First of all, I would like to take this opportunity to thank the Company’s shareholders for their consistent support.
In order to realize sustainable, dynamic growth at the long-term target level, the Seibu Group worked on various measures. The top priorities were to create new business areas and expand existing business fields, and the basic policy was to pursue innovations from a new viewpoint and with speed and establish a growth platform from a long-term perspective as outlined in the Medium-term Management Plan (FY2019–FY2021).
In the midst of these efforts, we opened the DaiyaGate Ikebukuro large-scale office building in April 2019. The Company and two Group companies moved their head offices to improve corporate value by establishing a second major base in addition to Tokorozawa, which will generate greater synergy between Group companies, and to promote work style reform and enhancement of productivity. We also actively implemented Sustainability Actions designed to realize a sustainable society, including establishment of the Seibu Group Environmental Policy, with the aim of contribution to solutions to social issues with an awareness of SDGs.
In regard to operating results for fiscal 2019, ended March 31, 2020, revenue was on the rise up to the third quarter owing primarily to higher revenue per available room (RevPAR)* in the hotel business, increased profitability of the Hawaii business, and improved revenue from railway passenger transport operations. Since late January 2020, however, due to the impact of declining demand in excursion and inbound tourism, as well as voluntary self-quarantining and event cancellations associated with the spread of COVID-19 some leisure facilities had temporarily suspended operations. As a result, operating revenue decreased by \11.3 billion year on year to \554.5 billion (down 2.0%), and operating profit declined by \16.5 billion to \56.8 billion (down 22.5%).
Profit attributable to owners of parent decreased by \40.7 billion to \4.6 billion (down 89.7%) due primarily to recording of an impairment loss.
The Group operates the three primary businesses of the Urban Transportation and Regional Business, the Hotel and Leisure Business, and the Real Estate Business with our management goal being to realize sustainable and dynamic growth. Toward that end, the Company works to raise corporate value and enhance the operational foundations of the Group as a whole. The basic policy is to strengthen our financial position and provide stable, continuous shareholder returns by enhancing our internal reserves.
Moreover, one of the important financial strategies within the Seibu Group's Long-term Strategy is achieving an optimal balance between the return of profits to shareholders and investment in long-term growth.
Accordingly, in the medium to long term, we will invest aggressively in growth while distributing profit by increasing the consolidated dividend payout ratio to 30% in order to further enhance shareholder returns. The year-end ordinary dividend for fiscal 2019 will be \15 per share (for an annual dividend of \30 per share, including the interim dividend of \15) based on our basic policy and financial strategy despite the impact of COVID-19 on our operating results.
As for the fiscal 2020 annual dividend, at this point in time, it is difficult to come up with a reasonable calculation of the impact of COVID-19 on the Group’s operating results, and the consolidated forecast for the next fiscal year is to be determined, so the dividend forecast is also undecided as yet. We will make an announcement on the forecast as soon as it is possible.
Important business matters in fiscal 2020
The spread of COVID-19 has brought about substantial change to the environment surrounding the Seibu Group. For the time being, our focus will be on overcoming the difficulties arising from this situation. We will make every possible effort to ensure business continuity based on the important business matters below. We believe it will be necessary to continue our business based on the assumption that the COVID-19 situation will not come to an end in the short term.
Moreover, we believe the changes in people’s values and behavior brought about by COVID-19 will also have a significant impact on the Group’s business, and are having internal discussions to change the Group’s business model in response. By evolving into a corporate group offering the best and most reliable lifestyle support capable of providing the intangible benefit of lifestyle and time creation on top of our original strengths in the area of tangible benefits that include transportation and provision of goods and spaces, we will achieve growth to maximize corporate value in peri- and post-COVID-19 society.
Looking ahead, we are committed to making further progress in achieving sustainable and strong growth, and will continue carrying out reforms throughout the Group in an effort to maximize corporate and shareholder value. As we pursue these endeavors, we ask for the understanding and support of the Company’s shareholders.
* RevPAR is calculated by dividing total revenue from accommodation charges by the total number of available guest rooms.