Can the nursing care business continue to grow profits while maintaining high utilization?

Nursing care revenue in Q1 was ¥6,140.5 million and segment profit was ¥565.5 million, resulting in a segment margin of approximately 9.2%. Revenue growth was limited to 1.6%, but profit increased 4.9%, suggesting that higher occupancy rates and the expansion of the facility base through business acquisitions provided some support for profit growth. In FY2026, full-year revenue was ¥24,457.8 million, segment profit was ¥1,773.5 million and the segment margin was approximately 7.3%, making it important to determine whether the Q1 margin improvement was temporary or will persist through H1 and beyond.

In terms of utilization, the average occupancy rate at existing facilities was 95.6%, up 1.7 percentage points from the same period of the prior year. The turnover rate was 2.5%, while the number of beds was 5,795, down 48 year on year. This suggests that revenue may be growing through higher utilization at existing facilities rather than simply through an increase in bed capacity. In H1, we will assess whether occupancy can be maintained around 95% and whether the turnover rate has risen from 2.5%.

At the end of the period, the number of nursing care facilities was 122 and the number of operating sites was 202, representing an increase of 4 facilities year on year. By comparison, the figures at the end of FY2026 were 116 facilities and 195 operating sites, so the Q1 increase includes changes in the scope of consolidation resulting from share acquisitions and business transfers. In the H1 results, a key issue will be whether the company discloses occupancy, revenue, segment profit, goodwill and depreciation separately for existing and acquired facilities.

H1 results for the same period of the prior year were revenue of ¥12,227.0 million and segment profit of ¥996.9 million, making the ability to exceed these figures the first benchmark for the current H1. Following the opening of new facilities, personnel and facility maintenance costs tend to precede revenue generation. At the same time, the company is promoting the recruitment of foreign personnel, internal certification programs and operational efficiency through DX. In H1, we will assess whether these measures are specifically reflected in lower personnel, temporary staffing and utility costs or improved margins, and the extent to which upfront costs for new facilities were incurred.