Fujita Kanko : Financial Results for the Six Months Ended June 30, 2023

FUJITA KANKO INC. Financial Results for the Six Months Ended June 30, 2023

August 10, 2023

FUJITA KANKO INC. (Code number: 9722)

Statements of Income

Financial Results for the Six Months Ended June 30, 2023

2Q cumulative net sales and operating profit increased by ¥10.8 billion and ¥5.7 billion, respectively, from the previous year, capturing the recovery in inbound demand and domestic tourism demand

➤Compared with 2019, net sales dropped by ¥4.4 billion, but operating profit increased by ¥2.0 billion as break-even net sales were lowered

			2Q 2023	2Q 2022
				2Q 2019	Compared
	1Q Actual	2Q Actual	Cumulative	Cumulative	YoY
	Cumulative	with 2019*
	actual	actual
(Million yen)	Jan. to Mar.	Apr. to Jun.		actual*
Net sales	13,163	15,999	29,162	18,308	+10,854	33,605	(4,442)
WHG Business	7,297	9,122	16,419	8,421	+7,998	18,394	(1,975)
Luxury & Banquet Business	3,718	4,941	8,660	6,628	+2,032	11,295	(2,635)
Resort Business	1,579	1,541	3,120	2,200	+920	2,681	+439
Other (including adjustments)	567	394	962	1,058	(95)	1,233	(270)
Operating profit (loss)	53	1,858	1,912	(3,804)	+5,716	(153)	+2,066
WHG Business	280	1,609	1,889	(2,621)	+4,511	1,047	+841
Luxury & Banquet Business	(36)	682	646	(403)	+1,049	(219)	+865
Resort Business	(69)	(330)	(400)	(586)	+186	(634)	+234
Other (including adjustments)	(120)	(103)	(223)	(192)	(31)	(347)	+124
Ordinary profit (loss)	54	2,450	2,504	(3,512)	+6,017	(64)	+2,569
Extraordinary income	627	－	627	912	(284)	115	512
Extraordinary losses	19	20	40	－	+40	120	(79)
Income taxes	9	9	19	(41)	+60	62	(43)

Profit (loss) attributable to owners of	653	2,420	3,073	(2,558)	+5,632	(131)	+3,204
parent

* Due to changes in some segments to which sales facilities belong in accordance with organizational changes, the segment information for FY2019 is stated based on the segments after the change.

1

Statements of Income (Net Sales & Operating Profit)

Financial Results for the Six Months Ended June 30, 2023

➤WHG Business saw net sales in 2Q recover to 2019 level ➤In Resort Business, quarterly net sales have been above

2019 results since 2022 4Q

Net Sales & Operating Profit

Net sales quarterly	2022	2023		2023
comparison with
4Q	1Q		2Q
2019
WHG	70%	82%		97%
Luxury & Banquet	75%	74%		79%
Resort	125%	118%		115%

		2019			2022				2023	(Billion yen)
					Priority	Border control eased		Movement	COVID-19 was
					National travel		reclassified to Class	20
					preventive		restrictions
					assistance program		5 under the
					measures lifted		relaxed	Infectious Diseases
					started
								Control Law
									18
										16
										14
										12
										10
										8
										6
									2.7	4
						0.3	1.2	0.9		2
										0
(0.6)	0.5		1.0			(0.5)	0.3	0.05	1.8	(2)
(0.5)		(1.5)
					(2.2)
2019				2022			2023
1Q	2Q	3Q	4Q	1Q	2Q	3Q	4Q	1Q	2Q

WHG Business

Luxury & Banquet Business

Resort Business

Other

Operating Profit (Loss)

EBITDA

2

(Operating profit + Depreciation）

Statement of Income

(Operating Profit Increase/Decrease Factors)

Financial Results for the Six Months Ended June 30, 2023

Operating profit (loss)	Break-even net sales
Year on year increase/decrease factors

2Q 2019	2Q 2022	2Q 2023
Cumulative	Cumulative	Cumulative

						0.12	1.91
			1.54	0.67		Other
				Resort
				Business		0
		5.98
(0.15)
		L&B
			Business*

(3.80)

(Billion yen)

35

30

25

20

15

10

5

33.618.329.1

operating costs>

■YoY

Labor costs +1.39 billion Land rent +0.5 billion Utility expenses +0.41 billion

■Ref: Vs. 2019

Labor costs (2.86) billion Depreciation (0.67) billion Advertising expenses (0.17) billion Taxes and dues (0.15) billion

WHG

Business

(2.62)

Increase of

fixed

operating

costs

Increase in

marginal profit *Luxury & Banquet Business

0

2Q 2019	2Q 2022	2Q 2023
Cumulative	Cumulative	Cumulative

Net sales		Break-even net sales

3

WHG Business 2Q Overview

Financial Results for the Six Months Ended June 30, 2023

Number of inbound accommodation guests increased primarily in Tokyo and Kansai areas Sales and operating profit increased by ¥7.99 billion (95%) and ¥4.51 billion YoY, respectively Compared with 2019, sales decreased by ¥1.97 billion (11%), but operating profit increased by ¥0.84 billion

●45% of the ¥7.9 billion increase in sales is attributable to those from Shinjuku WH and HG Shinjuku

*HG Shinjuku was provided to government until February and resumed normal operation in March

WH	: Washington Hotel
HG	: Hotel Gracery

●Tokyo: Both ADR and occupancy rate exceeded the 2019

results at Shinjuku WH and HG Shinjuku

●Other than Tokyo: ADR of Sendai WH, Hiroshima WH and HG Seoul were above 2019 results, but occupancy rate is still on a path to recovery, including other facilities

WHG Business

Net Sales and Operating Profit (Loss)

(Billion yen)

			18.39
	15
						16.41
	10
				8.42
	5
	0
	1.04	(2.62)	1.88
	(5)
		2Q 2019	2Q 2022	2Q 2023
			Cumulative	Cumulative	Cumulative
					Net Sales		Operating Profit (Loss)

WHG Operational Indicators

Comparison with previous year and 2019

		Compared with previous	Compared with 2019
		year
	Jan. to Jun.
	ADR		Occupancy	ADR	Occupancy
			Rate		Rate
	Total	+82.7%		+25.1pt	+5.7%		(3.0)pt
	Tokyo	+118.8%		+26.2pt		(1.3)%		+0.8pt
	Other than	+48.2%		+22.3pt		+10.8%		(7.5)pt
	Tokyo
	Changes during the period from 2Q 2019 to 2Q 2023
	Impact of closure or changes in business format: ¥(2.54) billion in net sales
	(Yokohama Isezakicho WH, Kansai Airport WH and other)
	Impact of new openings: +¥1.58 billion in net sales
	(HG in Taipei and Osaka Namba, and HOTEL TAVINOS in Hamamatsucho,
	Asakusa and Kyoto)						4