Seibu Holdings Inc. (9024) Earnings Call Transcript & Summary

I will now explain using the presentation titled Overview of Financial Results for the 3 months ended June 30, 2021. Please turn to Page 3. These are the financial results of the first quarter. The business environment remained tough with the COVID-19 infections and the state of emergency being declared. However, we achieved a year-on-year growth of 38% in operating revenue. As for profit, we secured a positive EBITDA of JPY 7.4 billion, thanks to revenue growth as well as cost control and both operating profit and profit attributable to owners of parent improved year-on-year. Fixed expenses declined by JPY 9 billion compared to 2 years ago, the first quarter of the fiscal year ended March 2020. As explained on Page 8, there was a JPY 7.6 billion decline in fixed expenses of the Hotel and Leisure business, mainly due to reductions in personnel expenses, SG&A and utility costs. We have transferred JPY 3 billion of fixed expenses during the period of business suspension of some of our hotels in this first quarter to extraordinary losses. We have outlined the breakdown and details in the table at the bottom right of Page 5. Most items are related to the Hotel and Leisure business. Other than that, please see Pages 4 and 5 for the factors that led to increases and decreases in revenue and profit. Starting from this fiscal period, we have applied the accounting standards for revenue recognition. We have outlined the changes as well as the impact from this application in the notes to the quarterly consolidated financial statements in our kessan tanshin quarterly disclosure. So please take a look. Next, please turn to Page 7. In terms of business status in the first quarter, we have outlined the status as of this fiscal period on the right and the status of a year ago on the left. In this fiscal period, we suspended or consolidated operations in some of our facilities in the domestic and overseas hotel operations, while in the Seibu Lions business, we held games with limited capacity of visitors. Please turn to Page 8. We explained some of our major initiatives on Pages 8 and 9. In terms of the asset-light business operation, the transfer of Seibu Construction shares was completed on July 1, and we are selecting which assets will be subject to disposal and liquidation. We plan to complete the selection process and make an announcement by the end of the calendar year 2021. As for lowering the breakeven point, I explained the reduction we achieved in fixed expenses during the first quarter, and we will continue our cost control, including adapting to changes in the business environment as well as the progress we make in our results in the second quarter onwards. Next, please turn to Page 26. There have been no changes to the consolidated earnings forecast since the forecast announced in May. On Page 27, we have highlighted the current business trends in railway and hotel operations. So please take a look. That is all from me. Thank you.