Financial Data

The occupancy rate at the end of the third quarter of this fiscal year was 80.54% (up 0.83 points from the end of the same period last year), and the average occupancy rate during the cumulative third quarter of this fiscal year was 80.70% (up 1.32 points from the same period last year), enabling us to secure a stable occupancy rate. Although the occupancy rate fell slightly lower than expected due to a slump in individual-occupied units and a decrease in the number of units under management during the subject period, we have been securing a high level of corporate-occupied units of 204,415 rooms (increasing 20,000 year on year) at the end of December.

We will continue to focus on acquiring corporate-occupied units and also strive to secure individual contracts during the busiest period for apartment-seekers through opening new offices and promoting discount campaigns.

The number of managed unit was 561,084 units, decreased by 10,572 units compared to the end of the previous fiscal year.

Order received in the cumulative third quarter of this fiscal year, amounting to 3,826 million yen, fell drastically (down 90.8% from the same period last year). This has been the result of specializing order-receiving activities in areas where stable occupancy can be expected, putting the first priority on improvements in the earnings structure of the Leasing business, as in line with the Company's policy.

On the other hand, Leopalace21 promotes sales of "properties managed by their owners," which are products that can ensure orders and profit without placing burden on the Leasing business. We will also promote the installation of solar power systems which will lead to enhancing property values. We have already received orders for 2,967 apartments, and we will pursue the new branding strategy of "environmentally friendly apartments" with the cooperation of owners.

Consolidated earnings in the cumulative third quarter of this fiscal year amounted to 332.450 billion yen, a decrease in 24.586 billion yen compared to the same period last year. This was mainly due to the holding back of apartment construction as a result of the transition to a stock business model. Sales from the Apartment Construction Subcontracting division calculated at 40.859 billion yen, a decrease in 39.303 billion yen compared to the same period last year. On the other hand, the Leasing division has benefited from expanded auxiliary income and the sales of apartment security systems started from this fiscal year, and reported sales of 279.840 billion yen (an improvement of 17.916 billion yen compared to the same period last year.)

Although sales decreased, operating income turned into the black for the first time in eleven quarters, reporting gross profit of 37.015 billion yen (an improvement of 13.979 billion yen compared to the same period last year), operating income of 1.248 billion yen (an improvement of 21.712 billion yen compared to the same period last year) and net loss of 2.061 billion yen (an improvement of 25.773 billion yen compared to the same period last year).

In the Leasing division, operating income amounted to 2.971 billion (compared to operating loss amounted to 24.049 billion in the same period last year). This was due to an effect of 10.6 billion yen generated from the decrease in reserve for apartment vacancy loss (compression of cost of sales) associated with improved occupancy rates owing to a rise in corporate contracts and cost cutting efforts, etc.

Although the Apartment Construction Subcontracting division has continuously been striving to tackle cost reduction like controls on input prices and review of offices and human resource, etc., it posted an operating profit of 1.697 billion (76.6% decrease compared to the same period last year) in proportion to a reduction in sales.