Revision of the Full-Year Earnings Forecast, Recognition of an Impairment Loss, and Recognition of a Valuation Loss on Shares of Affiliated Companies in the Non-Consolidated Financial Statements
NRI Australia Limited and Core BTS, Inc. (subject to impairment testing in the consolidated financial statements), and the reporting company (subject to the valuation loss on shares of an affiliated company in the non-consolidated financial statements)
NRI Australia Limited in Australia, Core BTS, Inc. in North America, SQA Holdco Pty Ltd, which merged with NRI Australia Limited and is the holding company of Planit Test Management Solutions Pty Ltd and other entities, and the shares of NRI Australia Holdings Pty Ltd, the Australian subsidiary. The businesses concerned are the consulting, managed services, and cloud consulting businesses.
NRI Australia Limited revised its business plan in light of deteriorating performance resulting from lower orders in its consulting and managed services businesses, while Core BTS, Inc. revised its business plan in light of deteriorating performance in its cloud consulting business. Impairment testing based on the latest business plans indicated that the recoverable amount was below the carrying amount. In addition, the net asset value of the shares of NRI Australia Holdings Pty Ltd declined significantly.
Impairment loss of ¥96.9 billion on goodwill and other assets, affecting consolidated operating profit, profit before tax, and profit for the period attributable to owners of the parent. The impairment loss comprises ¥76.9 billion for NRI Australia Limited and ¥19.9 billion for Core BTS, Inc. A valuation loss of ¥48.8 billion on shares of an affiliated company will be recognized as an extraordinary loss in the non-consolidated financial statements and eliminated in the consolidated financial statements.
Fiscal year ending March 2026 (1 April 2025 to 31 March 2026)
The consolidated earnings forecast has been revised. Revenue is ¥814 billion (previous forecast: ¥810 billion), operating profit is ¥58 billion (previous forecast: ¥150 billion), profit before tax is ¥59 billion (previous forecast: ¥151 billion), and profit for the period attributable to owners of the parent is ¥15 billion (previous forecast: ¥104 billion).
The Company expects to recognize an impairment loss of ¥96.9 billion and a valuation loss of ¥48.8 billion on shares of an affiliated company in the fiscal year ending March 2026.
| Item | Details |
|---|---|
| Event name | Revision of the Full-Year Earnings Forecast, Recognition of an Impairment Loss, and Recognition of a Valuation Loss on Shares of Affiliated Companies in the Non-Consolidated Financial Statements |
| Subject Entity | NRI Australia Limited and Core BTS, Inc. (subject to impairment testing in the consolidated financial statements), and the reporting company (subject to the valuation loss on shares of an affiliated company in the non-consolidated financial statements) |
| Target Locations / Products | NRI Australia Limited in Australia, Core BTS, Inc. in North America, SQA Holdco Pty Ltd, which merged with NRI Australia Limited and is the holding company of Planit Test Management Solutions Pty Ltd and other entities, and the shares of NRI Australia Holdings Pty Ltd, the Australian subsidiary. The businesses concerned are the consulting, managed services, and cloud consulting businesses. |
| Cause | NRI Australia Limited revised its business plan in light of deteriorating performance resulting from lower orders in its consulting and managed services businesses, while Core BTS, Inc. revised its business plan in light of deteriorating performance in its cloud consulting business. Impairment testing based on the latest business plans indicated that the recoverable amount was below the carrying amount. In addition, the net asset value of the shares of NRI Australia Holdings Pty Ltd declined significantly. |
| Amount of Impact on Business Performance | Impairment loss of ¥96.9 billion on goodwill and other assets, affecting consolidated operating profit, profit before tax, and profit for the period attributable to owners of the parent. The impairment loss comprises ¥76.9 billion for NRI Australia Limited and ¥19.9 billion for Core BTS, Inc. A valuation loss of ¥48.8 billion on shares of an affiliated company will be recognized as an extraordinary loss in the non-consolidated financial statements and eliminated in the consolidated financial statements. |
| Accounting period in which recognized | Fiscal year ending March 2026 (1 April 2025 to 31 March 2026) |
| Impact on Earnings Forecast | The consolidated earnings forecast has been revised. Revenue is ¥814 billion (previous forecast: ¥810 billion), operating profit is ¥58 billion (previous forecast: ¥150 billion), profit before tax is ¥59 billion (previous forecast: ¥151 billion), and profit for the period attributable to owners of the parent is ¥15 billion (previous forecast: ¥104 billion). |
| Outlook | The Company expects to recognize an impairment loss of ¥96.9 billion and a valuation loss of ¥48.8 billion on shares of an affiliated company in the fiscal year ending March 2026. |
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These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.
The reasons the company gives
The company's own explanation, not something inferred from the numbers.NRI Australia Limited revised its business plan in light of deteriorating performance resulting from lower orders in its consulting and managed services businesses, while Core BTS, Inc. revised its business plan in light of deteriorating performance in its cloud consulting business. As a result, impairment testing indicated that the recoverable amount was below the carrying amount.