Decline in Advertising Revenue Due to Regional Economic Conditions and Customer Policy Changes

「As a result of vigorously advancing these various measures, non-print sales, including PPP (public-private partnership) businesses, proposal-based projects and digital businesses, drove the overall performance and net sales reached a record high. Although raw material and other expense costs rose and personnel expenses increased, the effect of substantially higher sales absorbed these increases.」

「As a result of these initiatives, off-page revenue from PPP (public-private partnership) businesses, including newly awarded designated management contracts, proposal-based projects, and the digital business remained firm. However, revenue fell below the previous fiscal year's level due to lower revenue from the year-round closure of Hadano City Cultural Hall, the slowdown in print advertising placements, and the longer-than-expected time required for the structural reform toward becoming a comprehensive information company that also publishes regional information papers. Despite efforts to reduce cost of sales and other expenses in addition to the decline in revenue, operating profit, ordinary profit, and net income all fell below the previous fiscal year's levels, mainly because labor costs increased with wage increases aimed at improving employee compensation.」

「As a result of these initiatives, off-page revenue, including digital-related revenue, remained generally firm. However, Town News's total revenue fell below the year-earlier level due to the slowdown in print advertising placements, the longer-than-expected time required to address organizational changes including the restructuring of the editorial department, lower business revenue caused by the closure of Hadano City Cultural Hall, and the concentration of promotional business projects at the fiscal year-end. Although the company worked to reduce cost of sales through measures including optimizing the number of inserts and to cut various costs, operating profit fell below the year-earlier level because these efforts were insufficient to absorb increases in labor and other costs. Ordinary profit and interim net income also fell below the year-earlier levels despite gains including those from the sale of held shares. For the interim accounting period, revenue was ¥1,674 million, down 4.0% year on year; operating profit was ¥165 million, down 24.4%; ordinary profit was ¥257 million, down 14.7%; and interim net income was ¥174 million, down 21.3%.」

「For the fiscal year, revenue was ¥3,736 million, up 1.2% year on year; operating profit was ¥576 million, up 1.3%; ordinary profit was ¥686 million, up 10.4%; and net income was ¥492 million, up 14.6%.」

「As a result of these initiatives, although print advertising revenue declined, off-page revenue, including digital-related revenue, remained generally firm, and Town News's total revenue slightly exceeded the year-earlier level.」

「As a result of these initiatives, print-related revenue, digital-related revenue, and off-page revenue all performed generally favorably and exceeded the year-earlier levels.」

「As a result of these comprehensive initiatives, revenue significantly exceeded the previous fiscal year and reached a record high. Despite higher paper and other raw material costs, higher revenue, together with efforts to reduce cost of sales and expenses, enabled operating profit, ordinary profit, and net income to significantly exceed the previous fiscal year, with all 3 reaching record highs. For the fiscal year, revenue was ¥3,692 million, up 13.7% year on year; operating profit was ¥569 million, up 50.5%; ordinary profit was ¥621 million, up 36.5%; and net income was ¥430 million, up 38.3%.」

「For the cumulative third quarter, revenue was ¥2,985 million, up 19.0% year on year; operating profit was ¥646 million, up 52.0%; ordinary profit was ¥684 million, up 40.6%; and quarterly net income was ¥442 million, up 37.6%.」

「As a result of these measures, print advertising revenue performed generally favorably, while web and off-page revenue also increased, and Town News's total revenue significantly exceeded the year-earlier level.」

「As a result of these initiatives, print advertising revenue, web advertising revenue, and off-page business revenue all performed favorably and exceeded the year-earlier levels. Despite numerous cost-increase factors, efforts to control cost of sales and reduce selling, general and administrative expenses, together with higher revenue, enabled operating profit, ordinary profit, and quarterly net income to significantly exceed the year-earlier levels. For the cumulative first quarter, revenue was ¥884 million, up 16.7% year on year; operating profit was ¥119 million, up 48.0%; ordinary profit was ¥127 million, up 42.7%; and quarterly net income was ¥83 million, up 35.2%.」

