[January 31, 2018] |
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LINE Corporation Announces Summary of Consolidated Financial Results for the Fiscal Year Ended December 31, 2017
LINE Corporation (NYSE:LN) (TOKYO:3938) announces the summary of its
consolidated financial results for the fiscal year ended December 31,
2017.
This is an English translation of the original Japanese-language
document. Should there be any inconsistency between the translation and
the original Japanese text, the latter shall prevail. All references to
the "Company," "we," "us" or "our" shall mean LINE Corporation and,
unless the context otherwise requires, its consolidated subsidiaries.
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Company name:
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LINE Corporation (Stock Code: 3938) (the "Company")
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Stock exchange on which the shares are listed:
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Tokyo Stock Exchange
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URL:
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http://linecorp.com/
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Representative:
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Takeshi Idezawa, Chief Executive Officer
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Contact:
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Kokan Ki, Executive Officer and Head of Finance and Accounting
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Telephone:
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+81-3-4316-2050
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Scheduled date of annual general meeting of shareholders: March 29,
2018
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Payment date of dividends: -
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Filing date of annual securities report: March 30, 2018
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Supplemental materials prepared on financial results: Yes
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Financial results conference scheduled: Yes (for institutional
investors and analysts)
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(Yen amounts are rounded to the nearest million, unless otherwise noted.)
1. Consolidated financial results for the fiscal year ended
December 31, 2017 (from January 1, 2017 to December 31, 2017)
(1) Consolidated operating results
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(Percentages indicate year-on-year changes.)
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Revenues
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Profit from operating activities
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Profit before income taxes
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Profit for the year
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Fiscal year ended
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Millions of yen
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%
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Millions of yen
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%
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Millions of yen
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%
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Millions of yen
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%
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December 31, 2017
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167,147
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18.8
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25,078
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26.0
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18,145
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0.9
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8,210
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15.6
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December 31, 2016
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140,704
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16.9
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19,897
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915.1
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17,990
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-
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7,104
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-
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Profit attributable to the shareholders of the Company
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Comprehensive income for the year
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Basic earnings per share
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Diluted earnings per share
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Fiscal year ended
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Millions of yen
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%
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Millions of yen
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%
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Yen
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Yen
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December 31, 2017
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8,078
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19.4
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11,743
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100.7
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36.56
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34.01
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December 31, 2016
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6,763
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-
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5,852
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-
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34.84
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31.48
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Return on equity attributable to the shareholders of the Company
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Ratio of profit before tax to total assets
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Ratio of operating profit to revenue
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Fiscal year ended
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%
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%
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%
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December 31, 2017
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4.7
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6.5
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15.0
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December 31, 2016
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7.6
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9.5
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14.1
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(Reference) Share of profit (loss) of associates accounted for
using the equity method:
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Fiscal year ended December 31, 2017
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(6,321) million yen
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Fiscal year ended December 31, 2016
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(833) million yen
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(2) Consolidated financial position
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Total assets
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Total equity
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Equity attributable to the shareholders of the Company
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Ratio of equity attributable to the shareholders of the Company
to total assets
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Equity attributable to the shareholders of the Company per
share
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As of
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Millions of yen
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Millions of yen
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Millions of yen
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%
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Yen
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December 31, 2017
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303,439
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189,977
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185,075
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61.0
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779.30
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December 31, 2016
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256,089
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161,023
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160,834
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62.8
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738.53
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(3) Consolidated cash flows
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Cash flows from operating activities
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Cash flows from investing activities
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Cash flows from financing activities
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Cash and cash equivalents at the end of the year
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Fiscal year ended
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Millions of yen
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Millions of yen
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Millions of yen
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Millions of yen
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December 31, 2017
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10,965
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(34,230)
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11,439
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123,606
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December 31, 2016
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28,753
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(34,086)
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106,628
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134,698
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2. Cash dividends
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Annual dividends per share
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Total amount of cash dividends (annual)
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Payout ratio (consolidated)
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Dividend on equity attributable to the shareholders of the
Company ratio (consolidated)
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First quarter-end
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Second quarter-end
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Third quarter-end
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Fiscal year-end
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Total
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Yen
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Yen
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Yen
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Yen
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Yen
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Millions of yen
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%
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%
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For the year ended December 31, 2016
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-
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0.00
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-
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0.00
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0.00
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-
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0.0
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0.0
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For the year ended December 31, 2017
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-
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0.00
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-
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0.00
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0.00
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-
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0.0
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0.0
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For the year ending December 31, 2018 (Forecast)
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-
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-
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-
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-
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-
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-
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3. Consolidated earnings forecasts for 2018 (from January 1, 2018 to
December 31, 2018)
Amid rapid international and domestic changes, there is a level of
uncertainty within the mobile applications market for smartphones and
other mobile devices, the main business of the Company and its
subsidiaries (collectively, the "Group"). As the state of this market
significantly impacts the Group's financial results, it is difficult to
formulate a precise earnings forecast. Furthermore, as the Company's
shares are listed on the New York Stock Exchange as well as the Tokyo
Stock Exchange, we are also carefully considering risks relating to U.S.
securities regulations. Accordingly, an announcement concerning earnings
forecasts is not made at this time.
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Notes
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(1)
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Changes in significant subsidiaries during the fiscal year ended
December 31, 2017 (changes in specified subsidiaries resulting in
change in scope of consolidation): None
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(2)
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Changes in accounting policies and estimates
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a.
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Changes in accounting policies due to revisions in accounting
standards under IFRS: None
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b.
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Changes in accounting policies due to other reasons: None
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c.
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Changes in accounting estimates: None
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(3)
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Number of shares issued and outstanding (common stock)
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a.
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Total number of common shares issued and outstanding at the end of
the fiscal year (including treasury shares)
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As of December 31, 2017
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238,496,810 shares
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As of December 31, 2016
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217,775,500 shares
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b.
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Number of treasury shares at the end of the fiscal year
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As of December 31, 2017
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1,007,710 shares
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As of December 31, 2016
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- shares
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c.
