Kyoritsu Maintenance Co., Ltd.
(Securities Code: 9616)

Third Quarter of the Fiscal Year Ending March 2019
Consolidated Earnings Results Update
February 2019

Third Quarter of the Fiscal Year Ending March 2019 Consolidated Earnings Announcement
February 8, 2019

Company Name: Kyoritsu Maintenance Co., Ltd.
Tokyo Stock Exchange
Stock Code: 9616, URL: https://www.kyoritsugroup.co.jp/
Director: Takumi Ueda, President
Contact: Koji Nakamura, Director, General Manager of Management Planning Department; Tel: +81-3-5295-7778
Quarterly Earnings Announcement Report Filing Date (Anticipated): February 13, 2019
Dividend Payment Date (Anticipated): ―Quarterly Earnings Presentation Document (Anticipated): Yes
Quarterly Earnings Presentation Meeting (Anticipated): None
(All figures of less than one million yen are rounded down to the nearest digit)
1. Third Quarter of the Fiscal Year Ending March 2019 Consolidated Earnings (April 1, 2018 to December 31, 2018)(1) Consolidated Earnings (Aggregated)(% figures show year-on-year change)
Net Sales

Operating Income

Profit Attributable to Ownersof Parent

Ordinary Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

123,886

13.9

12,04417.9

11,756

17.7

7,973

19.7

3Q FY3/18
108,726
7.5
10,214
5.5
9,985
7.0
6,661
(Note) Comprehensive income: ¥7,780 million (9.2% YoY) in 3Q FY3/19; ¥7,124 million (21.0% YoY) in 3Q FY3/18

13.9

3Q FY3/19

EPS

Fully Diluted EPS
Yen

Yen

3Q FY3/19

204.52

188.483Q FY3/18

171.56

157.47(2) Consolidated Financial Position
Total Assets

Net Assets

Equity Ratio

Book Value Per Share

Millions of yen

Millions of yen%

Yen

189,345

77,97741.2

1,999.88

FY3/18
190,929
71,839(Note) Capital: ¥77,977 million in 3Q FY3/19; ¥71,839 million in FY3/18

37.6

1,842.79

3Q FY3/19

2. Dividend Conditions
Dividend Per Share
1Q-End2Q-EndYen

3Q-EndFY3/18

―

Yen
18.00

FY3/19―20.00

FY3/19 (Projected)(Note) Recent changes in dividend projections: None

4Q-End
Yen

Total

―

Yen
22.00

Yen
40.00

―

23.00

43.00

3. Fiscal Year Ending March 2019 Consolidated Earnings Estimates (April 1, 2018 to March 31, 2019)(% figures show year-on-year change for the full year)
Net Sales

Operating Income

EPS

Millions of yen% (YoY)

Millions of yen% (YoY)

Millions of yen% (YoY)

Yen

Full Year
164,600
8.3
14,300(Note) Recent changes in earnings estimates: None

9.3

13,900

7.5

9,500

8.2

243.68Millions of yen% (YoY)

Profit Attributable to
Owners of Parent

Ordinary Income

Notes(1) Important changes in our subsidiaries, including changes to the scope of our consolidation: None
(2) Application of special accounting procedures in the preparation of our quarterly consolidated financial statements: Applicable(Note) Please refer to “2. Quarterly Consolidated Financial Statements and Important Notes, (3) Quarterly consolidated financial
statement notes (Application of special accounting procedures in the preparation of our quarterly consolidated financial
statements)” on page11 for more details.
(3) Changes in accounting policies, changes in accounting estimates, and restatements:
1. Changes accompanying revisions in accounting standards:
None
2. Other changes:
None
3. Changes in accounting estimates:
None
4. Redisplay of revisions:
None(4) Shares Issued (Common Stocks)
1. Shares issued as of term-end (including treasury shares)
2. Treasury stock as of term-end
3. Average during the term (first six months)

