Columbia: Turnaround on the Back of Strong Album Sales

Nikkei Kinyu Shinbum, February 16, 2007

Figures for current year boosted by withdrawal from pressing business.

On February 15, Columbia Music Entertainment (6791) announced that it looks set to return to profitability and record consolidated profits totaling ¥400 million for the year ending March 2007 (compared to losses of ¥2 billion for the previous year). This surpasses the company’s previous forecast by ¥200 million, thanks to record sales for Columbia’s leading artists exceeding expectations.

While falling 1% to ¥28.5 billion, sales are nonetheless expected to exceed the company’s previous forecasts by ¥500 million. In addition to Hitoto Yo’s greatest hits album outselling expectations, sales from other artists signed to Columbia have also helped drive up revenue, including Kimura Kaela and Hikawa Kiyoshi.

Thanks to strong sales of major albums and a reduction in the proportion of low-margin pressing and distribution sales from the previous year, Columbia has improved profitability and anticipates operating income totaling ¥700 million, an increase of 29% and ¥200 million over the company’s previous forecasts.

Consolidated figures for the period from April to December 2006, also announced on the same day, indicated net profit of ¥300 million, 2.2 times higher than the same period the previous year. In spite of a fall in revenue of ¥2.9 billion due to the company’s withdrawal from the CD and DVD pressing business the previous year and a drop in sales of 13% down to ¥21.2 billion, the elimination of an unprofitable division has helped Columbia improve profitability. Operating income was up by 4.9 times to ¥500 million.