Fujita Kanko : Financial Results for the Six Months Ended June 30, 2022

FUJITA KANKO INC. Financial Results for the Six Months Ended June 30, 2022

August 9, 2022

FUJITA KANKO INC. (Code number: 9722)

Statements of Income

Financial Results for the Six Months Ended June 30, 2022

2Q cumulative net sales increased by ¥6.3 billion (53%) and operating loss contracted by ¥6.2 billion (62%) from the previous year

➤After the lifting of priority preventive measures, we captured the recovery in demand and achieved a year-on-year increase in sales and a reduction in losses in all business segments

➤Luxury & Banquet Business returned to operating profitability in 2Q (April to June) for the first time since 4Q (October

to December) 2019
		2Q 2022	2Q 2021
					2Q 2019
		1Q Actual	2Q Actual	Cumulative	Cumulative	YoY
	(Million yen)	Cumulative
	actual	actual
	Jan. to Mar.	Apr. to Jun.		actual
Net sales	7,959	10,348	18,308	11,928	6,379	33,605
	WHG Business	3,752	4,668	8,421	3,799	4,621	18,394
	Luxury & Banquet Business	2,629	3,998	6,628	5,957	670	11,014
	Resort Business	1,060	1,140	2,200	1,345	855	2,681
	Other (including adjustments)	517	540	1,058	826	232	1,514
Operating profit (loss)	(2,214)	(1,589)	(3,804)	(10,056)	6,252	(153)
	WHG Business	(1,326)	(1,295)	(2,621)	(7,310)	4,688	1,047
	Luxury & Banquet Business	(515)	111	(403)	(1,486)	1,082	(214)
	Resort Business	(273)	(313)	(586)	(880)	293	(634)
	Other (including adjustments)	(99)	(92)	(192)	(378)	186	(352)
Ordinary profit (loss)	(2,216)	(1,296)	(3,512)	(10,344)	6,831	(64)
	Extraordinary income	842	69	912	36,389	(35,477)	115
	Extraordinary losses	－	－	－	3,160	(3,160)	120
	Income taxes	(57)	16	(41)	3,484	(3,526)	62
Profit (loss) attributable to owners of	(1,316)	(1,242)	(2,558)	19,400	(21,959)	(131)
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Statements of Income (Net Sales & Operating Profit)

Financial Results for the Six Months Ended June 30, 2022

➤Supported by prefectural resident discounts and other tourism support measures, losses decreased for the fifth consecutive quarter

➤WHG Business net sales remain at around 54% against 2019 due to slow recovery

				Net Sales & Operating Profit			(Billion yen)
		2019			2021		2022
										18
										16
								Priority preventive	14
								measures lifted	12
										10
										8
										6
										4
										2
							(2.6)			0
						(3.1)			(2)
				(5.7)	(4.2)				(1.5)
						(2.2)	(4)
										(6)
2019				2021				2022
１Q	2Q	3Q	4Q	１Q	2Q	3Q	4Q	１Q	2Q
		Luxury & Banquet Business	Resort		WHG	Other	Operating Profit (Loss)		2
		Business		Business

Statement of Income

(Cost and Operating Profit Increase/Decrease Factors)

Financial Results for the Six Months Ended June 30, 2022

➤Cost reduction effects have finished and 2Q cumulative fixed operating costs decreased by 4%, or ¥700 million, from the previous year

➤Losses shrank due to the provision of facilities to the government in the WHG Business and the effect of increased revenues from a recovery in demand at existing business facilities

Fixed operating costs

(Billion yen)

Operating profit (loss)

Year on year increase/decrease factors

Land rent (0.5) billion

Fixed personnel costs (0.3) billion Utility expenses +0.2 billion

2Q 2019		2Q 2021	2Q 2022
Cumulative		Cumulative	Cumulative

Fixed personnel costs

Outsourcing costs

Other fixed operating costs

30

25

20

15

10

5

0

	2Q 2019		2Q 2021
Cumulative	Cumulative
	(0.1)		(10.0)

Reduction of

fixed

operating

costs

+0.7

(Billion yen)

2Q 2022

Cumulative

(3.8)

Recovery in

demand at

existing

business

locations, etc.

+2.6

Provision of

facilities to

the

government

+2.7

*Increase in

marginal profit

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WHG Business 2Q Overview

Financial Results for the Six Months Ended June 30, 2022

●Both occupancy rate and ADR increased year on year due to a significant year-on-year increase in occupancy during Golden Week holiday and demand stimulated by measures to support tourism

●Sales increased and losses shrankdue to the effect of increased revenues from providing facilities (building rental) to the government

●Net sales have recovered about 46% compared to 2019

During Golden Week holiday ADR: +21.6% YoY Occupancy rate: +44.7pt YoY

[Facilities provided] Total 2,294 rooms
i. Hotel Gracery Shinjuku (970 rooms)	iii. HOTEL TAVINOS Asakusa (278 rooms)
ii. Tokyo Bay Ariake Washington Hotel (830 rooms)	iv. Hotel Gracery Tamachi (216 rooms)

*i. and ii. are still being offered and iii. and iv. will resume normal business operations from April.

WHG Business

Net Sales and Operating Profit (Loss)

WHG Operational Indicators

(Billion yen)

20

18.3

15

10

5

0

1.0

(5)

(10)

2Q 2019

Cumulative

Net Sales

8.4

3.7

(2.6)

(7.3)

2Q 2021	2Q 2022
Cumulative	Cumulative

Operating Profit (Loss)

Comparison with previous year and 2019 (Jan. to Jun.)

	Compared with previous	Compared with 2019
	year
	ADR	Occupancy	ADR	Occupancy
		Rate	Rate
Total	+23.1%		+26.2pt	(42.1)％	(28.1)pt
Tokyo	+26.0％		+31.5pt	(54.9)％	(25.5)pt
Other	+18.0％			(25.7)％	(30.1)％
than		+20.9pt
Tokyo
	*Actual results for 2022
	January to March: Excluding the above facilities iii., iv. and Canal City
	Fukuoka Washington Hotel (closed until March due to construction)
	January to June: Excluding the above facilities i. and ii.

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