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Average number of common shares outstanding during the fiscal year
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For the fiscal year ended December 31, 2017
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220,945,548 shares
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For the fiscal year ended December 31, 2016
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150,693,608 shares
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Note:
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As of December 31, 2015, the Company had issued 174,992,000 class A
shares. However, through an amendment to its articles of
incorporation effective as of March 31, 2016, the Company terminated
its dual class structure and converted all class A shares into
common shares. The average number of class A shares outstanding
during the fiscal year ended December 31, 2016 was 43,390,387. The
combined average number of common shares and class A shares
outstanding for the fiscal year ended December 31, 2016 was
194,083,995.
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(Reference) Separate financial results for the fiscal year ended
December 31, 2017 (from January 1, 2017 to December 31, 2017) under
Japanese GAAP
(Yen amounts are rounded down to the nearest million, unless otherwise
noted.)
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(1) Separate operating results
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(Percentages indicate year-on-year changes.)
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Revenues
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Profit from operating activities
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Profit from ordinary activities
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Profit for the year
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Fiscal year ended
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Millions of yen
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%
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Millions of yen
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%
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Millions of yen
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%
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Millions of yen
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%
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December 31, 2017
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125,929
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17.7
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13,848
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59.9
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14,157
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44.4
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7,733
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206.2
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December 31, 2016
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107,032
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21.0
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8,661
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134.4
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9,806
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182.4
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2,525
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-
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Basic earnings per share
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Diluted earnings per share
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Fiscal year ended
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Yen
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Yen
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December 31, 2017
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35.00
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32.56
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December 31, 2016
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13.01
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11.75
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(2) Separate financial position
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Total assets
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Net assets
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Equity ratio
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Net assets per share
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As of
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Millions of yen
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Millions of yen
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%
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Yen
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December 31, 2017
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265,517
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185,332
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67.7
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756.39
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December 31, 2016
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237,786
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164,229
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61.6
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672.78
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(Reference) Equity:
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Fiscal year ended December 31, 2017
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179,633 million yen
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Fiscal year ended December 31, 2016
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146,515 million yen
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Reasons for variance between separate financial results for the fiscal
years ended December 31, 2017 and 2016
Revenues, profit from operating activities, profit from ordinary
activities, and profit for the year ended December 31, 2017 increased
significantly as a result of the significant growth in "performance ads"
such as Timeline Ads and LINE News Ads provided through the LINE
advertising platform, the performance-based advertising platform we
operate.
* Information regarding the audit procedures
This summary financial results report is not subject to the audit
procedures in accordance with the Financial Instruments and Exchange Act.
* Cautionary statement with respect to
forward-looking statements, and other information
This document contains forward-looking statements with respect to the
current plans, estimates, strategies and beliefs of the Company.
Forward-looking statements include, but are not limited to, those
statements using words such as "anticipate," "believe," "continue,"
"expect," "estimate," "intend," "project" and similar expressions and
future or conditional verbs such as "will," "would," "should," "could,"
"might," "can," "may," or similar expressions generally intended to
identify forward-looking statements. These forward-looking statements
are based on information currently available to the Company, speak only
as of the date hereof and are based on the Company's current plans and
expectations and are subject to a number of known and unknown
uncertainties and risks, many of which are beyond the Company's control.
As a consequence, current plans, anticipated actions and future
financial position and results of operations may differ significantly
from those expressed in any forward-looking statements in the document.
You are cautioned not to unduly rely on such forward-looking statements
when evaluating the information presented and the Company does not
intend to update any of these forward-looking statements. Risks and
uncertainties that might affect the Company include, but are not limited
to:
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i.
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its ability to attract and retain users and increase the level of
engagement of its users;
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ii.
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its ability to improve user monetization;
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iii.
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its ability to successfully enter new markets and manage its
business expansion;
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iv.
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its ability to compete in the global social network services market;
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v.
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its ability to develop or acquire new products and services, improve
its existing products and services and increase the value of its
products and services in a timely and cost-effective manner;
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vi.
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its ability to maintain good relationships with platform partners
and attract new platform partners;
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vii.
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its ability to attract advertisers to the LINE platform and increase
the amount that advertisers spend with LINE;
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viii.
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its expectations regarding its user growth rate and the usage of its
mobile applications;
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ix.
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its ability to increase revenues and its revenue growth rate;
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x.
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its ability to timely and effectively scale and adapt its existing
technology and network infrastructure;
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xi.
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its ability to successfully acquire and integrate companies and
assets;
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xii.
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its future business development, results of operations and financial
condition;
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xiii.
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the regulatory environment in which it operates;
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xiv.
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fluctuations in currency exchange rates and changes in the
proportion of its revenues and expenses denominated in foreign
currencies; and
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xv.
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changes in business or macroeconomic conditions.
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Index
1. Overview of operating results and others 2. Basic approach
to the selection of accounting standards 3. Consolidated financial
statements - unaudited
1. Overview of operating results and others
(1) Overview of operating results for the fiscal year
In the fiscal year ended December 31, 2017 (from January 1, 2017 to
December 31, 2017), despite continuing geopolitical risk related to
North Korea and the Middle East, there were no exceptional monetary
policy surprises in various countries, and the global economy remained
stable. In addition, exports in Thailand and Taiwan, countries with
which the Company has close relationships, were robust, and both
countries continued to record positive GDP growth. Meanwhile, the
Japanese economy showed signs of recovery in exports in industries such
as the IT industry, firm improvement in employment rates and personal
income levels, while personal spending showed moderate improvement.
Amid such circumstances, in the internet industry in which the Group is
engaged, the total number of mobile phone shipments in Japan is forecast
to be 37.4 million for the period from April 2017 to March 2018, an
increase of 2.5% year on year. During the same period, the ratio of
smartphones to the total number of mobile phone shipments in Japan is
forecast to reach 84.8%, an increase of 2.2 percentage points year on
year. Although the overall number of mobile phone shipments has hit a
ceiling, there was an increase in users switching from feature phones to
smartphones and an increase in the number of SIM-free smartphones.
Current estimates suggest that the number of smartphone contracts in
Japan will exceed 100 million by FY 2018, and the mobile internet market
is expected to continue to grow on the back of this expansion. (Source:
MM Research Institute, Overview of domestic mobile phone shipments for
FY 2017).
