Began taking on new challenges to maximize the growth potential of the Group as a whole.

As announced in May 2023, we began preparing for the share-distribution-type Spin-Off and Listing ("Spin-Off Listing") of AGEST, Inc. ("AGEST"), our core subsidiary of Enterprise Business, with the aim of maximizing the growth potential of each of Enterprise Business and Entertainment Business. In Enterprise Business, AGEST made steady progress in preparing for Spin-Off Listing, including the establishment of its own head office functions, the relocation of its head office, and the reorganization of its group organization. AGEST also worked to continue high-growth by expanding services to establish a high-value-added solution "QA for Development" that supports quality from the upstream process of software development, and by promoting initiatives to strengthen collaboration with LOGIGEAR CORPORATION and other overseas group companies. In Entertainment Business, we concluded a strategic business alliance with Localsoft, S.L., a Spanish game localization company to strengthen our ability to provide services in new regions, such as Europe and the Middle East. We also began developing a new generative AI translation engine for game software in collaboration with Rosetta Corp. In this way, we accelerated our efforts for Entertainment Business to shift from a stable growth phase to a growth track.
On the other hand, as for results for 1H FY2023, we did not achieve our initial target of this fiscal year, with net sales of \18,669 million (YoY 106.3%), operating income of \729 million (YoY 53.2%), and net loss attributable to shareholder of the parent company of \436 million. This was mainly, in Entertainment Business, due to the impact of COVID-19 and game regulation changes in the gaming industry of China, as well as the impact of the rebound of strong domestic debugging in the previous fiscal year, and additionally in Enterprise Business, due to weaker profitability and the impairment loss of subsidiary goodwill and others in overseas business mainly by the delay in recovering from the COVID-19 crisis in overseas subsidiary and restructuring the overseas business. In response to this result in 1H FY2023, we revised our full year consolidated earnings forecast. We have already started to take necessary initiatives to recover from the weak results in 1H, and we are aiming to achieve the revised forecast with record-high net sales and operating income in 2H FY2023 as half a year and to recover to a growing trend of higher sales and profits.
We are deeply accepting this performance in 1H FY2023 as our short-term performance, which may have caused concern to our shareholder. We are, at the same time, confident that we will make the successful results by our continuous preparation and efforts for our future growth from the longer viewpoint. Going forward, the management team of the entire Group will work together as one for our future goal. We look forward to the continued support of our shareholder.
November 9, 2023
President and CEO Yasumasa Ninomiya