3Q FY3/19
3Q FY3/19
3Q FY3/19

39,218,330
227,274
38,985,028

FY3/18
FY3/183Q FY3/18

39,209,238
225,193
38,832,276* Quarterly financial reports are not subject to review by certified public accountants or auditing firms.
* Notes and explanations regarding the appropriate use of our earnings projections:
Forward-looking statements concerning financial forecasts contained in these materials are based on information available to theCompany when the forecasts were made and certain assumptions judged to be reasonable. However, the Company makes no guaranteethat these forecasts will be achieved. Actual results may differ significantly from the forecasts due to a variety of factors. Moreover,for information regarding earnings estimates and the assumptions upon which they are based, and the usages of these earnings
estimates, please refer to the section, “1. Qualitative Information about Quarterly Earnings, (3) Explanation of future forecasts
including consolidated earnings estimates” on page 6.
(Method for obtaining supplementary explanatory information on financial results)
The Company will post supplementary explanatory information on financial results on its website.

Kyoritsu Maintenance (9616), 3Q FYE March 2019 Earnings Announcement
Index
1. Qualitative Information about Quarterly Earnings(1) Explanation of business performance(2) Explanation of financial position(3) Explanation of future forecasts including consolidated earnings estimates
2. Quarterly Consolidated Financial Statements and Important Notes(1) Quarterly consolidated balance sheet(2) Quarterly consolidated income statement and comprehensive income statement
Quarterly consolidated income statement
Consolidated third quarter
Quarterly consolidated comprehensive income statements
Consolidated third quarter(3) Quarterly consolidated financial statement notes(Notes regarding going concern assumptions)(Significant changes in shareholders’ equity notes)(Application of special accounting procedures in the preparation of
our quarterly consolidated financial statements)(Additional information)(Segment information)