In this business environment, the Group actively moved forward with
business development focused on the LINE business and portal segment. As
of December 31, 2017, MAUs* in our four key countries (Japan, Taiwan,
Thailand and Indonesia) had reached 167.5 million, a year-on-year
increase of 0.3%.
* Monthly Active Users ("MAUs") in a given month refers to the number of
user accounts that (i) accessed the LINE messaging application or any
LINE Games through mobile devices; (ii) sent messages through the LINE
messaging application from personal computers; or (iii) sent messages
through any other LINE application from mobile devices, in each case at
least once during that month.
Revenues
The Group's revenues from continuing operations from its major services
in the fiscal years ended December 31, 2016 and 2017, are as follows:
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(In millions of yen)
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For the fiscal year ended December 31,
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2016
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2017
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LINE business and portal segment
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Communication and content
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Communication(1)
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29,290
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30,225
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Content(2)
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44,784
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40,144
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Others(3)
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11,923
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20,241
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Sub-total
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85,997
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90,610
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Advertising
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LINE advertising(4)
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44,521
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66,104
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Portal advertising
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10,186
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10,433
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Sub-total
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54,707
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76,537
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Total
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140,704
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167,147
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(1)
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Revenues from communication increased mainly due to the steady
growth of Creators' Themes, as well as an increase in the number of
new stickers available due to a shortening of the time needed for
stickers to pass the review process and enhancement of products by
popular creators of Creators' stickers.
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(2)
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Revenues from content decreased mainly due to a decrease in revenues
generated by the LINE Games business as a result of fewer new title
releases, although we are steadily promoting existing services such
as LINE Manga, LINE Fortune and LINE MUSIC.
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(3)
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Revenues from others saw the expansion of LINE Friends service
outlets overseas, primarily in Asia, as well as a steady growth of
LINE Mobile, which was launched in September 2016. Furthermore, LINE
Pay posted significant growth, particularly in Taiwan.
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(4)
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In LINE advertising, in addition to substantial growth of
"performance ads" (Timeline and LINE NEWS etc.), "messenger ads"
(LINE@) also grew, contributing to an increase in revenues.
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Profit from operating activities
Profit from operating activities consists of revenues and other
operating income reduced by operating expenses. In the fiscal year ended
December 31, 2017, other operating income included 10,444 million yen in
gain on transfer of business resulting from the restructuring of our
camera application business. With respect to operating expenses, while
partially offset by a decrease in share-based payment expenses, employee
compensation expenses increased due mainly to headcount growth in
accordance with our business expansion. Marketing expenses increased due
mainly to the active running of TV commercials for LINE Mobile and cloud
AI platform "Clova". Authentication and other service expenses increased
due mainly to additional network costs for LINE Mobile to serve an
increasing number of users. Depreciation expenses of furniture and
fixtures which were newly purchased increased due mainly to the
relocation of our headquarter offices. And other operating expenses
increased due mainly to rent payments for the new headquarter offices
and cost of goods sold for Clova and LINE Friends. Accordingly, the
Group recorded operating expenses of 154,080 million yen, a year-on-year
increase of 21.6%.
As a result, for the fiscal year ended December 31, 2017, the Group
recorded a profit from operating activities of 25,078 million yen, a
year-on-year increase of 26.0%.
Profit for the year from continuing operations
The Group recorded profit before tax from continuing operations of
18,145 million yen in the fiscal year ended December 31, 2017, a 0.9%
increase year on year. The main factors of increase were an increase in
profit from operating activities and an increase in other non-operating
income due to the revaluation of conversion right and redemption right
of preferred stock. The main factors of decrease were an increase in
share of loss of associates and joint ventures mainly related to the
Group's interest in Snow Corporation, an increase in loss on foreign
currency transactions, net, and an increase in other non-operating
expenses due to the impairment loss for available-for-sale financial
assets. On an after-tax basis, profit for the year from continuing
operations was 8,223 million yen in the fiscal year ended December 31,
2017, a decrease of 9.5% year on year. The effective tax rate for the
fiscal year ended December 31, 2017 of 54.7% differed from the Japanese
statutory tax rate of 31.7% for the year ended December 31, 2017. The
effective income tax rate of 54.7% was primarily due to pre-tax losses
recorded by some subsidiaries on a standalone basis and recognition of
share of loss on associates and joint ventures for which no deferred tax
assets were recognized as the related tax benefits could not be
recognized. The effective tax rate for the fiscal year ended December
31, 2016 was 49.5%. The effective tax rate of the fiscal year ended
December 31, 2017 increased to 54.7% from the effective tax rate of the
fiscal year ended December 31, 2016 of 49.5% due mainly to an increase
in the share of loss of associates and joint ventures.
Profit for the year
Loss for the year from discontinued operations related to the MixRadio
business, which existed in the fiscal year ended December 31, 2016,
decreased. Therefore, after subtracting the loss for the year from
discontinued operations, profit for the year was 8,210 million yen in
the fiscal year ended December 31, 2017, an increase of 15.6% year on
year. Profit attributable to the shareholders of the Company was 8,078
million yen in the fiscal year ended December 31, 2017, an increase of
19.4% year on year.
(2) Overview of financial position for the fiscal year
Regarding the financial position of the Group as of December 31, 2017,
total assets of the Group increased by 47,350 million yen compared to
the end of the fiscal year ended December 31, 2016 to 303,439 million
yen. The main factors of increase were a 14,725 million yen increase in
trade and other receivables due to an increase in revenues, a 13,367
million yen increase in goodwill resulting from acquisition of
subsidiaries, and a 12,132 million yen increase in investments in
associates and joint ventures mainly due to the acquisition of
additional shares of Snow Corporation, an associate of the Group, in
exchange for the camera application business, while the main factor of
decrease was a 11,092 million yen decrease in cash and cash equivalents.
Total liabilities increased by 18,396 million yen to 113,462 million yen
as of December 31, 2017. The main factors of increase were a 7,278
million yen increase in trade and other payables due to increased costs
associated with the expansion of businesses and a 6,689 million yen
increase in advances received mainly due to an increase in unused LINE
Points.
