Sharp Decline in Usage and Financial Crisis Caused by COVID-19

「During the consolidated fiscal year, as the impact of COVID-19 diminished, customer usage and personal consumption recovered, while the company implemented structural reforms, including cost savings, and measures to stimulate demand.」

「During the cumulative third quarter of the fiscal year under review, customer use and personal consumption recovered, while inbound demand also remained strong. As a result, operating revenue increased 22.5% year on year to ¥1.1943 trillion. In addition, as structural reforms progressed, operating income increased 146.4% to ¥172.4 billion and ordinary income increased 169.1% to ¥161.0 billion. Net income attributable to owners of the parent for the quarter, after income taxes and other adjustments, increased 25.8% to ¥109.8 billion, despite the reversal of tax benefits under the business adaptation plan in the previous fiscal year.」

「During the six months ended the second quarter of the fiscal year under review, customer usage and personal consumption recovered as the impact of the novel coronavirus diminished, while inbound demand also remained strong.」

「During the first quarter of the fiscal year under review, as customer usage and personal consumption recovered with the diminishing impact of the novel coronavirus, we implemented structural reforms such as cost reductions and measures to stimulate demand.」

「During the consolidated fiscal year, as the impact of COVID-19, which lasted longer than expected, diminished, customer usage and personal consumption recovered, while the company implemented structural reforms, including cost savings, and measures to stimulate demand.」

「During the nine months ended the third quarter of the fiscal year under review, operating revenue rose 33.5% year on year to ¥974.8 billion, operating income was ¥69.9 billion, and ordinary income was ¥59.8 billion, reflecting the recovery in customer usage and personal consumption as the impact of the novel coronavirus diminished. In addition, under a tax incentive based on the business adaptation plan certified in April, we recorded ¥43.5 billion in previously unrecognized deferred tax assets related to tax loss carryforwards, resulting in net income attributable to owners of the parent for the quarter, after income taxes and other taxes, of ¥87.3 billion.」

「Although the outlook regarding the impact of COVID-19 remains uncertain in some respects, the Company will continue to promote initiatives throughout the group that enable customers to use its services safely and with peace of mind, while taking opportunities such as the nationwide travel support program and the removal of limits on the number of entrants to stimulate tourism demand and encourage use.」

「During the three-month period ended 30 June, operating revenues rose 47.1% year on year to ¥297.1 billion, operating income was ¥19.5 billion, and ordinary income was ¥16.9 billion, reflecting the recovery in customer use as the impact of COVID-19 diminished. In addition, the Company posted ¥43.5 billion in previously unrecognized deferred tax assets related to tax losses carried forward, due to a tax incentive under the business adaptation plan certified in April, resulting in quarterly net income attributable to owners of the parent, after deducting income taxes and other taxes, of ¥57.8 billion.」

「During the consolidated fiscal year, although operating revenue increased as a result of initiatives to thoroughly reduce costs and measures to stimulate demand in line with the infection situation, reduced usage due to the prolonged impact of COVID-19 resulted in an operating loss, an ordinary loss and a net loss attributable to owners of the parent.」

「In the third quarter, performance improved as the spread of the infection settled to some extent, demand recovered following the easing of various restrictions after the state of emergency was lifted, and costs were reduced by cancelling or postponing non-urgent initiatives. Operating revenue increased 17.5% year on year to ¥293.1 billion, operating profit was ¥6.6 billion, ordinary profit was ¥4.8 billion, and quarterly net profit attributable to owners of the parent, after deduction of income taxes and other taxes, was ¥14.6 billion.」

「In making accounting estimates, including the assessment of the recoverability of deferred tax assets, for the current quarter, we assumed that usage of the railway business, our core business, would gradually recover during fiscal 2021 and that the performance of the Group's companies would recover in broadly the same manner. However, actual consumer trends and other factors remain subject to considerable uncertainty and may affect performance from the current consolidated fiscal year onward.」

「Due to the rebound from the impact of COVID-19 and other factors, operating revenues rose 8.6% year on year to ¥436.8 billion, but the Company posted an operating loss of ¥86.1 billion, an ordinary loss of ¥87.4 billion, and a quarterly net loss attributable to owners of the parent, after deducting income taxes and other taxes, of ¥68.6 billion.」

「Although operating revenue increased 9.4% year on year to ¥201.9 billion due to the rebound from the impact of COVID-19, the company recorded an operating loss of ¥49.3 billion, an ordinary loss of ¥51.5 billion and a net loss attributable to owners of the parent, after deduction of income taxes and other taxes, of ¥32.0 billion.」

「During the fiscal year under review, operating revenue fell 40.4% year on year to ¥898.1 billion, reflecting a substantial decline in revenue, particularly in the transportation business, due to lower usage associated with the spread of the novel coronavirus. Operating loss was ¥245.5 billion, ordinary loss was ¥257.3 billion, and net loss attributable to owners of the parent for the year, after income taxes and other taxes, was ¥233.2 billion.」

「With the resurgence of the novel coronavirus and the resulting suspension of the Go To Travel Campaign, among other factors, a recovery in usage over the short term cannot be foreseen, and we recognize this as the greatest financial crisis since the Company's establishment.」

「Although a gradual recovery trend is currently visible, a recovery in usage over the short term cannot be forecast, and we recognize this as the largest financial crisis since the Company's establishment. In the six months ended the second quarter, operating revenue fell 48.8% year on year to ¥389.9 billion, operating loss was ¥144.7 billion, ordinary loss was ¥154.3 billion, and quarterly net loss attributable to owners of the parent, after deduction of income taxes and other taxes, was ¥128.1 billion.」

「In particular, we recognize this as the largest financial crisis since the Company's establishment, owing to the extremely sharp decline in railway usage, the suspension of operations and changes to operating hours at many commercial facilities, the extreme uncertainty over the period required for recovery, and changes to social and economic structures, values, and patterns of behavior.」

「From a management perspective, we recognize this as the largest financial crisis since the Company's establishment, given the extremely sharp decline in usage, the extreme difficulty of forecasting how long recovery will take, and the possibility of changes to social and economic structures, values, and patterns of behavior.」