－

4 －

5
5
6
6
7
7
9
9
10
11
11
11
11
12

Kyoritsu Maintenance (9616), 3Q FYE March 2019 Earnings Announcement
1. Qualitative Information about Quarterly Earnings(1) Explanation of business performance
The environment in which the Group operated during the first three quarters of the consolidated fiscal year ending March 31, 2019,was represented by ongoing growth in demand due to increases in the ratio of students going on to higher-level schools and inbounddemand topping 30 million people in 2018. However, the operating environment was also affected by unpredictable natural disasters
from June, including the earthquake in the northern region of Osaka, torrential rain in western Japan, the Hokkaido Eastern Iburi
earthquake, and a series of major typhoons. Under these conditions, the Group worked steadily to make a swift recovery from theimpact of these natural disasters and implement the two core components of the medium-term management plan, namely improving
customer satisfaction and pursuing advanced developments.
As a result, operating results during the first three quarters were characterized by growth in net sales of 13.9% year on year, to¥123,886 million. With regard to profit, we were able to absorb expenses related to preparations for development, etc. of ¥1,320
million, as well as costs of ¥240 million associated with a major program of renewals to improve customer satisfaction and income
from the securitization of real estate, leading to an operating income of ¥12,044 million (up 17.9% year on year), ordinary income of¥11,756 million (up 17.7% year on year), and profit attributable to owners of parent of ¥7,973 million (up 19.7% year on year). The
Group achieved record-high levels of profit.
We provide details of our earnings by business segment as follows:
Dormitory businessIn the dormitory business, initial occupancy rates were 97.7% (down 0.6 percentage points from the previous fiscal year), but this wascaused by the temporary occurrence of empty rooms resulting from the completion of a new dormitory for the exclusive use ofschools. In the first three quarters, the number of contracts in the student dormitory business returned to the previous trend, in addition
to which the corporate dormitory business also saw an increase in the number of contracts as a result of such factors as companies
introducing dormitory systems. In terms of costs, the Company recorded ¥130 million in expenses related to preparations fordevelopment, etc. as a result of opening a new facility, as well as costs of ¥100 million in relation to a major program of renewals forexisting facilities.
As a result, net sales reached ¥35,750 million (up 4.0% year on year) and operating income came to ¥5,171 million (up 0.04% year onyear).
Hotel businessIn the Dormy Inn (business hotel) business, the Company opened the “Natural Springs Nanbu no Yu Dormy Inn Honhachinohe,”“Natural Springs Shiraito no Yu Dormy Inn Oita,” “Natural Springs Naniwa no Yu Dormy Inn Osaka Tanimachi,” “Kasuga no Yu
Dormy Inn Korakuen,” “Dormy Inn global cabin Hamamatsu,” “Natural Springs Tamamo no Yu Dormy Inn Takamatsuchuokoenmae,”“Dormy Inn Global Cabin Yokohama Chukagai,” and “Natural Springs Asagiri no Yu Dormy Inn PREMIUM Namba ANNEX.”
Although the aforementioned natural disasters did have an impact, the number of inbound customers increased significantly, exceeding
the previous year’s levels in all months. In addition, use by many domestic customers made a contribution, and revenue per available
room (RevPAR, calculated as the product of the occupancy rate for each room and the average room price), an important management
indicator, continued to rise.
In the resort hotel business, we opened LA VISTA Kirishima Hills as our first resort in the Kyushu region. We will continue topromote the creation of resorts that will be loved by customers and become a familiar part of their lives. Occupancy rates temporarily
fell below previous-year levels due to natural disasters, and although it took some time to recover, progress in improving customer
satisfaction led to an increase in the daily room price and RevPar in the third quarter of the fiscal year (October-December 2018).
As a result, net sales rose by 12.3% year on year to ¥59,545 million. Despite ¥1,180 million in expenses related to preparations fordevelopment, etc. including the portion arising from new facilities scheduled to be opened in the future and ¥140 million in costs for
major renovations to existing facilities, as well as the impact of natural disasters, operating income rose a steady 11.7% year on year to¥7,496 million.
Contracted services businessIn the contracted services business, net sales rose due to an increase in construction projects, but profit fell due to the expiry of certain
contracts in the building management division. As a result, sales increased 6.0% to ¥10,903 million and operating income fell by
91.6% year on year to ¥18 million.
Food service businessIn the food service business, sales rose due to growth in the number of contracted hotel restaurants managed, but profit fell due to the－

5 －Kyoritsu Maintenance (9616), 3Q FYE March 2019 Earnings Announcement
costs incurred in preparing for the launch of a restaurant business. Consequently, sales increased by 3.0% to ¥5,246 million andoperating income fell by 27.9% year on year to ¥84 million.
Construction businessIn the construction business, net sales fell as a result of the decline in construction projects, but profit increased significantly due toreal estate liquidation. As a result, sales fell by 7.3% to ¥14,005 million and operating income increased by 162.8% year on year to¥1,603 million.
Other business
Our other business segments are the Senior Life business (management of senior citizen housing), the PKP business (consigned
services business provided to regional government bodies), single life support services, insurance agency business, comprehensive
human resource services business, and financing and administrative outsourcing services. The other business segments posted total net
sales of ¥9,296 million, an increase of 5.0% year on year, and incurred an operating loss of ¥57 million, in comparison with anoperating loss of ¥226 million in the same period of the previous fiscal year.
(2) Explanation of financial position(Assets)
Total consolidated assets fell by ¥1,583 million from the end of the previous fiscal year to ¥189,345 million at the end of the third
quarter. The main factor behind this fall was a decrease in cash and deposits, and construction in progress.
(Liabilities)
Total consolidated liabilities fell by ¥7,721 million from the end of the previous fiscal year to ¥111,368 million at the end of the third
quarter, due primarily to a decrease in notes and accounts payable–trade and bonds payable.
(Net assets)
Net assets grew by ¥6,138 million from the end of the previous fiscal year to ¥77,977 million at the end of the third quarter, due
mainly to a rise in retained earnings.
Consequently, equity ratio increased by 3.6 percentage points from the end of the previous fiscal year to 41.2% at the end of the third
quarter.
(3) Explanation of future forecasts including consolidated earnings estimates
Our consolidated earnings estimates for the fiscal year ending March 31, 2019, as provided on November 9, 2018, remain unchanged
at this point in time.

