CHANGE Holdings has replaced a profit forecast with an attributable range that straddles zero. The Tokyo-listed group now expects attributable profit for the year to March 2027 of between a ¥2.2bn loss and a ¥1.6bn profit, against ¥6.69bn to ¥7.31bn in its 14 May forecast. It has also made the year-end dividend "undetermined" instead of ¥26 a share.
Operating profit is now guided at ¥0 to ¥6.0bn, down from ¥11.5bn to ¥12.5bn, and revenue at ¥47.0bn to ¥53.0bn, down from ¥57.8bn to ¥59.0bn.
| Item | Previous forecast | Revised forecast |
|---|---|---|
| Revenue | ¥57.8bn to ¥59.0bn | ¥47.0bn to ¥53.0bn |
| Operating profit | ¥11.5bn to ¥12.5bn | ¥0 to ¥6.0bn |
| Attributable profit | ¥6.69bn to ¥7.31bn | -¥2.2bn to ¥1.6bn |
| Earnings per share | ¥99.33 to ¥108.55 | -¥32.66 to ¥23.75 |
| Year-end dividend | ¥26.00 | Undetermined |
A non-cash writedown at EG
The first hit is accounting. In the six months to September the group recognised a goodwill impairment on EG, a 53.2%-owned subsidiary that runs outsourced work such as social-media post monitoring. The parent's share of the shortfall is ¥5.97bn, all allocated to goodwill. Management says AI adoption changed EG's business environment and that profitability has fallen since the acquisition. It describes the charge as non-cash, with no direct effect on group cash flow. The half-year report says the recoverable amount rests on value in use, with a pre-tax discount rate of 12.24%.
The presentation shows EG revenue flat at about ¥11.3bn across the three twelve-month periods ending each September since the acquisition, while operating profit fell from ¥1.71bn to ¥962mn. Management attributes the gap to customers' AI automation shrinking outsourced work, including at large clients, and says the cost of AI investment was meant to be covered by gross profit that did not arrive.
The first-half operating loss was ¥2.86bn and the attributable loss ¥4.32bn. Adding back depreciation and impairment, the company reports EBITDA of ¥4.62bn, up 19.8%.
The Furusato Choice shutdown
The second hit sits in the second half. The company says a third party gained unauthorised access to Furusato Choice, run by its subsidiary Trust Bank, on 17 October. Trust Bank spotted unusual access on 19 October and halted the service that afternoon. The company has confirmed the leak of records for 4,454,097 members: names, email addresses, addresses, phone numbers, hashed passwords and estimated deduction amounts. For five people, further items were exposed, including part of their card details. The investigation into the vulnerability continues with outside experts.
The donor-facing web version reopened on 6 November after 18 days and the app on 9 November after 21 days. See also Earlier Tokyo Brief coverage. The incident came after the half-year closed, so first-half results are unaffected. The group carries cyber insurance with a ¥2bn limit. The half-year report notes that donation applications concentrate in October to December, so the second half is normally the larger revenue half.
What sets the range
The company has revised its Furusato Choice donation volume (GMV) assumption. The top of the new range assumes volume 20% below what it expected before the incident, and the bottom assumes 60% below. It cites the 18-day web shutdown and uncertainty over future giving.
The range sits mainly in the Publitech segment, which houses the donation business. Its revenue guide falls to ¥23.4bn to ¥29.4bn from ¥32.8bn to ¥34.0bn, and its operating profit to ¥7.1bn to ¥13.2bn from ¥12.5bn to ¥13.5bn. The NEW-IT Transformation segment, which includes EG, is guided to a ¥4.2bn operating loss, against a ¥1.98bn profit before, on revenue of ¥24.3bn.
Dividend
The company's policy is a dividend based on a 3.6% ratio of dividends to equity, with a payout-ratio floor of 15%. It says the uncertainty of the profit outlook is why the year-end figure is now undetermined, and it will announce whether and how much to pay once decided. The prior-year dividend was ¥23, and shareholder perks continue.