Total shareholders' equity increased by 28,954 million yen to 189,977
million yen as of December 31, 2017. The main factors of increase were a
14,513 million yen increase in share capital, recognition of 8,078
million yen of profit attributable to the shareholders of the Company in
the fiscal year ended December 31, 2017, and a 2,352 million yen
increase in share premium mainly due to the exercise of stock options.
(3) Overview of cash flow position for the fiscal year
The balance of cash and cash equivalents (hereinafter, "cash") as of
December 31, 2017 decreased by 11,092 million yen from the end of the
fiscal year ended December 31, 2016 to 123,606 million yen. The
respective cash flow positions are as follows.
Cash flows from operating activities Net cash provided by operating
activities was 10,965 million yen in the fiscal year ended December 31,
2017, compared to net cash provided by operating activities of 28,753
million yen in the fiscal year ended December 31, 2016. The cash
inflows, and related adjustments for non-cash items and changes in
working capital, in the fiscal year ended December 31, 2017 are
primarily related to recognition of profit before tax from continuing
operations of 18,145 million yen, recognition of depreciation and
amortization expenses of 7,149 million yen, recognition of share of loss
of associates and joint ventures of 6,321 million yen, an increase of
6,338 million yen in advances received, and an increase of 6,215 million
yen in trade and other payables. The cash outflows, and related
adjustments for non-cash items and changes in working capital, in the
fiscal year ended December 31, 2017 are primarily related to recognition
of gain on loss of control of subsidiaries and business transfer of
10,444 million yen, an increase of 13,539 million yen in trade and other
receivables, and income taxes paid of 12,421 million yen.
Cash flows from investing activities Net cash used in investing
activities was 34,230 million yen in the fiscal year ended December 31,
2017, compared to net cash used in investing activities of 34,086
million yen in the fiscal year ended December 31, 2016. Factors
affecting the cash flows in the fiscal year ended December 31, 2017 are
primarily related to acquisition of property and equipment and
intangible assets of 12,622 million yen, acquisition of subsidiaries and
businesses, net of cash acquired of 11,887 million yen, and investments
in debt instruments of 6,433 million yen.
Cash flows from financing activities Net cash provided by financing
activities was 11,439 million yen in the fiscal year ended December 31,
2017, compared to net cash provided by financing activities of 106,628
million yen in the fiscal year ended December 31, 2016. The cash inflows
in the fiscal year ended December 31, 2017 are primarily related to
11,489 million yen in exercise of stock options.
(4) Forecasts for the next quarter
The Group's revenues for the first quarter of FY 2018 (January 1, 2018
to March 31, 2018), driven by the steady growth of revenues from
advertising services, are expected to be higher compared to the
corresponding period of 2017. Specifically, in LINE advertising, in
addition to revenues from LINE Official Accounts, revenues from
"messenger ads" following the steady growth of LINE@ accounts both in
domestic and overseas markets as well as revenues from "performance ads"
following the enhancement of the LINE advertising platform are expected
to contribute to revenue growth. With respect to content distribution,
the Group expects to continue to generate steady revenues, mainly
because the Group plans to appropriately update existing titles as well
as the titles launched at the end of FY 2017 and to implement marketing
activities. At the same time, the Group expects to continue to generate
steady revenues in communication from activities such as the "New Year's
gift stickers" and other seasonal events.
In the first quarter of FY 2018, operating expenses are expected to
increase following our active investments in Clova, LINE Pay service and
other new business opportunities.
2. Basic approach to the selection of accounting standards
The Group has adopted International Financial Reporting Standards
("IFRS") to increase the international comparability of its financial
information and to improve the convenience in capital markets.
3. Consolidated Financial Statements - Unaudited
(1) Consolidated Statement of Financial Position - Unaudited
|
|
(In millions of yen)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016
|
|
December 31, 2017
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
134,698
|
|
|
|
123,606
|
|
Trade and other receivables
|
|
|
|
|
|
|
28,167
|
|
|
|
42,892
|
|
Other financial assets, current
|
|
|
|
|
|
|
6,952
|
|
|
|
13,258
|
|
Inventories
|
|
|
|
|
|
|
961
|
|
|
|
3,455
|
|
Other current assets
|
|
|
|
|
|
|
3,929
|
|
|
|
7,438
|
|
Total current assets
|
|
|
|
|
|
|
174,707
|
|
|
|
190,649
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment
|
|
|
|
|
|
|
9,029
|
|
|
|
15,125
|
|
Goodwill
|
|
|
|
|
|
|
3,400
|
|
|
|
16,767
|
|
Other intangible assets
|
|
|
|
|
|
|
1,851
|
|
|
|
6,486
|
|
Investments in associates and joint ventures
|
|
|
|
|
|
|
12,712
|
|
|
|
24,844
|
|
Other financial assets, non-current
|
|
|
|
|
|
|
35,715
|
|
|
|
32,084
|
|
Deferred tax assets
|
|
|
|
|
|
|
18,385
|
|
|
|
16,492
|
|
