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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

For the month of July 2020

Commission File Number: 001-37821

LINE Corporation

(Translation of registrant’s name into English)

JR Shinjuku Miraina Tower, 23rd Floor

4-1-6 Shinjuku

Shinjuku-ku, Tokyo, 160-0022, Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F          X                Form 40-F             

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):             

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):             


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

LINE Corporation

  (Registrant)
July 29, 2020  

By: /s/ In Joon Hwang

  (Signature)
  Name: In Joon Hwang
  Title: Director and Chief Financial Officer


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This is an English translation of the original Japanese-language document. Should there be any inconsistency between the translation and the original Japanese text, the latter shall prevail. All references to the “Company,” “we,” “us” or “our” shall mean LINE Corporation and, unless the context otherwise requires, its consolidated subsidiaries.

July 29, 2020

LINE Corporation Announces Summary of

Consolidated Financial Results

for the Six Months Ended June 30, 2020

<Prepared in accordance with the International Financial Reporting Standards (“IFRS”)

as issued by the International Accounting Standards Board (“IASB”)>

TOKYO — LINE Corporation (NYSE: LN) (TOKYO: 3938) announces the summary of its consolidated financial results for the six months ended June 30, 2020.

 

Company name:

  LINE Corporation (Stock Code: 3938) (the “Company”)

Stock exchange on which the shares are listed:

  Tokyo Stock Exchange

URL:

  http://linecorp.com/

Representative:

  Takeshi Idezawa, Chief Executive Officer

Contact:

  Kokan Ki, Executive Officer

Telephone:

  +81-3-4316-2050

Filing date of quarterly securities report: August 7, 2020

Payment date of dividends: –

Supplemental materials prepared on quarterly financial results: Yes

Financial results conference scheduled: None

(Yen amounts are rounded to the nearest million, unless otherwise noted.)

1.    Consolidated financial results for the first six months of 2020 (from January 1, 2020 to June 30, 2020)

(1)   Consolidated operating results (cumulative)

 

         (Percentages indicate year-on-year changes.)
    

 

Revenues

 

   

 

Loss from operating

activities

 

   

 

Loss before income

taxes

 

   

 

Loss for the period

 

 
For the six months ended           Millions of yen     %            Millions of yen     %          Millions of yen     %          Millions of yen     %  

June 30, 2020

    117,346       5.9       (13,950     —         (23,608     —         (24,522     —    

June 30, 2019

 

   

 

110,760

 

 

 

   

 

11.5

 

 

 

   

 

(21,816

 

 

   

 

—  

 

 

 

   

 

(28,490

 

 

   

 

—  

 

 

 

   

 

(28,029

 

 

   

 

—  

 

 

 

               
    

 

Loss attributable to the
shareholders of the Company

 

   

 

Comprehensive loss

for the period

 

   

 

Basic earnings/(loss)

per share

 

   

 

Diluted earnings/(loss)
per share

 

 
For the six months ended           Millions of yen             %            Millions of yen             %     Yen      Yen   

June 30, 2020

    (20,163     —         (24,266     —           (83.99)         (83.99)  

June 30, 2019

 

   

 

(26,619

 

 

   

 

—  

 

 

 

   

 

(31,086

 

 

   

 

—  

 

 

 

           

 

(111.44)

 

 

 

           

 

(111.44)

 

 

 


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(2)

Consolidated financial position

 

     

 

Total assets    

 

  

 

Total equity    

 

  

 

  Equity attributable    
  to the shareholders    
   of the Company    

 

  

 

  Ratio of equity      
  attributable to the       
  shareholders of the      
  Company to total      
  assets      

 

As of      Millions of yen        Millions of yen        Millions of yen      %  

June 30, 2020

   556,695      164,594      142,420      25.6  

December 31, 2019

   541,352      174,663      158,133      29.2  

 

2.

Cash dividends

 

      Annual dividends per share
     

 

  First quarter-end  

 

  

 

  Second quarter-end  

 

  

 

  Third quarter-end  

 

  

 

  Fiscal year-end  

 

  

 

    Total    

 

      Yen      Yen      Yen      Yen      Yen  

For the year ended December 31, 2019

   —        0.00      —        0.00      0.00  

For the year ending December 31, 2020

   —        0.00                 

For the year ending December 31, 2020 (Forecast)

             —        —        —    
  Note:    Revisions to the cash dividends forecasts most recently announced: None
     Cash dividend forecasts for the year ending December 31, 2020: While the Company has decided not to pay interim dividends, it has not yet made a decision regarding its year-end dividends.

 

3.

