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Tokyo, April 21, 2008 - CSK HOLDINGS CORPORATION ("CSK") today announced the following revisions to its consolidated forecasts for the fiscal year ended March 31, 2008 (April 1, 2007 to March 31, 2008). The previous forecasts were issued on February 5, 2008.
The company also announced that it would record an extraordinary loss.
1. Consolidated forecast revisions for fiscal year ended March 31, 2008 and recording of extraordinary loss
(1) Consolidated forecast revisions (for the period from April 1, 2007 to March 31, 2008)
(million yen)
| |
Sales |
Operating
income |
Ordinary
income |
Net income |
Net income
per share |
Previous forecast (A)
(announced on Feb. 5) |
250,000 |
31,000 |
32,500 |
17,500 |
¥237.94 |
| Revised forecast (B) |
240,000 |
19,800 |
21,400 |
100 |
¥1.42 |
| Difference (B-A) |
(10,000) |
(11,200) |
(11,100) |
(17,400) |
(¥236.52) |
| Change in % |
(4.0%) |
(36.1%) |
(34.2%) |
(99.4%) |
(99.4%) |
Previous FY results
(for reference) |
245,981 |
29,904 |
30,810 |
8,679 |
(¥117.35) |
(2) Reasons
- The major decline and subsequent poor performance of the equity markets due to the global credit crunch triggered by the sub-prime problem in the United States have led to a rapid deterioration in the securities business of CSK.
- The impact of the credit crunch in Japan, also triggered by the sub-prime problem in the United States, has postponed until the following year achievement of revenue in the real estate securitization business, part of the financial services business.
- As a result of a review of the business plan with respect to operational assets currently being developed at a consolidated subsidiary of CSK, CSK has decided to take a conservative accounting approach and apply impairment accounting, and as such has recorded an extraordinary loss.
As a result of these factors, CSK estimates that sales, operating income, ordinary income and net income will be lower than the previously announced forecasts.
(3) Further details
- Sales
| • | CSK forecasts total sales of ¥240.0 billion. Sales in the IT services business have proceeded according to plan, but there has been an impact of approximately ¥7.0 billion in the real estate securitization business, which is part of the financial services business, due to revenue from projects that was expected to be recorded at the end of the current fiscal year being postponed until the following fiscal year. There has also been an impact of around ¥2.8 billion due to sales deteriorating beyond expectations in the securities business as a result of the slowdown in the equities markets. |
- Operating income
| • | CSK forecasts operating income of ¥19.8 billion, as a result of a reduction of around ¥8.0 billion in the financial services business and a reduction of around ¥3.1 billion in the securities business, due to the influence of the decline in sales and lack of progress in reducing SG&A expenses in the securities business. |
- Ordinary income
| • | CSK forecasts ordinary income of ¥21.4 billion, due to the impact of the reduction in operating income. |
- Net income (recording of extraordinary loss)
| • | In addition to the impact of approximately ¥11.1 billion in the sales, operating income and ordinary income stages, as a result of a reevaluation of investments in line with a review of the business plan with respect to operating assets at a consolidated subsidiary of CSK in the IT services business, CSK has decided to take a conservative accounting approach and record an extraordinary loss of approximately ¥13.1 billion. Due to the impact of these and other factors, CSK forecasts net income of ¥0.1 billion. |
2. Recording of non-consolidated extraordinary loss
In line with the recording of an impairment loss on the operating assets currently being developed at a subsidiary of CSK in the IT services business, CSK has decided to take a conservative accounting approach and record an appraisal loss of approximately ¥8.1 billion on shares held in that subsidiary.
Furthermore, in line with the slowdown in the equities markets, CSK has decided to make a provision of approximately ¥3.6 billion to the allowance for doubtful accounts with respect to loans made to a subsidiary in the financial services business, as a result of capital deficit at the subsidiary due to a decline in the market value of marketable securities that it holds.
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