<06889/HK>■Status of Dynam Japan Holdings' financial results for the fiscal year ending 2024/3

The number of stores at the end of 2024/3 increased by 5 from the end of the previous fiscal year to 397 stores. 7 stores were acquired through M&A, and 2 stores that had become unprofitable were closed. The number of game machines installed increased 4.7% from the same period to 194,108 units due to an increase in the number of stores, and the industry share in the number of units installed was 5.7%. Of these, the number of smart game machines installed increased drastically from 4,956 units at the end of the previous fiscal year to 18,810 units (29.4% of the same period), while Sumapachi remained at 3,673 units (installation ratio 2.8%). This is because they actively proceeded with purchases centered on hit models that can be expected to operate at a high rate. The high occupancy rate of smart slots is also reflected in the loan income ratio, and as of 2024/3, out of slot ball loan revenue, smaslot accounted for 40.4%. As for Sumapachi, the loan income ratio is 5.6%, which is higher than the ratio of the number of units installed, but it is within the margin of error. For this reason, in the 2024/3 fiscal year, it can be said that how many popular smartphone slot models can be arranged was an important year for recovering profits.

Reasons why the installation of Sumapachi has not progressed include the fact that there was no big difference in game performance compared to conventional models and differentiation was not achieved, and since it is necessary to install a ball reflux system in the game machine and manufacturing costs also increase, movement to sell the main title was limited on the manufacturer side, and that the introduction of smart slots, which can be expected to operate at a high level even with limited investment capacity, was prioritized on the hall side. Reflecting this situation, the occupancy rate of Dynam stores also decreased by 1.5 points compared to the previous fiscal year for pachinko, while slots also rose 3.9 points.

(2) Aircraft leasing business

Business revenue from the aircraft leasing business increased 104.6% from the previous fiscal year to 5,883 million yen, and segment profit increased 142.5% to 1,072 million yen, resulting in a significant increase in sales and profit. This business is operated by 9 experts, including Japanese people, at the subsidiary Dynam Aviation Ireland Limited (Dynam Aviation). In addition to developing the leasing business by focusing on narrowbody aircraft (AIRBUS (hereinafter, Airbus) A320 series and The Boeing Company (hereinafter, Boeing) B737 series, etc.), which have high fluidity and demand is expected to be stable, we have established a system to in-house manufacture lease aircraft management operations that were conventionally outsourced, and we began providing lease management services for aircraft owned by other companies from the 2024/3 fiscal year.

The reason for the increase in sales was due to the purchase of 4 new aircraft and the commencement of leasing, and the number of leased aircraft increased from 6 at the end of the previous fiscal year to 10. Of the 4 aircraft, 2 aircraft were leased to Indigo (Indigo), which is India's LCC, and the remaining 2 aircraft were leased to Wizz Air Hungary Ltd. (hereafter, Wizz Air), which is the Hungarian LCC. Also, in the newly launched aircraft lease management service, management services for 7 aircraft owned by other corporations were contracted, contributing to an increase in profits. Business expenses increased by 1416 million yen to 3,250 million yen, mainly due to an increase in depreciation and amortization expenses associated with the purchase of new aircraft (1,275 million yen increase). Also, the financial balance deteriorated by 951 million yen due to an increase in loans. Furthermore, the fleet value was 81,363 million yen, up 97.8% from the same period, the average remaining lease period was 6.0 years, and the annualized surface yield was 8.1%.

(Author: FISCO Visiting Analyst Joe Sato)