using electricity instead of fossil fuel and generating solar power larger than actual usage. The Group has found a growth strategy for the Treehouse Resort business and aims to increase its enterprise value.
Net sales of the segment (including inter-segment transactions) increased from the previous fiscal year since the above sales have been recorded and the Cloud-related business sales have increased. The Cloud-related business supports the Megazone Group, a Korean business group, in deploying its cloud business in Japan and offers support for sales, operations, hiring and human resources, and events in Japan.
As for expenses, selling, general and administrative expenses have increased mainly due to increases in payroll costs and depreciation expenses as a result of consolidating Treeful Inc.
As a result, net sales of the Japan segment (including inter-segment transactions) increased by ¥22,098 thousand or 40.4% year- on-year to ¥76,747 thousand and the segment recorded a loss of ¥185,479 thousand (loss of ¥164,138 thousand in the previous fiscal year).
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