Notice Regarding Recording of Special Loss (Impairment Loss) and Revision of Earnings Guidance

Regarding Recording of Special Loss

To accelerate business development in the global mobile gaming sector, the Company incorporated Rovio Entertainment Ltd. into the Group in September 2023. However, rapid changes in the market environment caused profitability to fall short of plans. In response, impairment tests were conducted, resulting in an impairment loss of approximately 31.3 billion yen on goodwill and other intangible assets recorded in the third quarter of the fiscal year ending March 2026. Additionally, approximately 900 million yen of corporate tax adjustments were recorded due to reversal of deferred tax liabilities.

Revision of Full-Year Earnings Guidance and Future Outlook

The full-year consolidated earnings guidance for the fiscal year ending March 2026 has been revised. Net sales are projected at 490,000 million yen, up 3.2% from the previous forecast. However, operating income, ordinary income, and net income attributable to owners of parent are expected to decrease by 24.5%, 22.3%, and 85.2%, respectively, with net income anticipated at a deficit of 13 billion yen. This reflects the impairment loss on Rovio as well as an estimated impairment loss of about 15 billion yen due to deteriorated profitability associated with increased regulations affecting Stakelogic, acquired in 2024. Meanwhile, the dividend forecast remains unchanged at 28 yen for the period-end and 55 yen for the full year.