「As a result of these measures, print advertising revenue, web-related revenue, and off-page business revenue all increased steadily. Revenue for the fiscal year recovered to pre-COVID-19 levels and exceeded that of the previous fiscal year.」

「As a result of these activities, revenue for the cumulative third quarter exceeded the year-earlier level. In addition to higher revenue, profit benefited from efforts to reduce cost of sales and selling, general and administrative expenses, as well as gains on the sale of investment securities. Consequently, operating profit, ordinary profit, and quarterly net income all significantly exceeded the year-earlier levels. For the cumulative third quarter, revenue was ¥2,508 million, up 11.8% year on year; operating profit was ¥425 million, up 66.9%; ordinary profit was ¥486 million, up 70.4%; and quarterly net income was ¥321 million, up 69.3%.」

「As a result of these initiatives, print advertising revenue, web advertising revenue, and off-page planning and production revenue all performed favorably and exceeded the year-earlier levels despite difficult local economic conditions during the COVID-19 pandemic. Profit also exceeded the year-earlier levels across operating profit, ordinary profit, and quarterly net income, as revenue increased and efforts were made to control cost of sales and reduce selling, general and administrative expenses. For the cumulative first quarter, revenue was ¥758 million, up 10.9% year on year; operating profit was ¥80 million, up 709.3%; ordinary profit was ¥89 million, up 291.0%; and quarterly net income was ¥61 million, up 260.0%.」

「As a result of these measures, revenue from the web-related business and businesses other than print advertising increased steadily, offsetting the decline in print advertising space sales caused by the downturn in local economies following repeated requests to refrain from going out and requests for business closures amid the spread of COVID-19. Consequently, revenue for the fiscal year exceeded that of the previous fiscal year. Overall, revenue was ¥2,942 million, up 4.7% year on year; operating profit was ¥243 million, up 97.0%; ordinary profit was ¥286 million, up 60.3%; and net income was ¥193 million, up 168.8%.」

「However, the effects of these business initiatives were not sufficient to offset the decline in private-sector demand, and revenue for the cumulative third quarter fell below the year-earlier level.」

「The decline in print advertising revenue continued due to reduced placements covering broad areas and lower placements by small clients, and could not be fully offset by web revenue and revenue outside the print edition, resulting in quantified declines in revenue and profit. For the cumulative second quarter, revenue was ¥1,350 million, down 7.1% year on year; operating profit was ¥20 million, down 78.6%; ordinary profit was ¥45 million, down 59.9%; and quarterly net profit was ¥30 million, down 60.6%.」

「Although we pursued the initiatives described above, print advertising revenue failed to grow amid difficult local economic conditions during the COVID-19 pandemic. Despite growth in web advertising revenue and revenue from planning and production outside the print edition, total revenue fell below the same period of the previous year. Although we worked to reduce the cost of sales and selling, general and administrative expenses, operating profit, ordinary profit and quarterly net profit all fell below the same period of the previous year. For the cumulative first quarter, revenue was ¥683 million, down 7.7% year on year; operating profit was ¥9 million, down 83.5%; ordinary profit was ¥22 million, down 66.0%; and quarterly net profit was ¥17 million, down 61.4%.」

「Although revenue from the web-related business and other sources outside the print edition increased steadily as a result of these initiatives, the downturn in local economic conditions and the recession caused by requests to refrain from going out and requests to suspend business following the spread of COVID-19 from March onward had a significant impact. Together with the decline in available print advertising space, this caused fiscal-year revenue to fall substantially below the previous fiscal year.」

