Japan’s Asukanet reports net sales increase but operating income struggles

Japaneese photobook leader Asukanet Company, Ltd. reported its consolidated financial results for the fiscal year ending April 30, 2025, showing a slight increase in net sales by 3.2% to 7,263 million yen. However, the company experienced a significant decline in operating income and ordinary income by over 60%, with a net loss attributable to owners of the parent amounting to 263 million yen. The financial position indicates a decrease in total assets and net assets, with a slight drop in the equity ratio. Despite these challenges, the company maintains its annual dividend at 7.00 yen per share. Looking ahead, Asukanet forecasts a recovery in profitability for the fiscal year ending April 30, 2026, with expected increases in net sales and income figures.

Consolidated Business Results (May 1, 2024 – April 30, 2025)

• Net Sales: ¥7,263 million (3.2% increase from previous fiscal year)
• Operating Income: ¥173 million (61.2% decrease from previous fiscal year)
• Ordinary Income: ¥178 million (62.3% decrease from previous fiscal year)
• Net Loss attributable to owners of parent: ¥263 million (compared to a net income of ¥214 million in the previous fiscal year)
• Total Assets: ¥6,349 million (decrease of ¥741 million from previous fiscal year)
• Net Assets: ¥5,386 million (decrease of ¥770 million from previous fiscal year)
• Cash and Cash Equivalents at End of Period: ¥1,681 million (increase of ¥21 million from previous fiscal year)

Forecast for Fiscal Year Ending April 2026 (May 1, 2025 – April 30, 2026)

• Net Sales: ¥7,580 million (4.4% increase from previous fiscal year)
• Operating Income: ¥435 million (150.5% increase from previous fiscal year)
• Ordinary Income: ¥450 million (151.4% increase from previous fiscal year)
• Net Income attributable to owners of parent: ¥261 million

Business Segment Overview

• Funeral Business: This segment provides digital processing of memorial photos and related communication output services for the funeral market. It saw steady growth in new contracts and increased sales in memorial photo processing, funeral production services, and frames. The DX service “tsunagoo” also contributed to increased commission revenue. Segment sales were ¥3,389,901 thousand (103.3% year-on-year) and segment profit was ¥801,799 thousand (106.6% year-on-year).

• Photobook Business: This segment operates “AsukaBook” for professional photographers and “MyBook” for general consumers, and also supplies OEM photobooks and photo prints from smartphone photos. While sales to studios were strong, the wedding market struggled due to smaller-scale weddings and reduced photo-related spending. Efforts were made to strengthen sales planning, online seminars, and support for freelancers. The consumer market also faced challenges with a slow recovery in photo output. The subsidiary BET Inc.’s sales contributed throughout the year in the virtual sector. Despite production efficiencies, segment profit struggled due to sluggish sales and increased raw material prices. Segment sales were ¥3,734,489 thousand (103.2% year-on-year) and segment profit was ¥601,542 thousand (88.8% year-on-year).

• Aerial Display Business: This segment aims to create new markets using aerial imaging technology with “ASKA3D plates” (glass and resin). Sales remained flat year-on-year, failing to create a new aerial display market as anticipated, with challenges in overseas market development and sensor supply delays. The company recorded a significant inventory write-down and impairment loss in this segment. Segment sales were ¥144,387 thousand (99.0% year-on-year) and segment loss was ¥533,104 thousand (compared to a loss of ¥316,966 thousand in the previous fiscal year).

The overall decline in ordinary income and the recording of a net loss were mainly attributed to the struggles in the photobook business, and the inventory write-down and impairment loss in the aerial display business, along with an impairment loss on investment securities.