Message from the President

We would like to express our gratitude to our shareholders and investors for your continued support.

We deeply apologize to all our stakeholders, including tenants and property owners, for causing anxiety and inconvenience due to construction defects in the properties we built. We would like to express our sincere regret that the business has been very much affected by the difficulties caused by the spread of the COVID-19 with disappointing business performance and stock price.

Financial Results for the Three Months Ended June 30, 2021 (49th Fiscal Period)

We announced financial results for the three months ended June 30, 2021.
The average occupancy rates became positive compared with that of the same period last fiscal year due to the occupancy improvement measures such as top-level sales activities and weakened impact of COVID-19 spread.
Net sales were JPY100.2 billion, a decrease of JPY 3.7 billion (minus 3.6%) YoY, operating loss was JPY 1.2 billion, an improvement of JPY 5.5 billion YoY. Net loss attributable to shareholders of the parent was JPY 0.9 billion, an improvement of JPY 13.1 billion YoY, partly due to reversal of reserve for losses related to repairs of JPY 1.9 billion. All the items from net sales to net loss attributable to shareholders of the parent overachieved the plan.
On the other hand, total net assets became JPY negative 1.2 billion as a result of recording reduction of retained earnings by JPY 4.9 million because of adopting the new accounting standard for revenue recognition.

Business Strategy

As to the progress of "Notice Concerning Efforts in Excessive Liabilities Elimination" that was announced in May 2021, cost review and reduction across the board have showed effect as a result of having implemented the measures for drastic structural reforms since the fiscal year ended March 2021, and resulted in the reduction of cost of sales and SGAE by JPY 9.2 million YoY.
As a measure to improve occupancy rates, we have been promoting area intensive strategies, recovery in the number of rooms used by corporate customers, and strengthening ties with real estate agents. Furthermore we have been promoting the digital measures such as web-based customer service, apartment viewing and contract signing. We extended the scope of such digital services and newly launched in June 2021 a digitized parking lot contract. We have digitized all the process to conclude rental contracts with the customers apart from the term tenant contracts which require by law written documents to be presented to the tenants.

As a result of continuing the above mentioned measures, we plan to record operating profit of JPY 2.0 billion for the fiscal year ending March 2022 and operating profit of JPY 32.6 billion and net income of JPY 22.8 billion for the fiscal year ending March 2023, which were the profitability levels we used to record in and before the fiscal year ended March 2018.

We look forward to your continued understanding and support of our business activities in the future.

Bunya Miyao, President and CEO
August, 2021

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