Summary of Business Results

Net sales increased 2.1% year on year to 68,388 million yen, due to the strong performance of the Medical, the Elderly Care and the Children Business.

Operating profit increased 46.5% year on year to 3,678 million yen due to the increase in profit due to higher sales, improved profitability resulting from the restructuring of the Smart Hospital Business and the reduction of selling, general and administrative expenses due to increased efficiency.

EBITDA increased 26.0% year on year to 5,218 million yen.

Ordinary profit increased 39.1% year on year to 3,455 million yen.

Profit attributable to owners of parent for the period amounted to 1,935 million yen. It decreased 50.2% from the same period of the previous year due to the effect of a gain on negative goodwill of 2,828 million yen recorded in the same period of the previous year following the acquisition of subsidiaries Solasto Care Corporation (former name: Mitsui Sumitomo Insurance Care Net Co., Ltd.) and Solasto Care Network Corporation (former name: Sogo Care Network Co., Ltd.) in June 2023.

Net sales decreased by 0.2% year on year to 35,444 million yen, almost the same as the interim consolidated accounting period of the previous year, due to the contributions of new orders for contracted services received during the previous fiscal year and the effect of price revisions, despite a decrease of approximately 1,130 million yen in sales due to the end of COVID-19 related services.
Operating profit increased by 12.3% year on year to 2,373 million yen, due to the increase in income from the increase in sales of contracted service, the absence of the higher-than-expected new start-up costs recorded in the previous year, and the decrease in selling, general and administrative expenses due to the improvement in productivity from the transition of next-generation operations that was carried out in the previous year exceeded the negative impact of the decrease in income from COVID-19 related services.

Net sales increased by 4.9% year on year to 27,782 million yen due to the continued recovery following the COVID-19 pandemic, as well as the contributions of a total of four companies that became subsidiaries in FY2023, including Possible Medical Science Corporation and Solasto Care Corporation, and newly opened business centers. Operating profit rose 61.8% year on year to 1,258 million yen, a significant increase due to the increase in sales, efficiency improvements including the consolidation and closing of elderly care centers and the impact of lower depreciation expenses following the recording of impairment losses in the previous fiscal year.

Net sales increased by 3.0% year on year to 5,034 million yen, mainly due to an increase in the number of children attending the Company’s child-care centers. Operating profit increased significantly year on year to 78 million yen, mainly due to an increase in sales and a decrease in recruiting expenses.

Total assets decreased by 4,703 million yen from the end of FY2023. The main reasons for this were a decrease in cash and deposits due to the repayment of short-term and long-term loans payable and a decrease in investments and other assets due to the cancellation of a lump-sum payment protection trust for fee-based nursing care centers, etc.

Total liabilities decreased by 5,747 million yen from the end of FY2023. The main reason for the decrease were decreases in short-term loans payable and long-term loans payable, as well as a decrease in accrued social insurance premiums and deposits received, which were carried over to FY2024 due to the fact that the end of FY2023 was a bank holiday.

Net assets increased by 1,044 million yen from the end of FY2023. This was attributable to profit attributable to owners of the parent for the interim consolidated accounting period of 1,935 million yen, despite the payment of 922 million yen in cash dividends paid.

Net cash provided by operating activities amounted to 381 million yen as a result of the adjustment of income before income taxes and minority interests of 3,455 million yen for the recording of non-cash items such as amortization of goodwill, a decrease in accrued and deposited social insurance premiums, which were carried over to FY2024 because the payment date fell on a bank holiday, and income taxes paid. In the same period of the previous year, net cash provided by operating activities was 4,123 million yen.

Net cash provided by investing activities was 720 million yen, mainly due to the receipt of income from the cancellation of the lump-sum payment protection trust for nursing homes (switching to financial institution guarantees). In the same period of the previous year, there was an expenditure of 2,394 million yen.

Net cash used in financing activities was 3,912 million yen, due to factors such as the difference between new borrowings and repayment of borrowings, which resulted in an expenditure of 2,891 million yen, as well as dividend payments. In the same period of the previous year, net cash used in financing activities was 252 million yen.

As a result, the year-end balance of cash and cash equivalents decreased by 2,810 million yen from the end of FY2023 to 12,305 million yen.