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IG Port Reports Strong Profit Growth in Q2 Despite Sales Decline

Boosted by Copyright Business, IG Port Sees Record Highs in Ordinary and Net Income Amid Challenging Market
Japan
i 3791.TSE Anime 20 Entertainment 100
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IG Port, a major player in the animation industry, has announced its financial results for the second quarter of the fiscal year ending May 2024, highlighting a remarkable increase in profitability despite a decrease in overall sales. The company’s consolidated sales dropped by 7.0% to 5,229 million yen compared to the previous year, yet it saw a significant rise in operating income (25.5% increase to 598 million yen), ordinary income (46.1% increase to 749 million yen), and net income (43.0% increase to 547 million yen). This growth is attributed mainly to the high-margin copyright business.

Following these results, IG Port has revised its full-year consolidated earnings forecast. While sales estimates are lowered to 10.44 billion yen, the projections for operating profit, ordinary income, and net income have been increased to 891 million yen, 1.101 billion yen, and 1,009 million yen, respectively. Both ordinary income and net income are expected to surpass the previous year’s record highs.

The copyright business, driving these results, saw a 23% increase in sales to 1.05 billion yen through the second quarter, and operating profit surged to 501 million yen, nearly triple the level of the same period last year. Titles like “SPY x Family,” “Attack on Titan,” and “The Ancient Magus’ Bride” led the sales, with new releases like “SPY×Family” and “Tengoku Daimakyo” exceeding expectations. Interestingly, no single title dominated the sales, indicating a well-balanced revenue stream from multiple popular works.

In contrast, the video production business, focusing on animation production, experienced challenges, recording a decline in sales to 2.8 billion yen (down 11.5%) and an operating loss of 122 million yen. This downturn is attributed to longer production periods, rising CG production costs, and higher outsourcing expenses. Major works during the period include “Kaiju No. 8,” “THE

ONE PIECE,” “Kimi ni Todoke 3RD SEASON,” “Moonrise,” “Terminator,” “SPY × FAMILY CODE: White,” and “Haikyu!! Battle at the Garbage Dump.” Despite the production business’s struggles, these high-profile titles are expected to generate significant future copyright income.

The publishing business also faced its challenges, with sales declining by 14.6% to 1,228 million yen, largely due to the dissolution and liquidation of the e-book subsidiary Lingua Franca. Operating income in publishing fell to 290 million yen, a 5.6% decrease, yet the profit margin remained robust. Popular titles in this segment included “Dahliya Wilts No More” and “The Crown Prince broke off my engagement, so I’m going to stop pretending to be an idiot.”

IG Port’s diverse portfolio approach in the anime industry, often reliant on a few major titles, appears to be paying off. The company’s ability to maintain high profit margins in the face of declining sales and challenging production costs reflects its strategic management and the strength of its intellectual properties. With the expected continued growth in the copyright segment and potential future gains from its high-profile production works, IG Port seems well-positioned to navigate the dynamic and competitive landscape of the animation industry.

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