• April 18, 2013
  • Press Release
  • Company Name : Capcom Co., Ltd.
    Representative: Haruhiro Tsujimoto, President and COO
    (Company Code: 9697 Tokyo-Osaka Stock Exchange)
    Contact: Public Relations and Investor Relations Office
    Phone Number: +81-6-6920-3623

Capcom Announces Special Loss, Revision of Business Forecast,
Non-consolidated Business Forecast and Reasons behind the Difference from Previous Year’s Business Results

Capcom Co., Ltd. (Capcom) announces that on April 18, 2013, the board of directors approved a resolution to revise the forecast for consolidated business forecast for the fiscal year ended March 2013 (April 1, 2012 – March 31, 2013) that was announced on December 19, 2012 based on results of operations in this fiscal year.
Furthermore, the non-consolidated business forecast is likely to be different compared with the previous year’s actual business results. Details are as follows:

1. Special loss

In view of the sudden and significant changes in the operating environment of the Digital Contents business, Capcom reviewed its business expansion strategy for the sector and restructured its game development organization to reflect changes in its game development strategy. As a result, the Company booked a special loss of 6,949 million yen on a consolidated basis and 7,287 million yen on a non-consolidated basis to factor in business restructuring expenses. The special losses were estimated by a thorough assessment of the development process and the future potential for the recovery of development expenses.

2. Consolidated earnings forecast for the fiscal year ended March 31, 2013
(From April 1, 2012 to March 31, 2013)

(Millions of Yen)

  Net sales Operating income Ordinary income Net income Net income
per share
Previous forecast (A) 93,500 10,000 10,000 6,500 112.88
Revised forecast (B) 94,000 10,000 10,900 2,900 50.36
Difference (B) – (A) 500 0 900 (3,600)
Difference (%) 0.5 9.0 (55.4)
(For Reference) Actual ended
March 31, 2012
82,065 12,318 11,819 6,723 116.10

3. Reasons for revision

We now expect ordinary income to exceed the previous forecast since sales and operating income showed strong growth supported by robust sales of the flagship title “Resident Evil 5” in the Pachinko & Pachislo (P&S) business. Furthermore, there was also a contribution from foreign exchange gains.

On the other hand, net income, affected by special losses related to business restructuring, is likely to fall short of the forecast.

We expect sales of approx. 97,000 million yen, operating income of approx. 12,000 million yen, ordinary income of approx. 11,700 million yen and net income of approx. 6,800 million yen for the fiscal year ending March 2014. The forecasts are scheduled to be released along with the business results for the fiscal year ended March 2013.

4. Non-consolidated business results for the FY ended March 2013 and the difference with the previous fiscal year’s results (From April 1, 2012 to March 31, 2013)

(Millions of Yen)

  Net sales Operating income Ordinary income Net income Net income
per share
Year ended March 31, 2012 (A) 64,159 5,828 5,410 2,447 42.26
Year ended March 31, 2013 (B) 74,700 9,200 10,500 2,500 43.42
Difference (B) – (A) 10,540 3,371 5,089 52
Difference (%) 16.4 57.9 94.0 2.2

5. Reasons for the difference

Lifted by the strong performance of “Resident Evil 5”, the flagship title in the P&S business, sales are likely to be higher than the previous fiscal year. Furthermore, reflecting higher sales and foreign exchange gains, operating income and ordinary income are also expected to be higher compared with the previous fiscal year.

However, net income will likely be largely unchanged from the previous fiscal year because of special losses related to business restructuring.

Note: The above forecasts are based on information available to management as of the date of the announcement of this release. Actual results may vary due to a variety of unforeseen factors.