「Although these activities had an effect, repeated cancellations and self-restraint concerning local events following the spread of COVID-19, together with the resulting deterioration in local economic conditions, led to successive cancellations and reductions in advertising placements, particularly from March onward. Revenue therefore fell below the same period of the previous year. Although we worked to reduce the cost of sales through measures such as optimizing the number of newspaper inserts and to reduce selling, general and administrative expenses, we could not offset the decline in revenue, and operating profit, ordinary profit and quarterly net profit all fell below the same period of the previous year. For the cumulative third quarter, revenue was ¥2,361 million, down 2.9% year on year; operating profit was ¥300 million, down 13.2%; ordinary profit was ¥325 million, down 10.0%; and quarterly net profit was ¥161 million, down 32.2%.」

「As a result of these initiatives, print revenue declined as the tendency to hold back on placements covering broad areas continued, but revenue from the web-related business and outside the print edition steadily increased and offset the decline in print revenue. Total Town News revenue consequently exceeded the same period of the previous year.」

「As a result of the initiatives described above, print advertising revenue declined year on year, but web advertising revenue and revenue from planning and production outside the print edition increased, allowing total revenue to slightly exceed the same period of the previous year. Profit also exceeded the previous year's level across operating profit, ordinary profit and quarterly net profit, following efforts to reduce the cost of sales through greater efficiency in the production division and optimization of the number of newspaper inserts. For the cumulative first quarter, revenue was ¥741 million, up 0.0% year on year; operating profit was ¥60 million, up 19.6%; ordinary profit was ¥67 million, up 4.1%; and quarterly net profit was ¥44 million, up 5.5%.」

「As a result of these initiatives, revenue from the web-related business and other sources outside the print edition increased and offset the decline in print advertising revenue caused by the economic downturn in some areas, enabling fiscal-year revenue to exceed the previous fiscal year.」

「As a result of these activities, revenue, which had been below the previous year through the second quarter, exceeded the same period of the previous year in the third quarter. Operating profit also exceeded the previous year's level, helped by lower costs of sales from efficiency gains following the consolidation of production sites and optimization of the number of newspaper inserts. Ordinary profit, however, fell slightly below the previous year's level because of the recognition of a loss on the sale of securities and other factors. For the cumulative third quarter, revenue was ¥2,431 million, up 0.2% year on year; operating profit was ¥346 million, up 2.1%; ordinary profit was ¥361 million, down 4.1%; and quarterly net profit was ¥238 million, up 2.9%.」

「As a result of these initiatives, revenue from the web-related business steadily increased, but the economic downturn in some areas outside the urban regions and the tendency to hold back on placements covering broad areas continued. The fruition of new businesses was also delayed beyond initial expectations, and total Town News revenue fell below the same period of the previous year. For the cumulative second quarter, revenue was ¥1,437 million, down 4.1% year on year; operating profit was ¥45 million, down 66.5%; ordinary profit was ¥71 million, down 57.4%; and quarterly net profit was ¥48 million, down 48.6%.」

「Although we pursued the initiatives described above, local economic stagnation outside the urban regions and the environment surrounding print advertising remained difficult, and revenue unfortunately fell below the same period of the previous year. Despite efforts to reduce the cost of sales, higher personnel and depreciation expenses, together with the decline in revenue, caused operating profit and ordinary profit to fall below the same period of the previous year. Quarterly net profit increased year on year because the previous year's comparable period included a special loss. For the cumulative first quarter, revenue was ¥740 million, down 2.3% year on year; operating profit was ¥50 million, down 26.5%; ordinary profit was ¥64 million, down 22.9%; and quarterly net profit was ¥42 million, up 24.0%.」

「Although revenue from the web-related business and other sources increased as a result of these initiatives, this did not offset the decline in print advertising revenue caused by the economic downturn in some areas outside the urban regions. Accordingly, fiscal-year revenue fell below the previous fiscal year. Revenue was ¥3,098 million, down 0.9% year on year; operating profit was ¥291 million, up 60.4%; ordinary profit was ¥335 million, up 33.7%; and net profit was ¥208 million, up 24.6%.」