－

6 －Kyoritsu Maintenance (9616), 3Q FYE March 2019 Earnings Announcement
2. Quarterly Consolidated Financial Statements and Important Notes(1) Quarterly consolidated balance sheet(Unit: Millions of yen)
FY3/18(March 31, 2018)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable–trade
Real estate for sale
Costs on uncompleted construction contracts
Real estate for sale in process
Other
Allowance for loan losses
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
LandConstruction in progress
Other, net
Total property, plant and equipment
Intangible assets
Investments and other assets
Investment securities
Guarantee deposits
Lease deposits
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Deferred assets
Total assets－

7 －3Q FY3/19(December 31, 2018)17,298
10,603
217
360
2,652
7,247
(26)
38,353

14,447
8,947
215
302
2,086
6,909
(27)
32,88042,69440,846
16,335
3,087
102,964
4,012

43,86442,912
14,0673,466
104,310
4,060

5,093
16,054
13,516
10,575(203)
45,036
152,013562
190,929

5,057
16,274
14,684
11,781(210)
47,587
155,958506
189,345

Kyoritsu Maintenance (9616), 3Q FYE March 2019 Earnings Announcement(Unit: Millions of yen)
FY3/18(March 31, 2018)
Liabilities
Current liabilities
Notes and accounts payable–trade
Short-term loans payable
Current portion of bonds
Income taxes payable
Provision for bonuses
Provision for directors’ bonuses
Provision for warranties for completed construction
Provision for point card certificates
Other
Total current liabilities
Non-current liabilities
Bonds payable
Convertible bond-type bonds with subscription
rights to shares
Long-term loans payable
Director retirement benefit reserve
Provision for point card certificates
Net defined benefit liability
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets－

8 －3Q FY3/19(December 31, 2018)

7,998
12,915
4,638
2,597
2,071
388
9
3
21,66452,287

5,058
18,134
4,470
1,693
1,459
330
9
3
17,463
48,62332,23029,27020,00019,995

8,662
269
5
1,089
4,544
66,802
119,090

7,346
271
6
1,154
4,701
62,744111,368

7,949
12,80551,270(336)
71,6907,960
12,81657,592(347)
78,021

515
(378)
12
149
71,839190,929

336
(389)
9
(44)
77,977
189,345

Kyoritsu Maintenance (9616), 3Q FYE March 2019 Earnings Announcement(2) Quarterly consolidated income statement and comprehensive income statement(Quarterly consolidated income statement)(Consolidated third quarter)(Unit: Millions of yen)
3Q FY3/18(April 1, 2017 to
December 31, 2017)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Deposit redemption income
Other
Total non-operating income
Non-operating expense
Interest payment
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on sales of investment securities
Other
Total extraordinary income
Extraordinary losses
Provision for loss on disaster
Loss on retirement of non-current assets
Loss on sales of property, plant and equipment
Dismantlement costs
Other
Total extraordinary losses
Income before income taxes
Income taxes
ProfitProfit attributable to owners of parent－

9 －3Q FY3/19(April 1, 2018 to
December 31, 2018)

108,726
83,31725,40815,194
10,214

123,886
94,99628,88916,845
12,044

55
49
74
192
371

53
64
59
73
250

384
216
600
9,985

309
228
537
11,756

196
1
25
224

－
18
－
18

－
－
113
115
2
231
9,978
3,316
6,661
6,661

21
3
－
－
－
25
11,750
3,776
7,973
7,973

Kyoritsu Maintenance (9616), 3Q FYE March 2019 Earnings Announcement(Quarterly consolidated comprehensive income statements)(Consolidated third quarter)(Unit: Millions of yen)
3Q FY3/18(April 1, 2017 to
December 31, 2017)
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total other comprehensive income
Comprehensive income(Details)
Comprehensive income attributable to owners of parent

