Risks from natural disasters, extreme weather and infectious diseases

「Updates to the business continuity plan (BCP)」

「During the first quarter consolidated cumulative period under review, Japan's economy continued to recover moderately. Personal consumption recovered, particularly in face-to-face services, following the reclassification of COVID-19 to Category V under the Infectious Diseases Control Law, while inbound demand also increased.」

「During the nine-month consolidated cumulative period under review, Japan's economy showed signs of a gradual recovery in social and economic activity. Personal consumption began to recover despite the renewed spread of COVID-19, supported by the easing of restrictions on activities related to the disease and the transition to living with COVID-19.」

「During the first 6 months of the fiscal year, Japan's economy maintained a gradual recovery trend as economic activity became more active because restrictions on activities were not imposed, despite the impact of the seventh wave of novel coronavirus infections.」

「During the first 3 months of the fiscal year, Japan's economy continued to recover as economic activity moved toward normalization following a decline in novel coronavirus infections and the easing of restrictions on activities.」

「Our group operates businesses centered on people's movement and face-to-face services. In addition to signs of recovery in routine travel such as commuting and attending school, travel and restaurants also began to show signs of recovery after the state of emergency was lifted. However, conditions remain challenging, with passenger numbers on our principal business, shared-route buses, remaining in the mid-80% range of pre-pandemic levels.」

「During the first 3 months of the fiscal year, Japan's economic activity remained severely constrained as the spread of the novel coronavirus disease, which had continued since the previous year, led to the declaration of a state of emergency and the application of priority preventive measures. Although vaccinations had begun, the outlook remained uncertain, with no clear prospect of containing the spread of infections.」

「We estimate that, on a simple aggregate basis, the impact of the novel coronavirus disease during the fiscal year was negative ¥10,000 million on revenue and negative ¥4,000 million on operating results.」

「During the first 9 months of the fiscal year, Japan's economy continued to be significantly affected by the novel coronavirus disease. Although government economic measures provided temporary signs of recovery when the spread of infections abated, the outlook remained uncertain as infections began to spread again this winter.」

「For the assumptions and accounting estimates, including the timing of the containment of the novel coronavirus disease, described in the annual securities report for the previous fiscal year, we had assumed that the effects would continue until around September 2020. In light of the effects of the novel coronavirus disease continuing longer than expected, we revised the assumption to state that its impact on our group's results would continue until around March 2021, and made accounting estimates including impairment of fixed assets and the recoverability of deferred tax assets.」

「The environment surrounding our group, whose principal business is public transportation, became extremely challenging as the movement of people declined due to requests to refrain from going out and operating businesses to prevent the spread of the novel coronavirus disease, the rapid adoption of remote work and online classes, and a sharp decline in foreign visitors to Japan.」

「During the spread of the novel coronavirus disease, a state of emergency was declared and requests were made for people to refrain from going out, including through school and business closures. If an infectious disease for which no effective response has been established, or one with high transmissibility, were to spread, it could reduce profitability and adversely affect results and cash flow in businesses such as motor transport, chartered travel services and leisure services, which generate revenue from the movement of people.」

「Our business areas are progressing steadily due to improvements in employment and income conditions. However, the outlook remains uncertain, given tight labor supply and demand, soaring crude oil prices, a decline in South Korean tourists visiting Japan resulting from worsening Japan–South Korea relations, and the readily foreseeable impact on the travel business of snowfall shortages resulting from a warm winter and novel pneumonia.」

「Our business areas are also progressing steadily, as natural disasters were less frequent than in the previous year and employment and income conditions improved. However, the outlook remains uncertain due to factors including a decline in South Korean tourists visiting Japan resulting from worsening Japan–South Korea relations and soaring crude oil prices.」

「In the shared-route bus segment, temporary service suspensions were unavoidable due to the impact of natural disasters, including the Northern Osaka Earthquake, the Western Japan floods and Typhoon Jebi.」

「In the route bus segment, although regular route buses were substantially affected by the Northern Osaka Earthquake, the torrential rains in western Japan and typhoons, revenue increased as commuter passes performed well with the increase in commuting and school travel demand, in addition to the company’s undertaking of certain routes from public bus services and the increase in jointly operated routes.」

「In the route bus segment, although regular route buses suffered substantial damage from the Northern Osaka Earthquake, the torrential rains in western Japan and typhoons, revenue increased as commuter passes performed well with the increase in commuting and school travel demand, in addition to the company’s undertaking of certain routes from public bus services and the increase in jointly operated routes.」

「During the first quarter of the current consolidated fiscal year, there were no newly arising business or other risks. In addition, there were no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「In the service-area segment, the number of users increased during Golden Week, but revenue declined slightly due to the impact of typhoons and the opening of the Shin-Meishin Expressway in March 2018, among other factors.」

「In the service-area segment, the number of users increased during Golden Week, but results remained at approximately the same level as in the same period of the previous year due to the impact of a series of typhoons from August through September, among other factors.」

「In the service-area segment, the number of users increased during Golden Week, but results remained at approximately the same level as in the same period of the previous year due to the impact of a series of typhoons from August through September, among other factors.」

「During the first quarter of the current consolidated fiscal year, there were no newly arising business or other risks. In addition, there were no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「If abnormal weather such as a cool summer or warm winter occurs, if a natural disaster such as a typhoon or earthquake occurs, or if an infectious disease spreads in Japan, it could affect our group's results and financial condition.」

「During the cumulative third quarter of the current consolidated fiscal year, there were no newly arising business or other risks. In addition, there were no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「During the cumulative second quarter of the current consolidated fiscal year, there were no newly arising business or other risks. In addition, there were no material changes to the business or other risks described in the securities report for the previous fiscal year.」

「Revenue from arranged travel declined due to the negative reaction following the special demand from the 1,200th anniversary grand Buddhist service commemorating the founding of Mount Koya in the previous year, as well as postponements and cancellations of group tours resulting from the Kumamoto Earthquake.」

「If abnormal weather such as a cool summer or warm winter occurs, if a natural disaster such as a typhoon or earthquake occurs, or if an infectious disease spreads in Japan, it could affect our group's results and financial condition.」