Sony Corp’s profits rose by 38.8% year-on-year in fiscal Q1 2015.
In the three months ending June 30, operating income increased ¥27.1 billion year-on-year, to ¥96.9bn ($794m, or £500m). According to the released earnings announcement, the increase was primarily due to an increase in operating income in the company’s music business, as well as an increase in sales in its devices.
Music sales increased 8.5% YoY – a 3% decrease on a constant currency basis – to ¥130.2bn ($1bn, or £671.5m) primarily due to the impact of the depreciation of the yen against the US dollar.
The decrease in sales on a constant currency basis was primarily due to lower recorded music sales, which Sony attributed to a “continued contraction of the physical music market”. Best-selling titles for the label included Meghan Trainor’s Title (pictured), Shogo Hamada’s Journey of a Songwriter and Francis Cabrel’s In Extremis.
Operating income for music increased 58.2%, from ¥20.1bn year-on-year to ¥31.8bn ($260m/£164m).
The rise was largely down to the $151m (¥18.1bn) gain on the remeasurement to fair value of Sony Music Entertainment’s 51% equity interest in The Orchard (which had previously been accounted for under the equity method), as a result of SME increasing its ownership interest to 100%, as well as the positive impact of foreign exchange rates.
Also of note in the financial results is Sony’s disc manufacturing business in Japan – the sector was previously included in “All Other”, but is now included in the music portion of its finances. According to the statement, “Sony realigned its business segments from the first quarter of the fiscal year ending March 31, 2016 to reflect modifications to its organisational structure as of April 1, 2015, primarily repositioning certain operations in All Other and the Devices segment”.