The following is a list of major risks related to our Group’s businesses and other risks that have been judged to pose a possible impact on investors’ decisions. The Group recognizes the potential that these risks may occur, and intends to do its utmost to avoid their occurrence, and to respond to them if they arise.
The items include forward-looking statements, but these are based on judgments made as of the date of the announcement of financial results (December 31, 2024), and risks in business operations, etc., are not limited to these items.

Stock price fluctuations

The Group holds 10.2 billion yen in marketable equity securities, mainly in suppliers and affiliated companies, and is exposed to the risk of stock price fluctuations. Although the value of these assets at the end of the current fiscal year was unrealized gains based on market prices, future trends in stock prices may have an impact on the Group’s performance and financial position.

Inclusion of impairment loss

The Group possesses 49.4 billion yen in tangible fixed assets such as hotel buildings as of the end of the current fiscal year. In the event that the value of real estate declines beyond a certain level or business profitability declines, the Group may incur an impairment loss on a portion of its tangible fixed assets.

Continuing use or mid-term termination of leased property

In the hotel business such as for the Washington Hotel, some hotel real estate is leased on a long-term basis, and if the owner of the real estate goes bankrupt or falls into other insolvency, making continued use of the real estate difficult, our business results may be affected. In the event that the group decides to terminate a long-term lease in the middle of the contract, the Group may be obligated to pay or compensate for a portion of the unearned rent of 65.3 billion yen for the remaining period.

Natural disasters and epidemic outbreaks

In the event of a natural disaster such as a large earthquake, volcanic eruption, typhoon, or extreme weather, or in the event of an epidemic disease such as a new strain of the coronavirus or influenza, the Group’s financial circumstances and business performance may be adversely affected by temporary suspension of business, cancellation of travel, or diminished inbound demand due to restrictions on entry from overseas or voluntary travel restraint.

Loss due to withdrawal from real estate-adjacent business

The Group had been previously active in the real estate subdivision and sales business, and continues to be active in adjacent businesses such as management of infrastructure including roads and water supply, and real estate. If the Group decides to withdraw from these businesses, there is the possibility that it will temporarily incur an according loss.

Accidents such as food poisoning

While we take every precaution to ensure health and safety, in the unlikely event of food poisoning or such incidents, the trust placed by guests may be affected, with the possibility of temporary suspension of operations.

Fluctuation of yen interest rates

Of the 37.4 billion yen in borrowings as of the end of the current fiscal year, 10.2 billion yen is borrowed at variable interest rates, and if a recovery in the domestic economy causes yen interest rates to rise in the future, there is a possibility that the interest burden would be increased.

Fluctuation of exchange rates

The Group’s revenues/expenses and receivables/payables from overseas business operations are denominated in foreign currencies, which may be affected by exchange rate fluctuations when converting the financial statements of overseas consolidated subsidiaries into yen.