Dynam Japan Holdings, Japan’s second largest pachinko operator, saw its net profit increase by 53.6% to ¥8.34 billion (HK$574 million) in the six months to 30 September 2018 as the company continues to cut costs due to growing pressures on the local pachinko industry.
The profit growth comes despite a 2.6% year-on-year fall in gross pay-ins to ¥386.84 trillion (HK$26.62 billion) and a 4.7% decline in revenue to ¥73.58 billion (HK$5.06 billion).
Dynam has been adjusting its business operations in recent years by gradually converting its high playing cost halls to low playing cost halls and standardizing their design to save on set-up costs. It is also targeting smaller populated regional areas, “opening new halls in small regional business areas with 30,000 to 50,000 residents” while “reaping the benefits of the economies of scale of multiple-hall development to limit purchasing cost of gaming machines and general prizes.”
The company has increased the number of halls under its watch from 362 in 2013 to 450 at present, with 83 of its 88 new halls in that time being low playing cost halls.
Revenue from Dynam’s high playing cost halls fell 6.8% for the half to ¥36.80 billion (HK$2.53 billion) with revenue from low playing cost halls experiencing a more modest 2.5% decline to ¥36.78 billion (HK$2.53 billion). Gross pay-ins at low cost playing halls actually increased by 0.6% for the period.
Dynam said that its hall operating expenses fell from ¥69.70 billion to ¥62.45 billion year-on-year for the half.
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