Fujita Kanko : Financial Results for the Three Months Ended March 31, 2024

FUJITA KANKO INC.

Financial Results for

the Three Months

Ended March 31, 2024

May 9, 2024

(Code number: 9722)

Consolidated Statements of Income

・Inbound demand recovered significantly

・Tourism demand expanded in the domestic market as well compared with the 1Q of the previous year, when movement restrictions were in place amid the impact of COVID-19

• By capturing these demands through strengthened overseas sales, improvement of product competitiveness, and other efforts, net sales and operating profit increased by ¥3.82 billion and ¥2.00 billion, respectively, year on year

		2024	2023	YoY
Unit: Million yen	1Q Actual	1Q Actual
Net sales	16,985	13,163	+3,821
Operating profit	2,056	53	+2,002
Ordinary profit	2,177	54	+2,122
Extraordinary income	131	627	(496)
Extraordinary losses	367	19	+348
Income taxes	271	9	+261
Profit attributable to	1,669	653	+1,016
owners of parent
			1

Net Sales & Operating Profit Breakdown by Business

・ADR (average daily rate) increased mainly in WHG business

・Net sales increased year on year in all businesses through expanded sales of high-value-added products and acquisition of inbound demand

			2024	2023	YoY
			1Q Actual	1Q Actual
	Unit: Million yen
Net sales	16,985	13,163	+3,821
	WHG Business	10,229	7,373	+2,855
	Luxury & Banquet Business	4,045	3,718	+327
	Resort Business	2,416	1,579	+837
	Other (including adjustments)	293	491	(197)
Operating profit (loss)	2,056	53	+2,002
	WHG Business	1,901	286	+1,615
	Luxury & Banquet Business	48	(36)	+84
			105	(69)	+175
	Resort Business
	Other (including adjustments)	0	(126)	+127

*Due to changes in some segments to which operating facilities belong following organizational changes, the segment information for 2023 is stated based on the segments after the change

2

Net Sales: Increase/Decrease by Business

・WHG Business of which ADR increased drove net sales

・In Luxury & Banquet Business, the number of guests increased also in wedding, banquet, and restaurant

Unit: Million yen

2023 1Q Net sales	13,163
	Accommodation	+2,765
WHG
	Other	+89
	Wedding	+131
	Banquet	+96
Luxury &	Restaurant	+59
Banquet
	Accommodation	+58
	Other	(19)
	Accommodation	+725
Resort	Day trip and	+36
leisure
	Other	+75
Other (including adjustments)	(197)
2024 1Q Net sales	16,985

3

Operating Profit: Increase/Decrease by Factor

・While there were impacts of the increases in labor costs (new recruitment, wage raise, etc.) and land rent, the increase in marginal profit of each business largely exceeded them

Unit: Million yen

2023 1Q		53
Operating profit
Increaseofmarginalprofit duetotheincreaseofnet sales		WHG
		Luxury &
		Banquet
		Resort
Increase in labor costs
Increase in land rent
Increase in other costs
2024 1Q
Operating profit

+2,210

+239

+595

(480)

(229)

(332)

2,056

Ratio of fixed operating costｓ

(to net sales)

• Decreased compared with before COVID-19

2019	1Q	79.0%
	▼
2023	1Q	77.2%
	▼
2024	1Q	64.9%

4

WHG Business

・Continued to implement measures to strengthen overseas sales and send inbound customers to regional facilities; the number of inbound accommodation guests increased (+54.3% YoY in WHG as a whole, inbound ratio +11.9pt)

・Strengthened capturing tourism demand both in Japan and overseas, the number of average accommodation guests per room increased

• ADR rose significantly mainly at facilities located in the Tokyo metropolitan area, including Shinjuku Washington Hotel and Hotel Gracery Shinjuku
• Net sales and operating profit increased by ¥2.85 billion and ¥1.61 billion, respectively, year on year, in the

business as a whole

* "Hotel Gracery Shinjuku" had been provided for the government until the end of Feb 2023 (whole building rental)

Net Sales		Operating Profit	ADR (Yen)

(Million yen)	10,229	(Million yen)	14,849	16,920
			11,847
		Other	10,821	11,567
				9,853
		+89
7,373
		Accommodation	Total		Tokyo	Other than
		+2,765	1,901			Tokyo
			Occupancy Rate
		286	84%86%	89%90%
				82%
2023	2024	2023	2024			78%
1Q	1Q	1Q	1Q

• ADR increase effect is +¥2,508 million out of +¥2,765 million in accommodation

Total

Tokyo

Other than Tokyo

*Due to changes in some segments to which operating facilities belong following organizational			2023 1Q		2024 1Q
changes, the segment information for 2023 is stated based on the segments after the change	*Serviced apartments ISORAS CIKARANG is excluded for operational indicators	5

Luxury & Banquet Business

・Continued to implement sales measures for high-value-added products at Hotel Chinzanso Tokyo; sales as well as number of guests per use increased in each business, resulting in YoY net sales increase in all businesses

