Depreciation and amortization expenses
Depreciation and amortization expenses increased by 2,539 million yen year on year, mainly due to the purchase of servers and an increase in office space.
Other operating expenses
While we recorded an
impairment loss of the right-of-use assets related to LINE Friends, other operating expenses decreased by 828 million yen year on year, mainly due to a decrease in
expenses related to LINE Points and a decrease in the cost of goods in connection with the revenue decrease related to LINE Friends.
Loss before tax for
the period from continuing operations in the first six months ended June 30, 2020 was 23,608 million yen, compared to a loss of 28,490 million yen in the same period of the previous year.
The decrease in loss before tax from continuing operations was due to the aforementioned decrease in operating loss while other
non-operating expenses increased by 2,778 million yen year on year due to losses on valuations of financial instruments.
Loss for the period in the six months ended June 30, 2020 was 24,522 million yen, compared to a loss of 28,029 million yen in the same period
of the previous year.
The decrease in loss for the period year on year was mainly due to the decrease in loss before tax for the period from continuing
operations mentioned above.
As a result of the above, the loss for the period attributable to the shareholders of the Company in the six months ended
June 30, 2020 was 20,163 million yen, compared to a loss of 26,619 million yen in the same period of the previous year.
Profit and loss
by segment
The Group has two reportable segments: the Core business and the Strategic business. The Groups profit and loss by segment are as
follows:
Core business
Revenues from the Core
business segment for the six months ended June 30, 2020 were 102,380 million yen, an increase of 6.3% year on year, and profit from operating activities in this segment was 22,082 million yen, an increase of 31.0% year on year.
The increases in revenues and profit in the Core business segment were driven by an increase in advertising sales due to strong display advertising sales.
Strategic business
Revenues from the Strategic
business segment for the six months ended June 30, 2020 was 14,966 million yen, an increase of 3.9% year on year, and the loss from operating activities in this segment was 34,716 million yen, whereas it was 38,483 million yen in
the same period in the previous year.
The increase in revenues from the Strategic business was primarily due to an increase in revenues related to
Fintech and E-commerce, despite a decrease in revenues related to LINE Friends. The decrease in operating loss from the Strategic business was primarily due to a decrease in marketing expenses related to
Fintech, despite recording an impairment loss of right-of-use assets related to LINE Friends.
For more details of profit and loss by segment, see Note 4 of the Notes to Interim Condensed Consolidated Financial Statements Unaudited.
Total assets as of June 30, 2020 were 556,695 million yen, an increase of 15,343 million yen from December 31, 2019, mainly because of
investments in associates and joint ventures.
Total liabilities as of June 30, 2020 were 392,101 million yen, an increase of
25,412 million yen from December 31, 2019, mainly due to an increase in contract liabilities as well as an increase in other financial liabilities resulting from an increase in deposits received.
The amount of total shareholders equity as of June 30, 2020 was 164,594 million yen, a decrease of 10,069 million yen from
December 31, 2019, mainly due to the recording of a loss for the period.
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