Konami Grp Corp Regulatory News (KNM)

12 May 2006 13:03

Konami Corporation12 May 2006 FOR IMMEDIATE RELEASE May 12, 2006 KONAMI CORPORATION 2-4-1 Marunouchi, Chiyoda-ku, Tokyo, Japan Kagemasa Kozuki Representative Director and CEO Stock code number: 9766 at TSE1 Contact: Noriaki Yamaguchi Executive Vice President and Chief Financial Officer Tel: +81-3-5220-0573 News Release: Revision of Consolidated Results Forecast for the Year Ended March 31, 2006 We hereby announce the revision of our consolidated results forecast for the year ended March31, 2006, which was previously released on May 10, 2005. 1. Revision of Consolidated Results Forecast (US GAAP) (Millions of yen) Year ended March 31, 2006 (from April 1, 2005, to March 31, 2006) Net revenues Operating Income before Net income income income taxes Previous forecast (A) 270,000 28,500 34,000 18,000 Released on May 10, 2005 Revised forecast (B) 262,100 2,400 8,400 23,000 Change (B - A) -7,900 -26,100 -25,600 5,000 Percentage Change (%) -2.9 -91.6 -75.3 27.8 Results for the year ended March31, 2005 260,691 28,136 27,442 10,486< For reference : Revised forecast>Disclosed under 262,100 23,000 8,400 23,000 Japanese GAAPThere are no changes to the year end cash dividend forecast, which previouslyhave been announced as 27.00 Japanese yen per share. (Including interimdividend, dividend for the year is 54.00 Japanese yen.) 2. Reason for the revision In our Health & Fitness business, we have appropriate accelerated depreciationof assets, approximately 10.5 billion yen, such as the buildings for our fitnessfacilities where the book value of such assets has exceeded expected future cashflow. In order to achieve a more fair measurement of the asset valuation, we have alsorevalued our intangible fixed assets and posted an approximately 9.2 billion yenof accelerated depreciation in addition to the accelerated depreciation oftangible fixed assets. As a result of adopting accounting for the impairment of assets, we wrote off anapproximately 19.7 billion yen of impairment loss and have adjusted our forecastof operating income for the year ended March 31, 2006, downward to 2.4 billionyen. As we adopted the US GAAP after listing on the New York Stock Exchange in 2002,we are accounting for this lump sum depreciation expense as an operatingexpense. (it would be treated as an extraordinary loss under Japanese GAAPj We are revising our forecast of Consolidated Net Income for the year ended March31, 2006, upward to 23 billion yen due to an approximately 17 billion yenreversal of tax liabilities accrued for tax benefits that we had our assets re-appraised under US GAAP in connection with the impairment of goodwill, whichoriginally accrued when shares of common stock of the former PEOPLE CO., LTD.were acquired in the year 2001. 3. Outlook for Health & Fitness Business Konami has been undertaking a group reorganization since last year, and hasaimed to enhance the corporate value of our businesses through a holding companystructure which we implemented in March 2006. In our Health & Fitness business,we have aimed to offer safe, clean, comfortable fitness facilities, in responseto the aging of Japanese society and a rising awareness of health issues,improve our efficiency and strengthen our earnings base. In addition, we are concentrating on creating new health-related services thatare distinct from those in the conventional fitness business. We believe we will improve our operating income margin by our fitness facilityunit starting with the fiscal year ending March 31, 2007, as there has been atrend of increasing members for our fitness facilities, and by posting theaccelerated depreciation of assets in the fiscal year ended March 31, 2006, willhave assets that are more fairly valued in relation to our operating revenues. Improving our profitability by our fitness facility unit, expanding newbusinesses for seniors and health promotion businesses (expansion of ourlifestyle disease prevention business through alliances with medicalinstitutions), we aim to achieve operating income of 5 billion yen and 10billion yen in our Health & Fitness business (with an operating income margin of10%) for the years ending March 31, 2007, and 2009, respectively. Paste the following link into your web browser to download the PDF document related to this announcement: http://www.rns-pdf.londonstockexchange.com/rns/8954c_-2006-5-12.pdf Cautionary Statement with Respect to Forward-Looking Statements: Statements made in this document with respect to our current plans, estimates,strategies and beliefs, including the above forecasts, are forward-lookingstatements about our future performance. These statements are based onmanagementfs assumptions and beliefs in light of information currently availableto it and, therefore, you should not place undue reliance on them. A number ofimportant factors could cause actual results to be materially different from andworse than those discussed in forward-looking statements. Such factors include,but are not limited to: (i) changes in economic conditions affecting ouroperations; (ii) fluctuations in currency exchange rates, particularly withrespect to the value of the Japanese yen, the U.S. dollar and the Euro; (iii)our ability to continue to win acceptance of our products, which are offered inhighly competitive markets characterized by the continuous introduction of newproducts, rapid developments in technology and subjective and changing consumerpreferences; (iv) our ability to successfully expand internationally with afocus on our video game software business, card game business and gaming machinebusiness; (v) our ability to successfully expand the scope of our business andbroaden our customer base through our exercise entertainment business; (vi)regulatory developments and changes and our ability to respond and adapt tothose changes; (vii) our expectations with regard to further acquisitions andthe integration of any companies we may acquire; and (viii) the outcome ofcontingencies. This information is provided by RNS The company news service from the London Stock Exchange