Message from the President

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To our shareholders:

We would like to thank you for your support and patronage. Let me report on the status of our business in the first half of FY2021.

Regarding our performance:

We have diligently worked to advance our business according to our “2021-2025 business plan” in order to resolve management issues that became apparent in the COVID-19 crisis and to rebuild a strong business foundation that enables to realize our corporate philosophy and long-term vision. In the first half of this fiscal year, we have continued to operate with the highest priority on the safety and security of our clients and employees in accordance with Fujita Kanko Group's Environmental Health Policy although the situation remains challenging having the declaration of a state of emergency reissued repeatedly.

Group-wide results were 11.9 billion yen, decreased by 600 million yen compared to the first half of FY2020; operating loss was 10 billion yen, an improvement of 90 million yen compared to the first half of FY2020; and ordinary loss was 10.3 billion yen, increased by 80 million yen compared to the first half of FY2020. Substantial operating loss was improved by 2.3 billion yen compared to the first half of FY2020, after taking it into account that the fixed expenses occurred during the temporary closure period were listed as extraordinary losses in the first half of the fiscal year. The net profit in this period, which belongs to our parent company’s shareholders, was 19.4 billion yen, increased by 32.7 billion yen year over year as a result of listed extraordinary income, which included the sale of Taiko-En as well as government subsidies for employment adjustment.

Regarding the second half of FY2021:

The environment surrounding the hospitality and food & beverage industries is still harsh, having faced multiple hardships such as holding the Tokyo Olympics and Paralympics without spectators and the increasing number of newly infected people. On the other hand, as vaccinations have been progressing, we are making positive progress in necessary measures and investments in anticipation of a recovery in travel demand in the future. We opened Hotel Tavinos Kyoto on July 30th, the third property in the Tavinos brand, and plan to open Hotel Gracery Taipei on September 14th. We have also launched construction of rebuilding Hakone Hotel Kowakien as a step to redevelop Hakone Kowakien, which is a part of our business plan for increasing profitability of our resort business.

The purpose of implementing "capital increase" and "capital reduction," listed on agenda of the extraordinary general meeting of shareholders scheduled for September 27th, is aiming at further structural reforms and making growth investments. They will not trigger share dilution nor other disadvantages for our existing shareholders. Also, they will not violate listing standards. The Tokyo Stock Exchange has confirmed us that the company meets the Prime Market's listing maintenance criteria.

Finally, as for our performance in FY2021, earnings forecasts cannot be calculated rationally at this time, and therefore, our earnings forecasts and dividends for the current fiscal year are undecided. We in the whole group remain committed to improve business performance and profitability.

I would like to once again thank our shareholders for their support and patronage and ask for their continued support in the future.

Yoshihiro Ise
Representative Director and President,
Executive Officer
Fujita Kanko Inc.

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