Other non-current assets
|
|
|
|
|
|
|
290
|
|
|
|
992
|
|
Total non-current assets
|
|
|
|
|
|
|
81,382
|
|
|
|
112,790
|
|
Total assets
|
|
|
|
|
|
|
256,089
|
|
|
|
303,439
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
|
|
|
|
21,532
|
|
|
|
28,810
|
|
Other financial liabilities, current
|
|
|
|
|
|
|
24,497
|
|
|
|
28,003
|
|
Accrued expenses
|
|
|
|
|
|
|
9,049
|
|
|
|
12,087
|
|
Income tax payables
|
|
|
|
|
|
|
5,699
|
|
|
|
2,365
|
|
Advances received
|
|
|
|
|
|
|
11,286
|
|
|
|
17,975
|
|
Deferred revenue
|
|
|
|
|
|
|
9,739
|
|
|
|
9,246
|
|
Provisions, current
|
|
|
|
|
|
|
964
|
|
|
|
991
|
|
Other current liabilities
|
|
|
|
|
|
|
3,670
|
|
|
|
1,940
|
|
Total current liabilities
|
|
|
|
|
|
|
86,436
|
|
|
|
101,417
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial liabilities, non-current
|
|
|
|
|
|
|
-
|
|
|
|
602
|
|
Deferred tax liabilities
|
|
|
|
|
|
|
1,161
|
|
|
|
1,573
|
|
Provisions, non-current
|
|
|
|
|
|
|
1,120
|
|
|
|
3,060
|
|
Post-employment benefits
|
|
|
|
|
|
|
6,204
|
|
|
|
6,162
|
|
Other non-current liabilities
|
|
|
|
|
|
|
145
|
|
|
|
648
|
|
Total non-current liabilities
|
|
|
|
|
|
|
8,630
|
|
|
|
12,045
|
|
Total liabilities
|
|
|
|
|
|
|
95,066
|
|
|
|
113,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
|
|
|
|
77,856
|
|
|
|
92,369
|
|
Share premium
|
|
|
|
|
|
|
91,208
|
|
|
|
93,560
|
|
Treasury shares
|
|
|
|
|
|
|
-
|
|
|
|
(4,000
|
)
|
Accumulated deficit
|
|
|
|
|
|
|
(12,381
|
)
|
|
|
(4, 294
|
)
|
Accumulated other comprehensive income
|
|
|
|
|
|
|
4,151
|
|
|
|
7,440
|
|
Equity attributable to the shareholders of the Company
|
|
|
|
|
|
|
160,834
|
|
|
|
185,075
|
|
Non-controlling interests
|
|
|
|
|
|
|
189
|
|
|
|
4,902
|
|
Total shareholders' equity
|
|
|
|
|
|
|
161,023
|
|
|
|
189,977
|
|
Total liabilities and shareholders' equity
|
|
|
|
|
|
|
256,089
|
|
|
|
303,439
|
|
|
(2) Consolidated Statement of Profit or Loss - Unaudited
|
|
(In millions of yen)
|
|
|
|
|
|
|
|
|
|
2016
|
|
2017
|
|
Revenues and other operating income:
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
140,704
|
|
|
|
167,147
|
|
Other operating income
|
|
|
|
|
|
|
|
|
|
|
5,892
|
|
|
|
12,011
|
|
Total revenues and other operating income
|
|
|
|
|
|
|
|
|
|
|
146,596
|
|
|
|
179,158
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment processing and licensing expenses
|
|
|
|
|
|
|
|
|
|
|
(29,781
|
)
|
|
|
(29,589
|
)
|
Employee compensation expenses
|
|
|
|
|
|
|
|
|
|
|
(39,445
|
)
|
|
|
(42,469
|
)
|
Marketing expenses
|
|
|
|
|
|
|
|
|
|
|
(11,833
|
)
|
|
|
(15,477
|
)
|
Infrastructure and communication expenses
|
|
|
|
|
|
|
|
|
|
|
(7,770
|
)
|
|
|
(9,087
|
)
|
Authentication and other service expenses
|
|
|
|
|
|
|
|
|
|
|
(14,394
|
)
|
|
|
(24,906
|
)
|
Depreciation and amortization expenses
|
|
|
|
|
|
|
|
|
|
|
(5,100
|
)
|
|
|
(7,149
|
)
|
Other operating expenses
|
|
|
|
|
|
|
|
|
|
|
(18,376
|
)
|
|
|
(25,403
|
)
|
Total operating expenses
|
|
|
|
|
|
|
|
|
|
|
(126,699
|
)
|
|
|
(154,080
|
)
|
Profit from operating activities
|
|
|
|
|
|
|
|
|
|
|
19,897
|
|
|
|
25,078
|
|
Finance income
|
|
|
|
|
|
|
|
|
|
|
87
|
|
|
|
257
|
|
Finance costs
|
|
|
|
|
|
|
|
|
|
|
(65
|
)
|
|
|
(26
|
)
|
Share of loss of associates and joint ventures
|
|
|
|
|
|
|
|
|
|
|
(833
|
)
|
|
|
(6,321
|
)
|
Loss on foreign currency transactions, net
|
|
|
|
|
|
|
|
|
|
|
(43
|
)
|
|
|
(818
|
)
|
Other non-operating income
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
|
1,963
|
|
Other non-operating expenses
|
|
|
|
|
|
|
|
|
|
|
(1,062
|
)
|
|
|
(1,988
|
)
|
Profit before tax from continuing operations
|
|
|
|
|
|
|
|
|
|
|
17,990
|
|
|
|
18,145
|
|
Income tax expenses
|
|
|
|
|
|
|
|
|
|
|
(8,904
|
)
|
|
|
(9,922
|
)
|
Profit for the year from continuing operations
|
|
|
|
|
|
|
|
|
|
|
9,086
|
|
|
|
8,223
|
|
Loss from discontinued operations, net of tax
|
|
|
|
|
|
|
|
|
|
|
(1,982
|
)
|
|
|
(13
|
)
|
Profit for the year
|
|
|
|
|
|
|
|
|
|
|
7,104
|
|
|
|
8, 210
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The shareholders of the Company
|
|
|
|
|
|
|
|
|
|
|
6,763
|
|
|
|
8,078
|
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
341
|
|
|
|
132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In yen)
|
|
Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic profit for the year attributable to the shareholders of the
Company
|
|
|
|
|
|
|
|
|
|
|
34.84
|
|
|
|
36.56
|
|
Diluted profit for the year attributable to the shareholders of the
Company
|
|
|
|
|
|
|
|
|
|
|
31.48
|
|
|
|
34.01
|
|
Earnings per share from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic profit from continuing operations attributable to the
shareholders of the Company
|
|
|
|
|
|
|
|
|
|
|
45.05
|
|
|
|
36.62
|
|
Diluted profit from continuing operations attributable to the
shareholders of the Company
|
|
|
|
|
|
|
|
|
|
|
40.70
|
|
|
|
34.06
|
|
Earnings per share from discontinued operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss from discontinued operations attributable to the
shareholders of the Company
|
|
|
|
|
|
|
|
|
|
|
(10.21
|
)
|
|
|
(0.06
|
)
|
Diluted loss from discontinued operations attributable to the
shareholders of the Company
|
|
|
|
|
|
|
|
|
|
|
(9.22
|
)
|
|
|
(0.05
|
)
|
|
(3) Consolidated Statement of Comprehensive Income - Unaudited
|
|
|
|
(In millions of yen)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2017
