MIRA
INFORM REPORT
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Report Date : |
30th
May 2006 |
IDENTIFICATION
DETAILS
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Name : |
NINTENDO CO LTD |
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Registered Office : |
11-1 Kamitoba-Hokotatecho Minamiku Kyoto 601-8501
Japan |
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Country : |
Japan |
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Financials (as on) : |
31/03/2006 |
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Date of Incorporation : |
Nov 1947 |
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Legal Form : |
Limited Company |
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Line of Business : |
Manufacturers of home-use game
machines, game software. |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable
to meet normal commitments. |
Satisfactory |
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Maximum Credit Limit : |
YEN 20,570.3 MILLION |
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Status : |
Fair |
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Payment Behaviour : |
Regular
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Litigation : |
Clear |
Name
NINTENDO
CO LTD
REGD NAME
Nintendo
KK
MAIN OFFICE
11-1
Kamitoba-Hokotatecho Minamiku Kyoto 601-8501 JAPAN
Tel:
075-662-9600
Fax: 075-662-9601
URL:http://www.nintendo.co.jp/
E-Mail address: info@nintendo.co.jp
ACTIVITIES
Mfg of home-use game machines, game software
BRANCHES
Tokyo, Osaka, Nagoya, Okayama, Sapporo
OVERSEAS
Nintendo America Inc, NHR Inc, Nintendo of Canada Ltd, Nintendo
France SARL, Nintendo Benelux BV,
Nintendo Phuten Co Ltd, Nintendo (Hong Kong) Co Ltd, Nintendo
Europe GmbH, Nintendo Australia Pty,
other. (--subsidiaries)
FACTORY(IES)
Uji (3)
CHIEF EXEC
SATORU IWATA, PRES
Yen Amount
In million Yen, unless otherwise stated
SUMMARY
FINANCES FAIR A/SALES Yen
509,249 M
PAYMENTS REGULAR CAPITAL Yen
10,065 M
TREND STEADY WORTH Yen 974,091 M
STARTED 1947 EMPLOYES 3,032
COMMENT
MFR SPECIALIZING IN HOME-USE GAME MACHINES & SOFTWARE. FINANCIAL SITUATION CONSIDERED FAIR AND GOOD
FOR ORDINARY BUSINESS ENGAGEMENTS.
MAX CREDIT LIMIT: YEN 20,570.3 MILLION, NORMAL 30 DAYS TERMS.
Forecast
(or estimated) figures for 31/03/2007 fiscal term
HIGHLIGHTS
The subject company started originally as mfr of playing cards, in
Kyoto, named KK Marufuku. Name changed
as captioned in Oct 1963. Well-known
for video game system developer of home-use game machines and software. Excels in game & platform
development. Software products are
known as: Pokemon (short for “Pocket Monkey” in Japanese), Mario series,
other. Seeking ways to diversify
applications of video games, such as electronic mail boxes. Has US sales arm in Seattle. Sales in US markets account for around 40%
of total sales. The US subsidiary was
opened in 1982. Subsequently opened
subsidiaries in Germany (1990) and France (1993), followed by others to cover
European markets. For other overseas subsidiaries
(--all sales offices, and consolidating entities) see OVERSEAS above.
The sales volume for Mar/2006 fiscal term amounted to Yen 509,249
million, a 1.2% down from Yen 515,292 million in the previous term. Handheld game products “Nintendo DS” and its
software (“Touch! Generations” sold exceptionally well), etc sold well on a
worldwide basis. In the console
business, software “Nintendo GameCube”, such as “Mario Party 7” (a get-together
game that lets up to eight players play simultaneously) and the role playing
game “Pokemon XD, Gale of Darkness” each sold more than a million units. However, overall console hardware and
software sales declined, due to price markdowns overseas from harsh
competitions from rivals. The recurring
profit was posted at Yen 160,759 million and the net profit at Yen 98,387
million, respectively, compared with Yen 145,292 million recurring profit and
Yen 87,416 million net profit, respectively, a year ago. The improved profits were thanks to foreign
exchange gains of Yen 45,500 million coming from revaluation of foreign
currency assets.
For the current term ending Mar 2007 the recurring profit is
projected at Yen 110,000 and the net profit at Yen 65,000 million, despite a
17.8% rise in turnover, to Yen 600,000 million. “Touch! Generations” and its associated software lineups will
contribute. In addition to original “Nintendo
DS”, sales of updated model “Nintendo DS Lite” launched Mar 2006 will create
increasing demand. Also during the
term, a new gaming console “Wii” (which will allow users to connect to Internet
around the clock and enjoy on-line games) is scheduled for release this
autumn. With the Yen, however, reversed
course, the firm foresees a foreign currency exchange loss of Yen 27,000
million, based on forecasts of Dollar/Yen rate of 110.00 and a Euro/Yen rate of
140.00. This will likely reduce pretax
profit by 32% to Yen 110,000 million.
Sources report that the firm’s earnings prospects remain uncertain as
tougher competition expected from rivals Sony Corp and Microsoft Corp in the
next generation console business.
The financial situation is considered FAIR to GOOD and responsible
for ORDINARY business engagements. Max
credit limit is estimated to Yen 20,570.3 million, on normal 30 days terms.
