Establishing an earnings base in Asia

「Going forward, we aim to transition from a revenue structure centered on investment returns to a stable earnings model focused on fee income from fund management (management fees).」

「At the end of July 2023, the Company sold part of its stake in Roar Media, one of the portfolio companies of STRIDERS GLOBAL INVESTMENT PTE.LTD. Roar Media operates digital media platforms in Sri Lanka and Bangladesh, and the sale generated a capital gain. At the end of March 2024, the Company also invested in AME Healthcare Pte Ltd, a Singapore-based startup providing dental clinic platforms in South Asia and the Middle East.」

「Against this backdrop, at the end of July, the Company sold part of its shares in Roar Media, one of the investees of STRIDERS GLOBAL INVESTMENT PTE.LTD. that operates digital media platforms in Sri Lanka and Bangladesh, and recorded a capital gain as a result.」

「Through its investment business at Striders Global Investment Pte. Ltd., the Company has invested in 2 companies located in the Democratic Socialist Republic of Sri Lanka, where economic disruption is a concern. Both companies had already focused on expanding their businesses outside Sri Lanka, and the Sri Lankan rupee accounts for a low proportion of the currencies used as the base currencies for their business activities. Accordingly, the Company believes that the impact of the country's economic disruption is sufficiently under control at present.」

「Through its investment business at Striders Global Investment Pte. Ltd., the Company has invested in 2 companies located in the Democratic Socialist Republic of Sri Lanka, where economic disruption is a concern.」

「Regarding the progress of the investment business at Striders Global Investment Pte. Ltd., in April 2021, an affiliate of Roar Media, a digital media platform in Sri Lanka and Bangladesh in which the Company invested in October 2018, was absorbed through a merger. In June 2021, the Company invested USD100,000 in Indogen Capital Fund II, L.P., which identifies promising startups in Indonesia and provides investment and management support. In December 2021, it invested USD75,000 in AGRITHMICS, a Sri Lankan SaaS company promoting the digital transformation of the process by which smallholder farmers deliver harvested crops to production facilities.」

「The results of PT. Citra Surya Komunikasi are consolidated with a three-month lag and therefore reflect January to June 2021. As the COVID-19 situation in Indonesia worsened and had a significant impact on the overall socioeconomic environment, revenue from the overseas business for the six-month period ended in the second quarter was ¥48 million, down 86.0% year on year, and the operating loss was ¥82 million, compared with operating income of ¥26 million in the same period of the previous year.」

「The results of PT. Citra Surya Komunikasi are consolidated with a three-month lag and therefore reflect January to March 2021. As the COVID-19 situation in Indonesia worsened and had a significant impact on the overall socioeconomic environment, revenue from the overseas business for the three-month period ended in the first quarter was ¥13 million, down 92.4% year on year, and the operating loss was ¥43 million, compared with operating income of ¥9 million in the same quarter of the previous year.」

「Revenue from the overseas business for the fiscal year was ¥435 million, down 50.4% year on year, and the operating loss was ¥40 million, compared with operating income of ¥28 million in the previous year.」

「The results of PT. Citra Surya Komunikasi are consolidated with a three-month lag and therefore reflect January to September 2020. Transactions with existing customers and others fell sharply because of the impact of COVID-19, resulting in revenue from the overseas business of ¥397 million for the nine-month period ended in the third quarter, down 37.9% year on year. Control of cost of sales and selling, general and administrative expenses resulted in an operating loss of ¥5 million, compared with operating income of ¥15 million in the same period of the previous year.」

「The results of PT. Citra Surya Komunikasi are consolidated with a three-month lag and therefore reflect January to June 2020. Transactions with existing customers and others were sluggish because of the impact of COVID-19, resulting in revenue from the overseas business of ¥350 million for the six-month period ended in the second quarter, down 22.8% year on year. However, control of cost of sales and selling, general and administrative expenses resulted in operating income of ¥26 million, up 238.6% year on year.」

「The advertising agency business is consolidated with a three-month lag, so the figures reflect results for January to March 2020. Before the impact of COVID-19 became significant, transactions with existing customers and others remained solid, resulting in revenue from the overseas business of ¥176 million for the three-month period ended in the first quarter, up 3.4% year on year, and operating income of ¥9 million, compared with an operating loss of ¥7 million in the same quarter of the previous year.」

「In the overseas business, PT. Citra Surya Komunikasi operates primarily as an advertising agency for Japanese companies in the Republic of Indonesia. Although revenue remained broadly at the previous year's level, lower gross profit margins among major customers caused revenue from the overseas business for the fiscal year to fall 1.4% year on year to ¥876 million, while operating income fell 38.3% to ¥28 million.」

「The Company expects that its networks in Indonesia, Sri Lanka, Thailand and elsewhere in Asia can be used to expand distribution and enhance the value of Amagasa's products as Japanese brands, creating new sources of revenue at each location.」

「Although the annual plan assumes revenue and profit above the previous year's levels and progress is in line with the plan on an annual basis, fluctuations in the revenue and profit plans of major customers in the first quarter resulted in revenue from the overseas business of ¥453 million for the six-month period ended in the second quarter, down 11.2% from the same period of the previous year, and operating income of ¥7 million, down 74.7%.」

「In the overseas business, PT. Citra Surya Komunikasi operates primarily as an advertising agency for Japanese companies in the Republic of Indonesia. Although the business is progressing in line with the annual plan, which assumes revenue and profit above the previous year's levels, quarterly fluctuations in the revenue and profit plans of major customers resulted in revenue of ¥170 million for the three-month period ended in the first quarter, down 32.9% from the same quarter of the previous year, and an operating loss of ¥7 million, compared with operating income of ¥18 million in the same quarter of the previous year.」

「Revenue from the overseas business for the fiscal year was ¥889 million, up 45.2% year on year, and operating income was ¥45 million, up 20.7%. In Sri Lanka, the Company is investing in new businesses. As these investments are still in the development stage, they are not yet generating revenue,」

「In the overseas business, PT. Citra Surya Komunikasi operates primarily as an advertising agency for Japanese companies in the Republic of Indonesia. Although the depreciation of the Indonesian rupiah had eased, local companies were increasingly restricting advertising and promotional expenditures ahead of the presidential election scheduled for April this year. Revenue from the overseas business for the nine-month period ended in the third quarter was ¥672 million, up 136.1% year on year, and operating income was ¥35 million, up 380.2%.」

「In the overseas business, PT. Citra Surya Komunikasi operates primarily as an advertising agency for Japanese companies in the Republic of Indonesia. Although transactions with existing customers grew steadily, the depreciation of the Indonesian rupiah increased overseas procurement costs. Revenue from the overseas business for the six-month period ended in the second quarter was ¥510 million, and operating income was ¥31 million.」

「(Overseas business) In the overseas business, PT. Citra Surya Komunikasi operates primarily as an advertising agency for Japanese companies in the Republic of Indonesia. As transactions with existing customers grew steadily during the three-month period ended in the first quarter, revenue from the overseas business was ¥254 million and operating income was ¥18 million.」

「In the overseas-related business, PT. Citra Surya Komunikasi operates an advertising agency business for Japanese companies in the Republic of Indonesia. It made proposals for store development using new materials to existing Japanese corporate customers and conducted event advertising for local companies. As a result, revenue from the overseas-related business for the nine-month period ended in the third quarter was ¥284 million, and operating income was ¥7 million.」

「PT. Citra Surya Komunikasi had a funding need, and we determined that our investment would enable us to expand a digital advertising business in Indonesia and South Asia, leveraging the technology of zMessenger, our partner company in Sri Lanka, and thereby improve earnings power.」

「Indonesia is a major country with a population of more than 250 million, and its economy is expected to continue developing in line with population growth, which is also expected to drive growth in the advertising business. Separately, the Company has invested in SmartMetro, a fintech company in the Democratic Socialist Republic of Sri Lanka.」

「In our overseas investments, we will invest in growth industries based on our experience, while taking into account conditions and levels of economic development in each country.」

「We continue to pursue new investments aimed at establishing an earnings base in Asia.」