Risk of deviations from plans for new store openings and opening costs

「In addition, after carefully examining the recoverability of the fixed assets held by the Group in accordance with the Accounting Standard for Impairment of Fixed Assets, an impairment loss of ¥3,056 million was recognized at a total of 38 facilities, including facilities that had closed.」

「For the current consolidated fiscal year, the carrying amount of equipment at clubs where cash flow from operating activities has remained negative and at clubs for which a decision to close has been made was reduced to the recoverable amount, with the reduction recognized as an impairment loss under extraordinary losses.」

「On the cost side, launch costs of ¥248 million for 4 comprehensive sports clubs opening during the current fiscal year were recognized during the six months ended the second quarter.」

「A portion of the launch costs for 4 comprehensive sports clubs scheduled to open during the current fiscal year was recognized during the three months ended the first quarter.」

「The above amount includes approximately ¥400 million in launch costs and other expenses for newly opened comprehensive sports clubs, 2 of which opened in August and 1 in November.」

「During the six months ended the second quarter, launch costs were recognized for 3 comprehensive sports clubs: Sports Club Renaissance Aeon Town Fujimino 24 in Fujimino, Saitama, and Sports Club Renaissance Ebina Vina Gardens 24 in Ebina, Kanagawa, which opened in August, and Sports Club Renaissance Makita 24 in Yokohama, Kanagawa, which opened in November.」

「Cost assumptions include launch costs and other expenses for 3 comprehensive sports clubs scheduled to open during the current consolidated fiscal year, which are incorporated into the full-year plan.」

「The carrying amount of equipment at clubs where cash flow from operating activities has remained negative and at clubs for which a decision to close has been made is reduced to the recoverable amount, with each reduction recognized as an impairment loss under extraordinary losses.」

「The carrying amount of equipment at clubs where cash flow from operating activities has remained negative and at clubs for which a decision to close has been made is reduced to the recoverable amount, with each reduction recognized as an impairment loss under extraordinary losses.」

「As a result, an impairment loss of ¥433,953 thousand was recognized for the current consolidated fiscal year.」

「Operating profit increased despite higher expenses resulting from higher energy costs per unit caused by the surge in crude oil prices and the strengthening of the organization for developing new business formats. This was due to the 2.2% year-on-year increase in membership to 421,427 and the contribution to earnings from sports clubs opened in the previous fiscal year.」

「Operating profit was ¥3,782 million, down 6.9% year on year, partly due to higher energy costs per unit and increased expenses associated with the increase in new club facilities.」

「Operating profit was ¥2,781 million, down 5.3% year on year, and ordinary profit was ¥2,681 million, down 3.1%, due to the impact of launch costs for new clubs, higher energy costs per unit resulting from the surge in crude oil prices, and other factors.」

「Operating profit was ¥2,937 million, down 0.5% year on year, and ordinary profit was ¥2,768 million, down 3.2%, mainly due to higher launch costs for 4 new clubs and for Renaissance Yukarigaoka in Sakura, Chiba, which opened in January 2018. Net income attributable to owners of the parent was ¥1,815 million, up 0.5%, leaving profit broadly unchanged from the same period of the previous year.」

「Operating profit was ¥1,740 million, down 0.8% year on year and broadly unchanged from the same period of the previous year, mainly due to the impact of launch costs for 3 new clubs.」

「Operating profit decreased 19.2% year on year to ¥547 million, ordinary profit decreased 11.0% to ¥493 million, and net income attributable to owners of the parent decreased 4.6% to ¥319 million, mainly due to the impact of launch costs for 3 new clubs, including Renaissance Fukuoka Ohashi. The decline in profit for the first quarter of the current fiscal year compared with the same period of the previous year, due to the aforementioned launch costs and other factors, was in line with the plan, and there was no change to the full-year earnings forecast.」

「Opening a new club requires funding of approximately ¥300 million or more per club, including security deposits, deposits and guarantees, capital expenditures such as construction and equipment borne by the Company, and launch expenses. Accordingly, we give careful consideration to cash-flow requirements when formulating opening plans. If the number of new openings exceeds the plan, expenses for the fiscal year will increase and may affect performance. Conversely, if the number of new openings falls short of the plan, revenue growth may be affected.」