Impact of COVID-19 on Business Activities and Operating Performance

「⑩ Risks from natural disasters and infectious diseases」

「During the interim consolidated accounting period, there were no new business or other risks, nor any material changes to the business or other risks described in the annual securities report for the previous fiscal year.」

「During the consolidated fiscal year, the Japanese economy continued to recover moderately as the impact of COVID-19 subsided and socioeconomic activity moved toward normalization, supported by improvements in employment and income conditions.」

「During the six-month period ended [the current second quarter], there were no newly arising business or other risks, nor any material changes to the business and other risks described in the Annual Securities Report for the prior fiscal year.」

「During the three-month period ended [the current first quarter], there were no newly arising business or other risks, nor any material changes to the business and other risks described in the Annual Securities Report for the prior fiscal year.」

「Although the impact of COVID-19 is expected to remain uncertain, we assume that its impact on the Group's future business performance will be limited, as economic activity is gradually returning to normal due to eased restrictions following the reclassification of the disease, and inbound demand is recovering as the number of international visitors to Japan increases.」

「In the lodging business, challenging business conditions caused by COVID-19 continued through the cumulative second quarter, but sales were ¥2,900 million (up 314.3% year on year) and segment loss was ¥1,958 million (segment loss of ¥2,324 million in the same period of the previous year), due to an increase in operating facilities and improved utilization.」

「In the lodging business, sales were ¥1,055 million (up 171.8% year on year) and segment loss was ¥1,800 million (segment loss of ¥1,565 million in the same period of the previous year), mainly because the number of operating facilities increased, while challenging business conditions caused by COVID-19 continued.」

「For the three months ended June 30, the Group reported revenue of ¥10.453 billion, down 29.9% year on year, an operating loss of ¥2.685 billion, compared with an operating loss of ¥822 million, an ordinary loss of ¥2.451 billion, compared with an ordinary loss of ¥961 million, and a quarterly net loss attributable to owners of the parent of ¥1.712 billion, compared with a quarterly net loss attributable to owners of the parent of ¥715 million. This reflected, among other factors, lower revenue and profit in the Residential, Solutions and Construction Businesses and continued severe business conditions in the Accommodation Business due to COVID-19.」

「In the Hospitality business, the difficult business environment caused by COVID-19 continued, but the number of operating facilities increased as hotel development properties were handed over and some facilities resumed operations.」

「In the lodging business, sales were ¥700 million (up 58.6% year on year) and segment loss was ¥2,324 million (segment loss of ¥2,026 million in the same period of the previous year), mainly because the number of operating facilities increased as some facilities resumed operations, while challenging business conditions caused by COVID-19 continued.」

「In the Hospitality business, the number of operating facilities increased as some facilities resumed operations, but the difficult business environment caused by COVID-19 continued. As a result, the Company recorded revenue of ¥388 million, up 112.1% year on year, and a segment loss of ¥1,565 million, compared with a segment loss of ¥1,387 million in the same period of the previous year.」

「Due mainly to the continued difficult business environment caused by COVID-19 in the Hospitality business, the Company recorded revenue of ¥14,910 million, down 2.3% year on year, an operating loss of ¥822 million, compared with an operating loss of ¥425 million in the same period of the previous year, an ordinary loss of ¥961 million, compared with an ordinary loss of ¥581 million, and a quarterly net loss attributable to owners of the parent of ¥715 million, compared with a quarterly net loss attributable to owners of the parent of ¥492 million.」

「Due mainly to the closure of some MIMARU apartment hotels and continued lower occupancy, the Company recorded revenue of ¥107,257 million, down 3.0% from the previous consolidated fiscal year, and operating profit of ¥2,376 million, down 60.5%, …」

「The closure of some MIMARU apartment hotels resulted in a ¥70 million loss attributable to COVID-19, which was recorded as an extraordinary loss.」

「Due mainly to the suspension of operating activities resulting from the impact of COVID-19 and the closure of some MIMARU apartment hotels, the Residential and Hospitality businesses recorded lower revenue and lower profit than in the same period of the previous year. As a result, the Company recorded revenue of ¥38,207 million, down 11.5% year on year, an operating loss of ¥542 million, compared with operating profit of ¥2,535 million in the same period of the previous year, an ordinary loss of ¥310 million, compared with ordinary profit of ¥2,332 million, and a quarterly net loss attributable to owners of the parent of ¥141 million, compared with quarterly net income attributable to owners of the parent of ¥1,947 million. In addition, the closure of some MIMARU apartment hotels resulted in a ¥70 million loss attributable to COVID-19, which was recorded as an extraordinary loss.」

「Due mainly to the suspension of operating activities resulting from the impact of COVID-19 and the closure of some MIMARU apartment hotels, the Residential, Solutions and Hospitality businesses recorded lower revenue and lower profit than in the same period of the previous year. As a result, the Company recorded revenue of ¥15,263 million, down 29.2% year on year, an operating loss of ¥425 million, compared with operating profit of ¥2,336 million in the same period of the previous year, an ordinary loss of ¥581 million, compared with ordinary profit of ¥2,278 million, and a quarterly net loss attributable to owners of the parent of ¥492 million, compared with quarterly net income attributable to owners of the parent of ¥1,916 million. In addition, the closure of some MIMARU apartment hotels resulted in a ¥70 million loss attributable to COVID-19, which was recorded as an extraordinary loss.」