|
|
Profit for the year
|
|
|
|
|
|
|
|
|
|
7,104
|
|
|
|
8,210
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Items that will not be reclassified to profit or loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remeasurement of defined benefit plans
|
|
|
|
|
|
|
|
|
|
|
674
|
|
|
|
2,093
|
|
Income tax relating to items that will not be reclassified to profit
or loss
|
|
|
|
|
|
|
|
|
|
|
(209
|
)
|
|
|
(488
|
)
|
Items that may be reclassified to profit or loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale financial assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net changes in fair value
|
|
|
|
|
|
|
|
|
|
|
(2,019
|
)
|
|
|
(3,339
|
)
|
Reclassification to profit or loss
|
|
|
|
|
|
|
|
|
|
|
293
|
|
|
|
1,090
|
|
Exchange differences on translation of foreign operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)/gain arising during the year
|
|
|
|
|
|
|
|
|
|
|
(299
|
)
|
|
|
3,751
|
|
Reclassification to profit or loss
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|
|
(13
|
)
|
Proportionate share of other comprehensive income of associates and
joint ventures
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
|
106
|
|
Income tax relating to items that may be reclassified subsequently
to profit or loss
|
|
|
|
|
|
|
|
|
|
|
255
|
|
|
|
333
|
|
Total other comprehensive income for the year, net of tax
|
|
|
|
|
|
|
|
|
|
|
(1,252
|
)
|
|
|
3,533
|
|
Total comprehensive income for the year, net of tax
|
|
|
|
|
|
|
|
|
|
|
5,852
|
|
|
|
11,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The shareholders of the Company
|
|
|
|
|
|
|
|
|
|
|
5,546
|
|
|
|
11,365
|
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
306
|
|
|
|
378
|
|
|
(4) Consolidated Statement of Change in Equity - Unaudited
|
|
(In millions of yen)
|
|
|
|
|
Equity attributable to the shareholders of the Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
Share premium
|
|
|
Accumulated deficit
|
|
|
Foreign currency translation reserve
|
|
|
Available-for- sale reserve
|
|
|
Defined benefit plan reserve
|
|
|
Total
|
|
|
Non- controlling interests
|
|
|
Total shareholders' equity
|
|
Balance at January 1, 2016
|
|
|
|
|
12,596
|
|
|
|
18,983
|
|
|
|
(19,204
|
)
|
|
|
240
|
|
|
|
6,917
|
|
|
|
(1,789
|
)
|
|
|
17,743
|
|
|
|
(210
|
)
|
|
|
17,533
|
|
Comprehensive income/(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,763
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,763
|
|
|
|
341
|
|
|
|
7,104
|
|
Other comprehensive income
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(414
|
)
|
|
|
(1,268
|
)
|
|
|
465
|
|
|
|
(1,217
|
)
|
|
|
(35
|
)
|
|
|
(1,252
|
)
|
Total comprehensive income/ (loss) for the year
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,763
|
|
|
|
(414
|
)
|
|
|
(1,268
|
)
|
|
|
465
|
|
|
|
5,546
|
|
|
|
306
|
|
|
|
5,852
|
|
Recognition of share-based payments
|
|
|
|
|
-
|
|
|
|
9,520
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9,520
|
|
|
|
-
|
|
|
|
9,520
|
|
Forfeiture of stock options
|
|
|
|
|
-
|
|
|
|
(60
|
)
|
|
|
60
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Exercise of stock options
|
|
|
|
|
1,836
|
|
|
|
(88
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,748
|
|
|
|
-
|
|
|
|
1,748
|
|
Acquisition of subsidiary
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
93
|
|
|
|
93
|
|
Initial public offering
|
|
|
|
|
63,424
|
|
|
|
62,853
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
126,277
|
|
|
|
-
|
|
|
|
126,277
|
|
Other
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0
|
|
|
|
0
|
|
Balance at December 31, 2016
|
|
|
|
|
77,856
|
|
|
|
91,208
|
|
|
|
(12,381
|
)
|
|
|
(174
|
)
|
|
|
5,649
|
|
|
|
(1,324
|
)
|
|
|
160,834
|
|
|
|
189
|
|
|
|
161,023
|
|
|
|
|
|
|
Equity attributable to the shareholders of the Company
|
|
(In millions of yen)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive income
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
|
|
Share premium
|
|
|
Treasury shares
|
|
|
Accumulated deficit
|
|
|
Foreign currency translation reserve
|
|
|
Available-for- sale reserve
|
|
|
Defined benefit plan reserve
|
|
|
Total
|
|
|
Non- controlling interests
|
|
|
Total shareholders' equity
|
Balance at January 1, 2017
|
|
|
|
|
77,856
|
|
|
|
91,208
|
|
|
|
|
-
|
|
|
|
|
(12,381
|
)
|
|
|
|
(174
|
)
|
|
|
|
5,649
|
|
|
|
|
(1,324
|
)
|
|
|
|
160,834
|
|
|
|
|
189
|
|
|
|
161,023
|
|
Comprehensive income/(loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
8,078
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
8,078
|
|
|
|
|
132
|
|
|
|
8,210
|
|
Other comprehensive income
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
3,328
|
|
|
|
|
(1,721
|
)
|
|
|
|
1,680
|
|
|
|
|
3,287
|
|
|
|
|
246
|
|
|
|
3,533
|
|
Total comprehensive income/(loss) for the year
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
8,078
|
|
|
|
|
3,328
|
|
|
|
|
(1,721
|
)
|
|
|
|
1,680
|
|
|
|
|
11,365
|
|
|
|
|
378
|
|
|
|
11,743
|
|
Recognition of share-based payments
|
|
|
|
|
-
|
|
|
|
1,882
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
1,882
|
|
|
|
|
-
|
|
|
|
1,882
|
|
Forfeiture of stock options
|
|
|
|
|
-
|
|
|
|
(9
|
)
|
|
|
|
-
|
|
|
|
|
9
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
-
|
|
Exercise of stock options
|
|
|
|
|
12,513
|
|
|
|
(1,088
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
11,425
|
|
|
|
