Fiscal Year Ending December 2025 Financial Presentation Materials

Overview of Financial Results for Fiscal Year Ending December 2025

For the fiscal year ending December 2025, operating revenue increased 13.9% year-over-year to ¥28,591.57 million driven by improved performance of domestic hotels and revenue contribution from 10 properties acquired in August 2025. Net income attributable to owners of parent rose 16.2% YoY to ¥16,688.99 million. Distribution per unit reached ¥2,186, a record high. The hotel portfolio’s valuation at the end of the period rose 2.7% compared to the previous term to ¥796.35 billion, expanding the hotel portfolio to ¥646.5 billion. Approximately 60% of borrowings are secured at fixed interest rates to mitigate interest rate hike risks.

Earnings Guidance and Market Environment for the Six Months Ending June 2026 and Fiscal Year Ending December 2026

For the six months ending June 2026, operating revenue is forecasted to increase 5.9% YoY to ¥26,581 million, and operating income is expected to rise 1.6% to ¥17,212 million. However, net income attributable to owners of parent is projected to slightly decline by 0.1% YoY to ¥14,354 million due to higher interest expenses. For the fiscal year ending December 2026, operating revenue is forecasted to grow 1.7% YoY to ¥29,077 million, with operating income increasing 0.9% to ¥19,476 million, and net income expected to slightly decrease by 1.9% to ¥16,369 million. While the impact of deteriorating Japan-China relations is not factored into earnings forecasts, the corporation plans to utilize retained earnings to stabilize distributions. Domestic and international lodging demand remains solid, with expectations for inbound demand recovery and growth in regional resort hotels.