Japan’s Asukanet reports higher quarterly sales

Japanese photobook maker Asukanet Co., Ltd. reported sales for the quarter ending July 31 were 1,466,562 thousand yen (116.4% compared to the same quarter of the previous fiscal year). In terms of income, despite the higher R&D expenses for the establishment of a technical development center in the aerial display business, an increase in segment income in the funeral business and photo book business resulted in ordinary income was 42,871 thousand yen (549 thousand yen in profit during the same quarter of the previous fiscal year) and net income was 28,428 thousand yen (1,376 thousand yen in loss during the same quarter of the previous fiscal year).

The company noted, during the first consolidated quarter of this fiscal year, as the economy of Japan continued to suffer the effects of the coronavirus pandemic, states of emergency were declared and quasi-emergency measures were enacted. Economic activity has stalled.

Asukanet operates three business areas: the funeral business, which adds digital processing and remote output services for photos of the deceased to a funeral business (formerly the “memorial business”) that is largely unaffected by economic trends; the photo book business (formerly the “personal publishing business”), which provides ideas for new photo output methods, and the aerial display business (formerly the “aerial imaging business”).

Following is an overview of the business results for each segment. The result figures for each segment include internal inter-segment sales.

Funeral business

In this business, although funerals continue to be reduced in size as a result of the coronavirus pandemic, there was an increase in the holding of funerals themselves compared to the same period in the previous year, the company said. As a result, there was a recovery in processing photos of the deceased, and videos, and other funeral production services. This also led to an increase in sales of frames and supplies. Consequently, sales were higher than in the same period in the previous year.

In terms of profit and loss, despite the increase of advertising expenses and depreciation expenses, there was an increase in sales. These factors resulted in higher profits compared with the same period in the previous fiscal year.

As a result, 1Q sales were 627,305 thousand yen (114.5% year-on-year), and 1Q segment income was 135,758 thousand yen (132.5% year-on-year).

Photo book business

The Asukanet business operates AsukaBook for the professional photography market in Japan and MyBook for the general Japanese consumer market, as well as wholesale printing of photo albums and photo prints.

The wedding photo album business saw difficult sales due to the many delayed weddings and other effects of the coronavirus pandemic, but the company is expecting an improvement. The general consumer market and OEM business were down from the same period in the previous year.

In terms of profit and loss, Asukanet succeeded in increasing the operating rate that accompanied the higher in sales, despite the higher advertising expenses, travel, and transportation expenses, and there was a large increase in segment income. As a result, 1Q sales were 799,634 thousand yen (116.9% year-on-year), and 1Q segment income was 122,378 thousand yen (248.3% year-on-year).

Aerial display business

The aerial display business creating a market through new image and video expressions utilizing aerial imaging technologies, the company said. Asukanet is developing, manufacturing, and selling both glass and plastic “ASKA3D plates” that utilize original technology to project images in mid-air.

In the area of marketing, we are carrying out sales centered on our Marketing Division in Japan, and centered on our agents overseas. In addition to providing support for participating in exhibitions in China, we also achieved results in terms of the numbers of installed products and verification testing. Although marketing activities are subject to some restrictions due to the coronavirus pandemic, we are carrying out sales of glass ASKA3D plates for signage applications, and of plastic ASKA3D plates for use in products enabling non-contact operation.

Asukanet achieved higher sales due to the increase in sales of glass ASKA3D plates. Segment loss increased due to the higher R-and-D expenses for improvements to ASKA3D plates and the establishment of a technical development center resulted in higher advance expenses during this quarter. 1Q sales were 39,622 thousand yen (141.3% year-on-year), and 1Q segment loss was 76,727 thousand yen (compared to a loss of 52,602 thousand yen in the period of the same quarter of the previous fiscal year).

As a result of the above, sales were 1,466,562 thousand yen (116.4% compared to the same quarter of the previous fiscal year). In terms of income, despite the higher R-and-D expenses for the establishment of a technical development center in the aerial display business, increase in segment income in the funeral business and photo book business resulted in ordinary income was 42,871 thousand yen (549 thousand yen in profit during the same quarter of the previous fiscal year) and net income was 28,428 thousand yen (1,376 thousand yen in loss during the same quarter of the previous fiscal year).

Quarterly financial results

(Amounts of less than one million yen are rounded down.)

1. Non-Consolidated Financial Results for the Three Months Ended July 31, 2021 (May 1, 2021 to July 31, 2021)

(Note) The change from the previous corresponding period in ordinary income for the three months ended July 31, 2021 is not presented as it exceeds 1,000%.

(2) Non-Consolidated Financial Position

(Reference) Equity: As of July 31, 2021: ¥5,737 million As of April 30, 2021: ¥5,825 million

2. Dividends

3. Non-Consolidated Financial Results Forecast for the Fiscal Year Ending April 30, 2022 (May 1, 2021 to April 30, 2022)

(% indicates changes from the previous corresponding period.)

* Notes:

1. Accounting policies adopted specially for the preparation of quarterly financial statements: Yes
2. Changes in accounting policies, changes in accounting estimates and retrospective restatement
   1. Changes in accounting policies due to the revision of accounting standards: Yes
   2. Changes in accounting policies other than 1) above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatement: No
3. Total number of issued shares (common shares)
   1. Total number of issued shares at the end of the period (including treasury shares):