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

Based on recent trends in our operations, we have revised down our first half forecast. Please see the disclosed material for the revised figures as well as the main reasons for the ups and downs from the previous forecast. As for the full year forecast, we are currently assessing the external environment as well as countermeasures such as cost reductions and therefore, have not made any changes as of today. As for the external environment in the second half, we expect the movement of people to resume, thanks to the easing of restrictions following progress made in vaccine injections as well as the commencement of the use of drugs to treat COVID-19. We are currently assessing the extent of the anticipated recovery while also considering taking our cost reduction efforts a step further. First half operating revenue is expected to be JPY 26 billion lower than our previous forecast due to factors including the extension of the state of emergency causing demand mainly during the summer to be weaker than expected. Railway transportation revenue in the Urban Transportation and Regional segment for the first half when compared to the first half of the year ended March 2020 is expected to be minus 24% for commuter and minus 31% for non-commuter. Room occupancy in the hotel segment for the second quarter of July to September is expected to be around 30%. And all 3 metrics will be below our previous forecast. In terms of our operating profit in the first half. Despite cost control measures such as the reduction and postponement of spending, reduction of bonuses and reducing or suspending operations in line with demand, as well as booking part of our fixed expenses during the temporary suspension of operations as extraordinary losses, the impact of lower operating revenue will outweigh these factors, resulting in an operating loss of JPY 5 billion. Lastly, the extraordinary income and losses for the first half. As for the major differences from the previous forecast, we have included the actual figures for the first quarter as well as the forecast for the second quarter for subsidies for employment adjustment in extraordinary income and loss on temporary suspension of operations, fixed costs during the suspension in extraordinary losses. Thank you for your attention.