• Net sales and operating profit increased by ¥0.32 billion and ¥0.08 billion YoY, respectively, for the business as a whole

Net Sales

Operating Profit

(Million yen)	4,045	(Million yen)
	Other
3,718		(19)

VHotel Chinzanso Tokyo

ADR (Yen) Occupancy Rate

Accommodation
+58
Banquet	48
+96
Restaurant
+59
0
Wedding
+131

	55,437
42,660
2023	2024
1Q	1Q

65% 53%

2023 2024

1Q 1Q

		(36)
2023	2024	2023	2024
1Q	1Q		1Q	1Q

Wedding	Wedding	Wedding
Average number of	Sales per ceremony
Number of ceremonies	guests per ceremony	(thousand yen)

"Hotel Chinzanso Tokyo"

 Wedding +¥131 million

YoY plus for all of number of ceremonies, average number of guests per ceremony, and

sales per ceremony

 Restaurant/Banquet

Number of guests for use increased YoY, +2.7% for restaurant, +14.4% for banquet

 Accommodation +¥58 million

ADR increase effect is +¥162 million; while occupancy rate fell to negative YoY, RevPAR

271	282
		44	49
2023	2024	2023	2024
1Q	1Q	1Q	1Q

3,676	4,044
2023	2024
1Q	1Q

(Occupancy rate x ADR) rose

*Calculation of these three metrics did not include cases	6
where only a ceremony was held

Resort Business

• At "Hakone Kowakien Ten-yu," ADR rose with favorable sales of high-value-added products such as upgraded meal plans. In addition, the occupancy rate rose with the increase of weekday use by attracting inbound visitors and through other initiatives

・ADR and occupancy rate of "Hakone Kowakien Hotel," which opened in July 2023, also remained steady from the previous year

• Net sales and operating profit increased by ¥0.83 billion and ¥0.17 billion YoY, respectively, for the business as a whole

*Hakone Kowakien Hotel opened in July 2023

Net Sales		Operating Profit	ADR (Yen)	Occupancy Rate

(Million yen)	2,416	(Million yen)		54,102	89%
			48,575
		Other				83%
						73%
		+75			32,791
		Day trip and
		leisure
1,579		+36
			105	Ten-yu	Kowakien	Ten-yu	Kowakien
				Hotel		Hotel
		Accommodation			2023 1Q	2024 1Q
		+725			Yunessun Visitors
		0
				(thousand people)
		(69)			75	107
2023	2024	2023	2024
1Q	1Q	1Q	1Q
 The Hakone Kowakien area accounted for +¥718 million out of +¥725 million for		2023	2024
accommodation due to the opening of "Hakone Kowakien Hotel," ADR increase effect at
	1Q	1Q
"Hakone Kowakien Ten-yu," and other factors
				7

Status of inbound tourism

			2024 1Q Actual	YoY
Number of inbound accommodation	498 thousand people	+52.3%
guests (at domestic facilities only)
Total number of accommodation guests	1,015 thousand people	+19.5%
Ratio of inbound guests	49.1%	+10.5pt
	WHG Total	51.4%	+11.9pt
	Hotel Chinzanso Tokyo		+2.7pt
	29.1%
				+1.6pt
	Hakone Kowakien Ten-yu	41.3%
				‒
	Hakone Kowakien Hotel	9.6%

Number of inbound accommodation guests Increase/Decrease by country

Number of inbound accommodation guests Breakdown by country

2023 1Q	327 thousand people		China	Taiwan	U.S.	Thailand Australia
Chine	+66 thousand people		14.1%	10.7%	9.2%	5.0%	4.6%
Australia	+21 thousand people	2023 1Q	South Korea				Other
U.S.	+19 thousand people	327 thousand	32.1%				24.3%
people
South Korea	+12 thousand people				U.S.	Taiwan Australia	Thailand
Taiwan	+11 thousand people				9.9%	9.3%	7.3%	3.7%
Other	+40 thousand people	2024 1Q	South Korea	China					Other
2024 1Q	498 thousand people	498 thousand	23.6%	22.7%				23.5%
people

*Figures for China include guests from Hong Kong	*Set 327 thousand people and 498 thousand people as 100 percent
for 2023 1Q and for 2024 1Q, respectively	8

Balance Sheets

・Net assets increased by ¥1.52 billion to ¥27.49 billion compared to the end of the previous year Retained earnings increased by ¥1.66 billion, while capital surplus decreased by ¥0.40 billion due to the payment of Class A preferred dividend

Unit：Million yen

End of March 2024

End of December 2023

Change

	Current assets	24,310	21,293
	Non-current assts	72,007	72,202
Total assets	96,317	93,496
	Current liabilities
	28,469	30,365
	Non-current liabilities	40,352	37,156
	Total liabilities	68,821	67,521
	Total net assets	27,495	25,974
Total liabilities and net	96,317	93,496
assets
Equity ratio
28.5%	27.8%
Total borrowings
42,156	40,021

+3,016

(195)

+2,821

(1,895)

+3,196

+1,300

+1,521

+2,821

+0.8pt

+2,135

9