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Consolidated Earnings Forecasts

Outlook for the fiscal year ending March 31, 2021

For the consolidated earnings forecasts for the fiscal year ending March 31, 2021, it was difficult to reasonably estimate the impact of the spread of the novel coronavirus (COVID-19) on the Group’s earnings back in May 26,2020, so we left the consolidated earnings forecasts for the fiscal year ending March 31, 2021 undetermined. Accordingly, we formulated and began working on “Key Business Issues in FY2020” to overcome this difficult situation, assuming that the situation will be prolonged.
Although customers are gradually beginning to use our services again after the lifting of the state of emergency declaration, the pace of recovery has been slowed due to a new wave of infections and the nature of “New Lifestyle,” and we believe that it is possible that this difficult situation will not only continue during this fiscal year, but also next fiscal year onward. The Group aims to overcome the initial impact of COVID-19, and create a pathway for rapid growth in the post-COVID-19 society by taking further actions to effectively address “Key Business Issues in FY2020” and carrying out management reforms. The following forecast figures announced on September 24, 2020 assume that the situation will continue to be difficult with no turnaround, and incorporate figures from the management reforms that can currently be quantified, such as targets to reduce costs and capital investment.

(Consolidated Earnings Forecasts)
Our operating revenue forecast is based on the assumptions that, notwithstanding the resumption of economic activity in line following government guidelines for phased-in relaxation of restrictions after the lifting of the state of emergency declaration on May 25, 2020, there will not be a full-fledged recovery, and the difficult situation in which a “New Lifestyle” spreads, people refrain from going out, and organizers refrain from holding events will continue. Based on calculations using these assumptions, the Company expects that in addition to the impact of COVID-19 for the three months ended June 30, 2020, the number of passengers will likely decrease in Railway operations and Bus operations due to people refraining from going out and the number of users at hotels, leisure facilities, sports facilities, and commercial facilities will decline as a result of people refraining from going out and a continuation of the business formats adjusted to ensure social distancing. As a result, the Company expects full-year operating revenue of ¥332,000 million, which constitutes a sharp decline year on year.
We started postponing and reducing nonessential and non-urgent costs and capital investment, while also working to reduce fixed expenses by reviewing our business formats, such as by reclosing facilities and consolidating operations when deemed appropriate in light of demand trends. In addition, we started reducing the remuneration presently being paid to Directors and utilizing employment adjustment subsidies by having employees take a leave of absence.
Nevertheless, as a result of a sharp fall in revenue, the Company expects for the full year an operating loss of ¥56,000 million, an EBITDA of ¥0 million, ordinary loss of ¥64,000 million, and loss attributable to owners of parent of ¥63,000 million.
The Group is working for an early recovery in earnings by steadily capturing leisure demand generated under the Japanese government’s “Go To Campaign” while thoroughly implementing measures to prevent infection and ensuring the environments provided for customers can be used with safety and security, and by working on providing services and promoting sales using a customer-oriented approach through such measures as targeting the increasing remote work demand.
Please refer to this material  for details.



Forecasts for operating revenues, operating profit, and EBITDA by segment are as follows.

Operating revenue for each segment

billions of yen
      
  March 31,
2021
(forecast)
Y o Y
change
September
30, 2020
(forecast)
Y o Y
change
Urban Transportation
and Regional
122.8 (27.1%) 56.8 (35.3%)
Hotel and Leisure 87.7 (61.4%) 31.1 (74.5%)
Real Estate 54.0 (10.7%) 26.4 (16.8%)
Construction 95.8 (14.3%) 46.2 (7.8%)
Other 23.8 (46.2%) 12.6 (56.6%)
Adjustments (52.1) (26.1)
Consolidated 332.0 (40.1%) 147.0 (50.1%)

Operating profit for each segment

billions of yen
           
  March 31,
2021
(forecast)
Y o Y
change
September
30, 2020
(forecast)
Y o Y
change
Urban Transportation
and Regional
(7.3) (7.6)
Hotel and Leisure (55.2) (35.5)
Real Estate 15.7 (10.0%) 7.0 (30.5%)
Construction 2.6 (53.9%) 1.0 (58.0%)
Other (11.8) (4.6)
Adjustments 0.0 (100.0%) 0.7 (2.3%)
Consolidated (56.0) (39.0)

EBITDA for each segment

billions of yen
          
  March 31,
2021
(forecast)
Y o Y
change
September
30, 2020
(forecast)
Y o Y
change
Urban Transportation
and Regional
15.2 (65.9%) 3.1 (88.3%)
Hotel and Leisure (37.7) (27.6)
Real Estate 27.7 (5.1%) 12.9 (18.9%)
Construction 3.1 (49.1%) 1.2 (53.7%)
Other (7.6) (2.8)
Adjustments (0.7) 0.2 (68.5%)
Consolidated 0.0 (100.0%) (13.0)