Trends in the performance of indicator light <7368>.

1. Overview of the 2025 Fiscal Year First Half Results

For the fiscal year ending March 2025, the results showed a revenue of 4,805 million yen, a decrease of 0.1% compared to the same period last year, an operating profit of 412 million yen, an increase of 55.3% year-on-year, a recurring profit of 438 million yen, an increase of 48.5%, and a net profit of 284 million yen, an increase of 52.3%. The strong performance of the Navita business and the ad and promotion business contributed to the increase in both revenue and profit.

The main factors that led to a significant increase in profit are: 1) In the Navita business, shifting from an expansion-oriented line to a selective revenue-focused approach, resulting in reduced depreciation burden, 2) Conducting negotiations for price revisions based on the value of Navita installation locations, 3) Promoting the sale of products and services with a high proportion of internal production that can be handled in-house, 4) The solid performance of high-margin inbound web services, and 5) The completion of initial investments in new developments related to disaster prevention solutions.

The installation of Navita in municipalities and medical institutions has increased, contributing to increased revenue and profit.

2. Trends by business segment

(1) Navita Business

The revenue of the Navita business was 4,037 million yen, an increase of 1.0% compared to the same period last year, and the operating profit was 607 million yen, up 9.4% year-on-year. The number of installations at the end of the interim period was 2,409 for station Navita, 1,050 for city Navita, 153 for public Navita, 308 for medical Navita, and 149 for shrine and temple Navita. The city Navita and medical Navita performed steadily, contributing to increased revenue and profit.

The breakdown of revenue indicates that the number of installations for Shrine and Temple Navitas remained stable, but the demand for advertising in the Transportation sector has not yet recovered to pre-COVID levels, resulting in a 1.7% decrease year-on-year to 1,805 million yen for Station Navitas. City Navitas experienced a 3.7% increase to 2,043 million yen as both City Navitas and Medical Navitas expanded their installations for municipalities and Hospitals, driving the Navitas business forward. Public Navitas was nearly flat with a 0.7% decrease to 189 million yen.

(2) Ad Promotion Business

The revenue from the Ad Promotion business was 340 million yen, an increase of 12.3% year-on-year, and operating profit was 60 million yen, an increase of 212.3%. Signs of recovery in advertising demand were observed, and efforts such as expanding media advertising outside of Railroads, strengthening mass media, developing municipality business, and creating web products contributed to increased revenue and profit. Additionally, the distribution and operation management of digital signage and the strong performance of the duty-free shop search site "TAXFREESHOPS.JP" also made contributions.

(3) Sign Business

The revenue from the sign business was 426 million yen, a decrease of 16.2% year-on-year, and the operating loss was 105 million yen (compared to an operating loss of 147 million yen in the previous year). The decline in large projects had an impact, leading to decreased revenue. The reduction in operating losses was due to an increase in the handling of products and services related to digital signage, which improved profit margins, as well as the completion of development for the new disaster prevention solution "NAVI Alert," as prior investments were fully realized.

3. Financial Condition and Management Indicators

As of the end of the interim period in March 2025, total assets decreased by 109 million yen compared to the previous period, totaling 13,840 million yen. The primary factors for increases and decreases include a decline of 561 million yen in accounts receivable under current assets, while cash and deposits increased by 258 million yen and inventory increased by 23 million yen, resulting in a 3 million yen decrease in current assets to 8,688 million yen. For fixed assets, despite tangible fixed assets decreasing by 108 million yen, investments and other assets saw an increase of 3 million yen, resulting in a 105 million yen decrease to 5,152 million yen.

Total liabilities decreased by 253 million yen compared to the previous period, totaling 6,277 million yen. The primary factors for increases and decreases were in current liabilities, where accounts payable decreased by 143 million yen and unpaid amounts decreased by 75 million yen, leading to a total decrease of 262 million yen to 6,038 million yen. In fixed liabilities, the reserve for retirement benefits for Company Executives decreased by 8 million yen, while the retirement benefit reserve increased by 16 million yen, resulting in a total decrease of 9 million yen to 238 million yen. There continues to be no interest-bearing debt. Total net assets increased by 143 million yen, reaching 7,563 million yen. Retained earnings increased by 142 million yen.

Regarding the operating indicators, the equity ratio increased by 1.4 points compared to the end of the previous period to 54.6%, and there are no interest-bearing debts, which is evaluated as good financial health.

Written by Fisco Guest Analyst Takumi Hoshi.