I-NET at a Glance

In the information services industry, to which the Group belongs, demand for business efficiency systems is increasing as companies aim to reform their workstyles and address labor shortages. In addition, systems-related investment remains strong, and the market is growing as efforts to expand the reach of cloud computing, increase the use of big data and AI (artificial intelligence), and promote IoT continue in the interests of digital transformation (DX).

In these conditions, we recorded net sales of 28,684 million yen (up 1.7% year on year), operating profit of 1,648 million yen (down 26.2%), ordinary profit of 1,676 million yen (down 26.8%), and profit attributable to owners of the parent company of 1,440 million yen (down 4.1%) in the first three quarters of the current fiscal year.

Net sales increased over the previous fiscal year. In Information Processing Services, net sales of the data center and cloud services, which are stock businesses, and commissioned calculation services for service stations (SS, gas stations) were strong, and in addition, new orders for mailing services increased, resulting in a year-on-year increase in sales. In System Development Services, net sales for the third quarter alone exceeded the previous fiscal year's figure due to the recovery of projects whose development had been delayed and an increase in new project orders, although net sales for the cumulative period decreased year on year.

Both operating profit and ordinary profit decreased compared to the same period in the previous fiscal year. In the first half of the current fiscal year, the cost of sales remained high due to factors such as the rise in license fees for software for cloud virtualization environments and the burden of depreciation of equipment and development investments. We addressed the rise in costs by working to pass on the increase in costs to sales prices and reduce costs such as SG&A expenses, but this has not been sufficient to offset the increase in costs, and profits have decreased. We are eliminating the causes of the decline in profits, thanks to sales at appropriate prices and revenue growth following the acquisition of new projects, and operating profit for the third quarter alone has recovered to the same level as in previous years. Profit attributable to owners of the parent company decreased only slightly year on year, due to the recording of gains on sale of investment securities.

The Group is entering the final year of its Medium-term Management Plan (April 2022 - March 2025). To achieve the numerical targets of “net sales of 40,000 million yen, operating profit of 3,200 million yen, operating profit margin of 8.0%, and ROE of 10% or more,” the Group is making concerted efforts to expand its business.

With respect to dividends, we plan to increase dividends for the 13th consecutive fiscal year, emphasizing the return of profits to our shareholders, who have supported our growth to this point. Going forward, we will continue to target a stable return of profit.

• Forward-looking statements contained in this document are based on information currently available to the Company and on what the Company deems are reasonable assumptions. Actual results could differ materially due to various factors.

For details, see Financial Data