|
-
|
|
|
|
11,425
|
|
Acquisition of subsidiary
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
4,168
|
|
|
|
4,168
|
|
Acquisition of non-controlling interests
|
|
|
|
|
-
|
|
|
|
(423
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
4
|
|
|
|
|
-
|
|
|
|
|
(2
|
)
|
|
|
|
(421
|
)
|
|
|
|
167
|
|
|
|
(254
|
)
|
Issuance of common shares and acquisition of treasury shares under
Employee Stock Ownership Plan
|
|
|
|
|
2,000
|
|
|
|
1,990
|
|
|
|
|
(4,000
|
)
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(10
|
)
|
|
|
|
-
|
|
|
|
(10
|
)
|
Balance at December 31, 2017
|
|
|
|
|
92,369
|
|
|
|
93,560
|
|
|
|
|
(4,000
|
)
|
|
|
|
(4,294
|
)
|
|
|
|
3,158
|
|
|
|
|
3,928
|
|
|
|
|
354
|
|
|
|
|
185,075
|
|
|
|
|
4,902
|
|
|
|
189,977
|
|
|
|
(5) Consolidated Statements of Cash Flows - Unaudited
|
|
|
|
(In millions of yen)
|
|
|
|
2016
|
|
2017
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
Profit before tax from continuing operations
|
|
|
|
17,990
|
|
|
|
18,145
|
|
Loss before tax from discontinued operations
|
|
|
|
(2,726
|
)
|
|
|
(19
|
)
|
Profit before tax
|
|
|
|
15,264
|
|
|
|
18,126
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
Depreciation and amortization expenses
|
|
|
|
5,100
|
|
|
|
7,149
|
|
Finance income
|
|
|
|
(87
|
)
|
|
|
(257
|
)
|
Finance costs
|
|
|
|
65
|
|
|
|
26
|
|
Dividend income
|
|
|
|
-
|
|
|
|
(69
|
)
|
Share-based compensation expenses
|
|
|
|
9,519
|
|
|
|
2,686
|
|
Gain on loss of control of subsidiaries and business transfer
|
|
|
|
(1,731
|
)
|
|
|
(10,444
|
)
|
Loss/(gain) on financial assets at fair value through profit or loss
|
|
|
|
656
|
|
|
|
(1,026
|
)
|
Gain on disposal of property and equipment and intangible assets
|
|
|
|
(2,345
|
)
|
|
|
-
|
|
Impairment loss of other intangible assets
|
|
|
|
-
|
|
|
|
214
|
|
Impairment loss of available-for-sale financial assets
|
|
|
|
293
|
|
|
|
1,761
|
|
Gain on sales of available-for-sale financial assets
|
|
|
|
-
|
|
|
|
(751
|
)
|
Share of loss of associates and joint ventures
|
|
|
|
833
|
|
|
|
6,321
|
|
Loss/(gain) on foreign currency transactions, net
|
|
|
|
514
|
|
|
|
(182
|
)
|
Changes in:
|
|
|
|
|
|
|
|
|
Trade and other receivables
|
|
|
|
(756
|
)
|
|
|
(13,539
|
)
|
Inventories
|
|
|
|
407
|
|
|
|
(2,366
|
)
|
Trade and other payables
|
|
|
|
(1,620
|
)
|
|
|
6,215
|
|
Accrued expenses
|
|
|
|
2,229
|
|
|
|
2,642
|
|
Advances received
|
|
|
|
1,762
|
|
|
|
6,338
|
|
Deferred revenue
|
|
|
|
1,931
|
|
|
|
(700
|
)
|
Provisions
|
|
|
|
297
|
|
|
|
187
|
|
Post-employment benefits
|
|
|
|
1,339
|
|
|
|
2,054
|
|
Other current assets
|
|
|
|
(1,780
|
)
|
|
|
(2,860
|
)
|
Other current liabilities
|
|
|
|
4,148
|
|
|
|
1,311
|
|
Others
|
|
|
|
205
|
|
|
|
232
|
|
Cash provided by operating activities
|
|
|
|
36,243
|
|
|
|
23,068
|
|
Interest received
|
|
|
|
86
|
|
|
|
252
|
|
Interest paid
|
|
|
|
(58
|
)
|
|
|
(32
|
)
|
Dividend received
|
|
|
|
4
|
|
|
|
98
|
|
Income taxes paid
|
|
|
|
(7,522
|
)
|
|
|
(12,421
|
)
|
Net cash provided by operating activities
|
|
|
|
28,753
|
|
|
|
10,965
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
Purchases of time deposits
|
|
|
|
(10,790
|
)
|
|
|
(1,282
|
)
|
Proceeds from maturities of time deposits
|
|
|
|
377
|
|
|
|
401
|
|
Purchase of equity investments
|
|
|
|
(1,245
|
)
|
|
|
(4,880
|
)
|
Proceeds from sales of equity investments
|
|
|
|
-
|
|
|
|
1,672
|
|
Purchase of debt instruments
|
|
|
|
(7,642
|
)
|
|
|
(6,433
|
)
|
Proceeds from redemption of debt instruments
|
|
|
|
-
|
|
|
|
5,209
|
|
Acquisition of property and equipment and intangible assets
|
|
|
|
(6,352
|
)
|
|
|
(12,622
|
)
|
Proceeds from disposal of property and equipment and intangible
assets
|
|
|
|
5,124
|
|
|
|
472
|
|
Investments in associates and joint ventures
|
|
|
|
(9,333
|
)
|
|
|
(5,566
|
)
|
Payments of office security deposits
|
|
|
|
(2,533
|
)
|
|
|
(1,112
|
)
|
Refund of office security deposits
|
|
|
|
168
|
|
|
|
1,581
|
|
Return of the office security deposits received under sublease
agreement
|
|
|
|
(8
|
)
|
|
|
(19
|
)
|
Payments of the guarantee deposits for the Japanese Payment Services
Act
|
|
|
|
(1,815
|
)
|
|
|
(530
|
)
|
Return of the guarantee deposits for the Japanese Payment Services
Act
|
|
|
|
900
|
|
|
|
3,340
|
|
Acquisition of subsidiaries and businesses, net of cash acquired
|
|
|
|
(423
|
)
|
|
|
(11,887
|
)
|
Cash disposed on loss of control of subsidiary and business transfer
|
|
|
|
(485
|
)
|
|
|
(581
|
)
|
Payments for loan receivables
|
|
|
|
(2
|
)
|
|
|
(2,165
|
)
|
Collection of loan receivables
|
|
|
|
-
|
|
|
|
124
|
|
Others
|
|
|
|
(27
|
)
|
|
|
48
|
|
Net cash used in investing activities
|
|
|
|
(34,086
|
)
|
|
|
(34,230
|
)
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Repayment of short-term borrowings, net
|
|
|
|
(20,752
|
)
|
|
|
(107
|
)
|
Payments for redemption of bonds
|
|
|
|
(510
|
)
|
|
|
-
|
|
Payments of common shares issuance costs
|
|
|
|
(706
|
)
|
|
|
(30
|
)
|
Proceeds from initial public offering
|
|
|
|
126,848
|
|
|
|
-
|
|
Proceeds from exercise of stock options
|
|
|
|
1,750
|
|
|
|
11,489
|
|
Payments for acquisition of interest in subsidiaries from
non-controlling interests
|
|
|
|
-
|
|
|
|
(255
|
)
|
Proceed from the payment received from non-controlling interests
|
|
|
|
0
|
|
|
|
343
|
|
Others
|
|
|
|
(2
|
)
|
|
|
(1
|
)
|
Net cash provided by financing activities
