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Sega Sammy Lowers Half Year Forecasts

Slower than expected sales of pachinko machines have forced Sega Sammy Holdings to lower its first half yearly forecasts, from a net loss of $42.7 million to $183.7 million. Revenues have also been hit, with changes to full year forecasts expected soon.
Officials from Sega Sammy Holdings have announced that the company is lowering its expectations for the fiscal first half of the year, ended September 30th. Previous estimates had suggested a net loss of ¥5.0 billion ($42.7m), but this has now been increased to ¥21.5 billion ($183.7m). As the holding company combining both pachinko maker Sammy and video games publisher Sega, it is Sammy which has the most influence on financial results as a whole. In this case, slower than expected sales of pachinko machines has lead to revenue forecasts being cut from ¥310 billion ($2.65bn) to ¥230 billion ($1.97bn). An operating profit of ¥14 billion ($119.6m) had been expected for the first half of the year, but this has now been altered to an operating loss of ¥7.0 billion ($59.8m). According to website TradingMarkets.com the company is reviewing guidance for the full year in the face of a “severe business climate”. Current full year forecasts, for the financial year ending March 31st 2008, suggest revenues of ¥670 billion ($5.72bn), with a net profit of ¥35 billion ($299.0m) and an operating profit of ¥70 billion ($598.0m). The exact influence of Sega’s video game business on the forecasts has not been made clear, but in Sega Sammy’s last quarterly results, which showed a net loss of ¥5.08 billion ($43.4m), the company’s consumer business saw sales dip slightly to ¥16 billion ($137.4m).

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