Consolidated earnings forecasts for 2020 (from January 1, 2020 to December 31, 2020)

Amid rapid international and domestic changes, there is a level of uncertainty within the mobile applications market for smartphones and other mobile devices, the main business of the Company and its subsidiaries (collectively, the “Group”). As the state of this market significantly impacts the Group’s financial results, it is difficult to formulate a precise earnings forecast. Furthermore, as the Company’s shares are listed on the New York Stock Exchange as well as the Tokyo Stock Exchange, we are also carefully considering risks relating to U.S. securities regulations. Accordingly, an announcement concerning earnings forecasts is not made at this time.

Notes

 

(1)

Changes in significant subsidiaries during the current period (changes in specified subsidiaries resulting in change in scope of consolidation): None

 

(2)

Changes in accounting policies and estimates

 

  a.

Changes in accounting policies due to revision in accounting standard under IFRS: None

 

  b.

Changes in accounting policies due to other reasons: None

 

  c.

Changes in accounting estimates: None

 

(3)

Number of shares issued and outstanding (common stock)

 

  a.

Total number of common shares issued and outstanding at the end of the period (including treasury shares)

 

As of June 30, 2020

     241,544,142 shares  

As of December 31, 2019

     241,133,142 shares  

 

  b.

Number of treasury shares at the end of the period

 

As of June 30, 2020

     934,361 shares  

As of December 31, 2019

         1,524,392 shares  


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  c.

Average number of common shares outstanding during the period (cumulative from the beginning of the fiscal year)

 

For the six months ended June 30, 2020

     240,072,283 shares  

For the six months ended June 30, 2019

     238,856,268 shares  

Quarterly financial results reports are exempt from review procedures conducted by certified accountants or an audit firm.

For the purpose of fair disclosure in connection with the release of the financial statements by NAVER Corporation, the Company’s parent company, and timely disclosure of the Company’s Summary of Consolidated Financial Results, the Company discloses the Interim Condensed Consolidated Statement of Financial Position, Interim Condensed Consolidated Statement of Profit or Loss and segment information in advance, and other information will be released as soon as it has been prepared. Supplementary information to this earnings release, including the Group’s profit and loss by segment, will be available today at the following IR website: https://linecorp.com/en/ir/top.

Due to the spread of the COVID-19, the Group has recorded impairment loss on property and equipment and right-of-use assets in the Consolidated Financial Results for the six months ended June 30, 2020. Please refer to the IR news, “Notice of Recognition of Loss Allowance on Loan Receivables and Impairment Loss of Property and Equipment and Right-of-Use Assets”, announced on July 29, 2020 for more details.


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Index:

 

1.  Interim Condensed Consolidated Financial Statements and selected Notes

     2  

(1)   Interim Condensed Consolidated Statement of Financial Position—Unaudited

     2  

(2)   Interim Condensed Consolidated Statement of Profit or Loss—Unaudited

     3  

(3)   Notes to Interim Condensed Consolidated Financial Statements—Unaudited

     4  

Notes to Segment Information

     4  

Notes to Going-Concern Assumption

     7  

 

– 1 –


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1. Interim Condensed Consolidated Financial Statements and selected Notes

 

(1)

Interim Condensed Consolidated Statement of Financial Position - Unaudited

     (In millions of yen)  
     December 31,
2019
    June 30,
2020
 

Assets

                                                                      

Current assets

    

Cash and cash equivalents

     217,345       178,916  

Trade and other receivables

     42,680       51,967  

Other financial assets, current

     20,117       27,898  

Contract assets

     241       233  

Inventories

     4,740       11,120  

Other current assets

     10,518       9,394  
  

 

 

   

 

 

 

Total current assets

     295,641       279,528  
  

 

 

   

 

 

 

Non-current assets

    

Property and equipment

     25,024       27,205  

Right-of-use assets

     54,337       56,328  

Goodwill

     17,651       17,602  

Other intangible assets

     7,801       8,447  

Investments in associates and joint ventures

     64,194       91,158  

Other financial assets, non-current

     51,737       50,576  

Deferred tax assets

     24,095       25,214  

Other non-current assets

     872       637  
  

 

 

   

 

 

 

Total non-current assets

     245,711       277,167  
  

 

 

   

 

 

 

Total assets

     541,352       556,695  
  

 

 

   

 

 

 

Liabilities

    

Current liabilities

    

Trade and other payables

     43,710       47,041  

Other financial liabilities, current

     44,826       53,020  

Accrued expenses

     23,462       19,455  

Income tax payables

     3,963       1,722  

Lease liabilities, current

     11,487       13,568  

Contract liabilities

     25,752       33,567  

Provisions, current

     3,221       3,782  

Other current liabilities

     5,238       10,045  
  

 

 

   

 

 

 

Total current liabilities

     161,659       182,200  
  

 

 

   

 

 

 

Non-current liabilities

    