REGISTRATION
Date Registered: Nov
1947
Legal Status: Limited Company (Kabushiki Kaisha)
Authorized: 400 million shares
Issued: 141,669,000 shares
Sum: Yen 10,065 million
Major shareholders (%): Hiroshi Yamauchi (9.9), Company’s Treasury
Stock (9.7), Chase Manhattan Bank (London) (6.0), Japan Trustee Services Bank T
(5.9), Bank of Kyoto (4.5), Master Trust Bank of Japan T (3.5), Nomura Trust
(3.3), JTSB (Resona Bank) (2.4), State Street Bank & Trust (1.9), foreign
owners (41.8)
No. of shareholders: 19,908
Listed on the S/Exchange (s) of: Tokyo, Osaka
Managements: Satoru Iwata, pres & CEO; Yoshihiro Mori, s/mgn
dir; Shinji Hatano, s/mgn dir; Gen’yo Takeda, s/mgn dir; Shigeru Miyamoto,
s/mgn dir; Nobuo Nagai, s/mgn dir; Masaharu Matsumoto, mgn dir; Eiichi Suzuki,
mgn dir; Kazuo Kawahara, dir; Tatsumi Kimishima, dir
Nothing detrimental is known as to the commercial morality of
executives.
Related companies: Nintendo of America, Nintendo of Canada,
Nintendo of Europe, Nintendo France, Nintendo Espana, Nintendo (Hong Kong),
other (Tot 19 as of Sept/05)
OPERATION
Activities: Manufactures, wholesales and retails video game
console & handsets, software (--95%), playing cards, Japanese karuta game,
mah-jongg play, others (--5%). The firm
officially groups together all the operations as entertainment systems
(100%). We have scrutinized the
breakdown apart from the official one.
Goods are retailed online, too.
(Overseas
sales ratio 69.2%: Americas 41.5%, Europe 25.5%, others 2.2%)
Clients: [Chain stores, game centers, consumers] Wall-mart, Ajioka
Co, Yamaguchi, other.
No. of accounts: 2,000 (wholesale div)
Domestic areas of activities: Nationwide
Suppliers: [Electric mfrs] Hosiden Corp, Mitsumi Electric, Sharp
Corp, other.
Payment record: Regular
Location: Business area in Kyoto.
Office premises at the caption address are owned and maintained
satisfactorily.
Bank References
Bank of Kyoto (H/O)
Bank of Tokyo-Mitsubishi UFJ (Kyoto)
Relations: Satisfactory
FINANCES
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(Consolidated in million yen) |
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Terms Ending: |
31/03/2006 |
31/03/2005 |
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INCOME STATEMENT |
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Annual
Sales |
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509,249 |
515,292 |
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Cost of
Sales |
294,133 |
298,155 |
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GROSS PROFIT |
215,115 |
217,176 |
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Selling
& Adm Costs |
124,766 |
105,653 |
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OPERATING PROFIT |
90,349 |
111,522 |
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Non-Operating
P/L |
70,410 |
33,770 |
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RECURRING PROFIT |
160,759 |
145,292 |
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NET
PROFIT |
98,378 |
87,416 |
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BALANCE SHEET |
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Cash |
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812,064 |
826,653 |
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Receivables |
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43,826 |
51,143 |
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Inventory |
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30,835 |
49,758 |
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Securities, Marketable |
64,287 |
20,485 |
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Other
Current Assets |
67,718 |
45,852 |
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TOTAL CURRENT ASSETS |
1,018,730 |
993,891 |
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Property
& Equipment |
559,699 |
54,420 |
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Intangibles |
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319 |
354 |
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Investments, Other Fixed Assets |
(418,045) |
83,827 |
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TOTAL ASSETS |
1,160,703 |
1,132,492 |
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Payables |
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83,817 |
111,045 |
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Short-Term Bank Loans |
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Other
Current Liabs |
98,457 |
94,404 |
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TOTAL CURRENT LIABS |
182,274 |
205,449 |
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Debentures |
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Long-Term Bank Loans |
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Reserve
for Retirement Allw |
3,299 |
3,074 |
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Other
Debts |
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862 |
2,279 |
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TOTAL LIABILITIES |
186,435 |
210,802 |
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MINORITY INTERESTS |
176 |
222 |
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Common stock |
10,065 |
10,065 |
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Additional paid-in capital |
11,585 |
11,584 |
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Retained earnings |
1,096,073 |
1,032,834 |
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Evaluation p/l on investments/securities |
10,717 |
7,194 |
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Others |
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763 |
(10,315) |
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Treasury stock, at cost |
(155,112) |
(129,896) |
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TOTAL S/HOLDERS` EQUITY |
974,091 |
921,466 |
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TOTAL EQUITIES |
1,160,703 |
1,132,492 |
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CONSOLIDATED CASH FLOWS |
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Terms ending: |
31/03/2006 |
31/03/2005 |
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Cash Flows from Operating Activities |
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46,382 |
116,571 |
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Cash Flows from Investment Activities |
-208,807 |
-11,716 |
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Cash Flows from Financing Activities |
-60,166 |
-61,447 |
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Cash, Bank Deposits at the Term End |
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617,139 |
792,727 |
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ANALYTICAL RATIOS
Terms ending: |
31/03/2006 |
31/03/2005 |
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Net Worth (S/Holders' Equity) |
974,091 |
921,466 |
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Current Ratio (%) |
558.90 |
483.77 |
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Net Worth Ratio (%) |
83.92 |
81.37 |
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Recurring Profit Ratio (%) |
31.57 |
28.20 |
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Net Profit Ratio (%) |
19.32 |
16.96 |
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Return On Equity (%) |
10.10 |
9.49 |
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RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and
principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No
caution needed for credit transaction. It has above average (strong)
capability for payment of interest and principal sums |
Large |
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56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of
interest and principal sums in default or expected to be in default upon
maturity |
Limited with full security |
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<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |