Impact of COVID-19 on Economic Activity and Demand for Security Services

「During the nine-month period ended 31 December, the Japanese economy remained on a gradual recovery track due to the normalization of economic activity following the reclassification of COVID-19 to Category V and the recovery in inbound demand. However, the outlook remained uncertain due to the prolonged situation in Ukraine, surging raw material and energy prices and volatility in financial markets.」

「With COVID-19’s legal classification changed to Category V, economic activity showed signs of a gradual recovery.」

「Although image-related services performed steadily, revenue in the electronic security segment for the nine months ended in the third quarter declined to ¥16.003 billion, down 2.9% year on year, due in part to the review of security operations in response to the impact of COVID-19.」

「Although image-related services performed steadily, revenue in the electronic security segment for the first six months of the fiscal year declined to ¥10.652 billion, down 2.3% year on year, due in part to requests to review security operations in response to the impact of COVID-19.」

「In the manned security segment, sales for the nine-month period of the first quarter under review were ¥7,995 million, down 2.5% year on year, due to customers’ revisions to their security services in response to the impact of COVID-19.」

「Regarding the impact on the performance of our group, we believe that short-term economic fluctuations are unlikely to have a significant impact because most of our security contracts are continuing contracts, excluding temporary security contracts and similar arrangements. However, the slowdown in economic activity could temporarily slow our growth.」

「During the nine-month period of the third quarter under review, Japan’s economy remained extremely difficult as corporate activity was affected by COVID-19, with repeated declarations of a state of emergency and implementation of priority preventive measures. Meanwhile, as the number of infected people has been trending downward with the rising vaccination rate, restrictions on socioeconomic activity have gradually been eased and the economy is expected to recover, although the recovery has been gradual.」

「During the six-month period ended 30 September, the Japanese economy remained in a difficult situation as infections spread due to the increase in COVID-19 variants, despite expectations that the holding of the Tokyo Olympic and Paralympic Games would support an economic recovery. Going forward, the economy was moving toward improvement as overseas economies resumed activity with the expansion of vaccinations, but the effects of the economy's continued deterioration caused by the spread of the virus to date are also expected to persist, and concerns remain that conditions will continue to be uncertain.」

「During the three-month period ended 30 June, the Japanese economy remained in a difficult situation due to the spread of COVID-19, including the declaration of the third state of emergency in April. Going forward, economic activity is expected to recover gradually following the start of vaccinations, but the effects of the economy's continued deterioration caused by the spread of the virus to date are also expected to persist, and concerns remain that conditions will continue to be uncertain.」

「During the nine-month period ended 31 December, the Japanese economy remained in a difficult situation due to the impact of COVID-19, although signs of a temporary recovery emerged after the state of emergency was lifted. However, the reissuance of the state of emergency amid the resurgence of infections is expected to leave the outlook even more uncertain.」

「During the six-month period ended 30 September, various economic activities were restricted by the spread of COVID-19, causing corporate performance and personal consumption to deteriorate. Although economic activity resumed after the state of emergency was lifted, there was no clear prospect of an end to the pandemic, and concerns remained that its adverse impact on the economy would be prolonged.」

「The global spread of COVID-19 led to the decision to postpone the Tokyo Olympic and Paralympic Games, and the declaration of a state of emergency in April restricted economic activity, causing the economy to slow rapidly.」

「However, the slowdown in economic activity could temporarily slow our growth. This is because negotiations with some business partners may take longer, and various events and projects may be cancelled. Over the medium to long term, we are also concerned that customers may request reductions in security services as their business performance deteriorates.」