Corporate bonds

     142,851       143,211  

Other financial liabilities, non-current

     362       325  

Lease liabilities, non-current

     45,150       49,988  

Deferred tax liabilities

     1,071       966  

Provisions, non-current

     4,528       4,816  

Post-employment benefits

     9,617       10,125  

Other non-current liabilities

     1,451       470  
  

 

 

   

 

 

 

Total non-current liabilities

     205,030       209,901  
  

 

 

   

 

 

 

Total liabilities

     366,689       392,101  
  

 

 

   

 

 

 

Shareholders’ equity

    

Share capital

     96,737       97,284  

Share premium

     121,299       122,554  

Treasury shares

     (6,308     (3,872

Accumulated deficit

     (53,524     (69,335

Accumulated other comprehensive income

     (71     (4,211
  

 

 

   

 

 

 

Equity attributable to the shareholders of the Company

     158,133       142,420  
  

 

 

   

 

 

 

Non-controlling interests

     16,530       22,174  
  

 

 

   

 

 

 

Total shareholders’ equity

     174,663       164,594  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

     541,352       556,695  
  

 

 

   

 

 

 

 

– 2 –


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(2)

Interim Condensed Consolidated Statement of Profit or Loss - Unaudited

 

     (In millions of yen)  
     For the six-month period ended June 30,  
   2019     2020  

Revenues and other operating income:

                                                                      

Revenues

     110,760       117,346  

Other operating income

     1,404       1,777  
  

 

 

   

 

 

 

Total revenues and other operating income

     112,164       119,123  

Operating expenses:

    

Payment processing and licensing expenses

     (17,170     (20,451

Sales commission expenses

     (8,624     (4,808

Employee compensation expenses

     (33,775     (38,011

Marketing expenses

     (20,608     (11,131

Infrastructure and communication expenses

     (5,298     (5,601

Outsourcing and other service expenses

     (20,118     (22,973

Depreciation and amortization expenses

     (10,570     (13,109

Other operating expenses

     (17,817     (16,989
  

 

 

   

 

 

 

Total operating expenses

     (133,980     (133,073
  

 

 

   

 

 

 

Loss from operating activities

     (21,816     (13,950

Finance income

     272       173  

Finance costs

     (942     (1,024

Share of loss of associates and joint ventures

     (6,676     (6,397

Loss on foreign currency transactions, net

     (503     (410

Other non-operating income

     1,401       1,004  

Other non-operating expenses

     (226     (3,004
  

 

 

   

 

 

 

Loss before tax from continuing operations

     (28,490     (23,608

Income tax benefits/(expenses)

     461       (914
  

 

 

   

 

 

 

Loss for the period from continuing operations

     (28,029     (24,522

Profit from discontinued operations, net of tax

     0       —    
  

 

 

   

 

 

 

Loss for the period

     (28,029     (24,522
  

 

 

   

 

 

 

Attributable to:

    

The shareholders of the Company

     (26,619     (20,163

Non-controlling interests

     (1,410     (4,359
       (In yen

Earnings per share

    

Basic loss for the period attributable to the shareholders of the Company

     (111.44     (83.99

Diluted loss for the period attributable to the shareholders of the Company

     (111.44     (83.99

Earnings per share from continuing operations

    

Basic loss from continuing operations attributable to the shareholders of the Company

     (111.44     (83.99

Diluted loss from continuing operations attributable to the shareholders of the Company

     (111.44     (83.99

Earnings per share from discontinued operations

    

Basic profit from discontinued operations attributable to the shareholders of the Company

     0.00       —    

Diluted profit from discontinued operations attributable to the shareholders of the Company

     0.00       —    

 

– 3 –


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(3) Notes to Interim Condensed Consolidated Financial Statements - Unaudited

Notes to Segment Information

The Group identifies operating segments based on the internal report regularly reviewed by the Group’s Chief Operating Decision Maker to make decisions about resources to be allocated to segments and to assess performance. An operating segment of the Group is a component for which discrete financial information is available. The Chief Operating Decision Maker has been identified as the Company’s board of directors. No operating segments have been aggregated to form the reportable segments.

Under the corporate strategy to allocate the resources generated from the Core business to the Strategic business, the Company’s board of directors individually assesses the business performance of the Core business based on revenue and profitability growth and assesses the business performance of the Strategic business based on profitability as well as important non-financial KPIs such as expansion of the user base.

(1)    Description of Reportable Segments

The Group’s reportable segments are as follows:

 

Core business segment    The Core business segment mainly consists of advertising service, communication and content. Advertising services mainly include display advertising, account advertising, and other advertising. Display advertising provides advertisements on services such as LINE NEWS. Account advertising mainly includes LINE Official Accounts and Sponsored Stickers. Other advertising mainly includes advertisements on services such as livedoor Blog, NAVER Matome and advertisements appearing on LINE Part-Time Job. Communication mainly includes LINE Stickers. Content mainly includes LINE GAME.
Strategic business segment    The Strategic business segment consists of Fintech services such as LINE Pay service, and other services such as AI, LINE Friends, and E-commerce.