「These initiatives steadily expanded our capture of advertising demand outside the print edition and increased orders from urban areas. However, regional disparities emerged, and this was insufficient to offset the decline in advertising placements by local small and medium-sized businesses and individual stores, resulting in revenue below the same period of the previous year.」

「Although we pursued these initiatives, lower advertising orders from local small and medium-sized businesses and individual stores, together with a tendency to hold back on advertising placements covering broad areas, weighed on performance amid difficult local economic conditions. As a result, total Town News revenue fell slightly below the same period of the previous year.」

「Although we pursued the initiatives described above, the local economic environment remained difficult, and lower advertising placements by our principal customers, namely small and medium-sized businesses and sole proprietors, weighed on revenue, which fell below the same period of the previous year. Although we worked to reduce the cost of sales through measures such as optimizing the number of newspaper inserts and to reduce selling, general and administrative expenses, the decline in revenue caused operating profit, ordinary profit and quarterly net profit to fall below the same period of the previous year. For the cumulative first quarter, revenue was ¥758 million, down 4.8% year on year; operating profit was ¥68 million, down 3.0%; ordinary profit was ¥83 million, down 0.9%; and quarterly net profit was ¥33 million, down 38.0%.」

「However, local economic conditions remained difficult, and lower advertising orders from our principal customers, namely sole proprietors and small and medium-sized businesses, caused revenue for the fiscal year to fall below the previous fiscal year. Although we worked to reduce the cost of sales, selling, general and administrative expenses and other costs, operating profit, ordinary profit and net profit also fell below the previous fiscal year due in part to a substantial increase in the provision for retirement benefits following a review of the contractual terms. For the fiscal year, revenue was ¥3,125 million, down 3.6% year on year; operating profit was ¥181 million, down 44.0%; ordinary profit was ¥250 million, down 36.8%; and net profit was ¥167 million, down 36.4%.」

「However, amid difficult local economic conditions, lower advertising orders from our principal customers, namely local small and medium-sized businesses and individual stores, together with a tendency to hold back on advertising placements covering broad areas, prevented us from achieving planned revenue. Although we pursued greater operating efficiency, including reorganizing the publications issued in the Yokohama and Kawasaki areas, operating profit, ordinary profit and quarterly net profit all fell below the same period of the previous year due to the decline in revenue and an increase in provisions following changes to the retirement benefit plan rules. For the cumulative third quarter, revenue was ¥2,445 million, down 2.1% year on year; operating profit was ¥234 million, down 25.7%; ordinary profit was ¥293 million, down 22.7%; and quarterly net profit was ¥192 million, down 20.2%.」

「However, amid difficult local economic conditions, lower advertising orders from our principal customers, namely local small and medium-sized businesses and individual stores, together with a tendency to hold back on advertising placements covering broad areas, prevented us from achieving planned revenue. As a result, total Town News revenue fell below the same period of the previous year, and the decline in revenue also caused operating profit, ordinary profit and quarterly net profit to fall below the previous year's levels. For the cumulative second quarter, revenue was ¥1,500 million, down 3.8% year on year; operating profit was ¥72 million, down 35.4%; ordinary profit was ¥125 million, down 24.0%; and quarterly net profit was ¥85 million, down 21.8%.」

「Although we pursued the initiatives described above, the economic environment surrounding the local economy and the industry as a whole remained difficult, and the new organizational structure did not produce an immediate recovery in latent demand. As a result, for the cumulative first quarter, revenue was ¥797 million, down 2.0% year on year; operating profit was ¥70 million, down 17.2%; ordinary profit was ¥84 million, down 8.8%; and quarterly net profit was ¥54 million, down 13.6%.」

「However, local economic conditions remained difficult, and advertising orders from our principal customers, namely sole proprietors and small and medium-sized businesses, declined. As a result, revenue for the fiscal year fell below the previous fiscal year.」