|
|
|
|
106,628
|
|
|
|
11,439
|
|
Net increase/(decrease) in cash and cash equivalents
|
|
|
|
101,295
|
|
|
|
(11,826
|
)
|
Cash and cash equivalents at the beginning of the year
|
|
|
|
33,652
|
|
|
|
134,698
|
|
Effect of exchange rate fluctuations on cash and cash equivalents
|
|
|
|
(249
|
)
|
|
|
734
|
|
Cash and cash equivalents at the end of the year
|
|
|
|
134,698
|
|
|
|
123,606
|
|
|
|
|
|
|
|
|
|
|
|
(6) Notes to going-concern assumptions - Unaudited
Not applicable.
(7) Notes to Consolidated Financial Statements - Unaudited
Segment Information
The operating segment of the Group is a component for which discrete
financial information is available and whose operating results are
regularly reviewed by the Group's chief operating decision maker in
making decisions about allocation of resources and assessment of
performance. The chief operating decision maker has been identified as
the Company's board of directors. No operating segments have been
aggregated to form the reportable segments.
Description of Reportable Segment
The Group has a single reportable segment:
|
LINE business and portal segment -
|
|
The Group mainly operates a cross-platform messenger application,
LINE, and provides communication and content and advertising
services. Communication and content are primarily provided to end
users via various communication and content. Communication mainly
includes LINE Stickers. Content includes LINE Games and LINE Play.
Others within communication and contents include LINE Friends.
Advertising services are provided via LINE advertising, livedoor
blog and NAVER Matome. LINE advertising includes LINE Official
Accounts, Sponsored Stickers, LINE Points Ads and "performance ads"
on Timeline and LINE NEWS.
|
|
Earnings per Share
The profit or loss for the period and the weighted average number of
shares used in the calculation of earnings per share are as follows:
|
(In millions of yen, except number of shares)
|
|
|
2016
|
|
2017
|
Profit for the year attributable to the shareholders of the Company
from continuing operations
|
|
8,745
|
|
|
8,091
|
|
Loss for the year attributable to the shareholders of the Company
from discontinued operations
|
|
(1,982
|
)
|
|
(13
|
)
|
Total profit for the year attributable to the shareholders of the
Company for basic and diluted earnings per share
|
|
6,763
|
|
|
8,078
|
|
Weighted average number of total common shares and class A shares
|
|
194,083,995
|
|
|
221,405,391
|
|
Weighted average number of total treasury shares
|
|
-
|
|
|
(459,843
|
)
|
Weighted average number of total common shares and class A shares
for basic earnings per share(1)
|
|
194,083,995
|
|
|
220,945,548
|
|
Effect of dilution:
|
|
|
|
|
Stock options
|
|
20,790,013
|
|
|
16,559,790
|
|
Employee Stock Ownership Plan (J-ESOP)
|
|
-
|
|
|
47,369
|
|
Weighted average number of total common shares and class A shares
adjusted for the effect of dilution(1)
|
|
214,874,008
|
|
|
237,552,706
|
|
|
(1)
|
|
Through the amendment of its articles of incorporation on June 15,
2015, the Company introduced a dual class structure of common shares
and class A shares and converted all outstanding common shares into
class A shares; therefore, the weighted average number of shares for
the year ended December 31, 2016 includes the average number of
common shares and class A shares for the year ended December 31,
2016. Additionally, through an amendment of its article of
incorporation effective as of March 31, 2016, the Company terminated
its dual class structure of commons shares and class A shares and
converted all class A shares into common shares.
|
|
In calculating diluted earnings per share, share options outstanding and
other potential shares are taken into account where their impact is
dilutive. Potential common shares used in the calculation of diluted
earnings per share for the year ended December 31, 2016 included options
representing 22,911,500 shares which were outstanding as of December 31,
2016 as they had a dilutive impact.
Potential common shares used in the calculation of diluted earnings per
share for the year ended December 31, 2017, included options
representing 5,828,302 shares which were outstanding as of December 31,
2017 as their impact was dilutive.
The Company has granted 23,860 of stock options (warrants) to directors
and executive officers of the Company and a director of a subsidiary
with the grant date of July 18, 2017. Upon exercise of those stock
options, common shares of 2,386,000 will be issued.
Moreover, the Company has issued 1,007,810 of new common shares through
a third-party allotment in accordance with the introduction of the
Employee Stock Ownership Plan (J-ESOP) on July 18, 2017.
Significant Subsequent events
Through the meeting of the board of directors on January 31, 2018, the
Group resolved to enter into an agreement with a third party in regard
to the Group's mobile communication service. This agreement includes a
plan to allot new shares of LINE Mobile Corporation to the third party.
Upon completion of the third-party allotment, the Group's ownership of
LINE Mobile Corporation will decrease from 100.0% to 49.0%, resulting in
LINE Mobile Corporation to be accounted for as an associate under the
equity method.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180131005664/en/
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