(2)    Profit or Loss for the Group’s reportable segments

The Group’s operating profit or loss for each segment is prepared in the same method as used in the consolidated financial statements, except that certain items such as other operating income and share-based compensation expenses are included in corporate adjustments. Also, IT development expenses and indirect expenses such as department management fees are allocated based on the information such as the hours of service provided, the number of server infrastructures used to provide the service, or the percentage of revenues. As the Company’s board of directors uses the information after eliminating intercompany transactions for their performance assessment, there is no adjustment between segments.

 

– 4 –


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For the six-month period ended June 30, 2019

 

                 (In millions of yen)  
     Reportable segments     Corporate
adjustments(1)
    Consolidated  
     Core business      Strategic
business
    Total  

Revenue from external customers

       96,355        14,405       110,760       —         110,760  

Segment profit/(loss)(2)

     16,861        (38,483     (21,622     (194     (21,816

Depreciation and amortization expenses

     6,793        3,777       10,570       —         10,570  
(1) 

Corporate adjustments include expenses such as other operating income and share-based compensation expenses.

(2) 

The amount of Segment profit/(loss) is equivalent to loss from operating activities on the Interim Condensed Consolidated Statement of Profit or Loss.

For the six-month period ended June 30, 2020

 

                 (In millions of yen)  
     Reportable segments     Corporate
adjustments(1)
    Consolidated  
     Core business      Strategic
business
    Total  

Revenue from external customers

     102,380        14,966       117,346       —         117,346  

Segment profit/(loss)(2)

     22,082        (34,716     (12,634     (1,316     (13,950

Depreciation and amortization expenses

     8,395        4,714       13,109       —         13,109  
(1) 

Corporate adjustments include expenses such as other operating income and share-based compensation expenses.

(2) 

The amount of Segment profit/(loss) is equivalent to loss from operating activities on the Interim Condensed Consolidated Statement of Profit or Loss.

The reconciliation of Segment loss to loss before tax from continuing operations is as follows:

For the six-month periods ended June 30,

 

           (In millions of yen)  
                 2019                 2020  

Segment loss

     (21,816     (13,950

Finance income

     272       173  

Finance costs

     (942     (1,024

Share of loss of associates and joint ventures

     (6,676     (6,397

Loss on foreign currency transactions, net

     (503     (410

Other non-operating income

     1,401       1,004  

Other non-operating expenses

     (226     (3,004
  

 

 

   

 

 

 

Loss for the period before tax from continuing operations

     (28,490     (23,608
  

 

 

   

 

 

 

The above items are not allocated to individual segments as these are managed on an overall group basis.

 

– 5 –


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(3)

Revenues from Major Services

The Group’s revenues from continuing operations from its major services for the six-month periods ended June 30, 2019 and 2020 are as follows.

Revenues recognized at a point in time mainly consist of revenues from LINE Friends.

For the six-month periods ended June 30,

 

(In millions of yen)
         2019              2020      

Core business

     

Advertising

     

Display advertising(1)

     22,080        31,726  

Account advertising(2)

     31,210        29,274  

Other advertising(3)

     7,239        3,906  
  

 

 

    

 

 

 

Sub-total

     60,529        64,906  
  

 

 

    

 

 

 

Communication, content, and others

     

Communication(4)

     14,601        15,198  

Content(5)

     18,829        20,866  

Others

     2,396        1,410  
  

 

 

    

 

 

 

Subtotal

     35,826        37,474  
  

 

 

    

 

 

 

Core business total

     96,355        102,380  
  

 

 

    

 

 

 

Strategic business

     

Friends(6)

     9,137        5,398  

Others(7)

     5,268        9,568  
  

 

 

    

 

 

 

Strategic business total

     14,405        14,966  
  

 

 

    

 

 

 

Total

     110,760        117,346  
  

 

 

    

 

 

 

 

(1) 

Revenues from display advertising primarily consisted of fees from advertisement on services such as Timeline, Smart Channel and LINE NEWS.

(2) 

Revenues from account advertising primarily consisted of fees from LINE Official Accounts, Sponsored Stickers and LINE Points.

(3) 

Revenues from other advertising were mainly attributable to advertising revenue from livedoor, NAVER Matome and LINE Part-Time Job.

(4) 

Revenues from communication were mainly attributable to sales of LINE Stickers and Creator Stickers.

(5) 

Revenues from content primarily consisted of sales of LINE GAME’s virtual items.

(6) 

Friends primarily consisted of revenues from sales of character goods.

(7) 

Others primarily consisted of revenues from E-commerce.

 

– 6 –


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Notes to Going-Concern Assumption

Not applicable.

 

– 7 –