－

10 －

3Q FY3/19(April 1, 2018 to
December 31, 2018)
6,661

7,973

288
176
(3)
462
7,124

(179)
(11)
(2)
(193)
7,780

7,124

7,780

Kyoritsu Maintenance (9616), 3Q FYE March 2019 Earnings Announcement(3) Quarterly consolidated financial statement notes(Notes regarding going concern assumptions)Not applicable(Significant changes in shareholders’ equity notes)
Not applicable(Application of special accounting procedures in the preparation of our quarterly consolidated financial statements)(Calculation of tax expense)
The Company applies the method that reasonably estimates an effective tax rate to be assessed on income before
income taxes for the year ending March 31, 2019, including the nine months ended December 31, 2018, after accounting
for the tax effects, and multiplies income before income taxes during the nine months ended December 31, 2018 by thisestimated effective tax rate. However, in the event that the estimate for the effective tax rate appears to lack logicalrationale, then the legally determined effective tax rate is employed.
(Additional information)(Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting,” etc.)
The Company has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (ASBJ
Statement No. 28, February 16, 2018) from the beginning of the first quarter of the current fiscal year. Deferred tax
assets are presented in investments and other assets section, and deferred tax liabilities are presented in the non-current
liability section of the balance sheet respectively.

－

11 －

Kyoritsu Maintenance (9616), 3Q FYE March 2019 Earnings Announcement(Segment information)
Segment information
I. Third quarter of the fiscal year ended March 2018 (From April 1 to December 31, 2017)
1. Information pertaining to segment sales, profits and losses(Unit: Millions of yen)
Reporting segments
Dormitories

HotelsContracted
Services

Food
Services

Construction

Subtotal

Other(Note 1)

Total

Adjustments Consolidated(Note 3)(Note 2)

Sales
External sales

34,16052,900

5,665

1,188

6,308

100,224

8,502

108,726－

108,726

Inter-segment
sales andtransfers

217

128

4,623

3,907

8,791

17,669353

18,022(18,022)－

Total

34,37853,02910,2895,095

15,100117,893

8,855

126,749(18,022)

108,726

Segment
profit/loss

5,168

6,714

224

117

610

12,835(226)

12,608(2,394)

10,214(Notes) 1. Other is not considered as a reporting business segment and is comprised of the Senior Life (management of seniorcitizen housing), PKP business (consigned services business provided to regional government bodies), single life
support services, insurance agency business, comprehensive human resources, financing, administrative outsourcing
services, and other related services.
2. Adjustment for segment profit and loss of ¥2,349 million includes ¥430 million for inter-segment transaction
eliminations, and ¥1,963 million in companywide expenses that cannot be allocated to specific reporting segments.
Companywide expenses are primarily those expenses arising from the accounting and management divisions.
3. Segment income (loss) has been adjusted to operating income described in quarterly consolidated statements ofincome.

2. Impairment accounting losses and goodwill amortization of fixed assets by reporting segments
None

－

12 －

Kyoritsu Maintenance (9616), 3Q FYE March 2019 Earnings Announcement
II. Third quarter of the fiscal year ending March 2019 (From April 1 to December 31, 2018)
1. Information pertaining to segment sales, profits and losses(Unit: Millions of yen)
Reporting segments
Dormitories

HotelsContracted
Services

Food
Services

Construction

Subtotal

Other(Note 1)

Total

Adjustments Consolidated(Note 3)(Note 2)

Sales
External sales

35,49959,422

5,492

1,014

13,542

114,971

8,914

123,886－

123,886

Inter-segment
sales andtransfers

250

123

5,410

4,232

463

10,480381

10,862(10,862)－

Total

35,75059,545

10,903

5,246

14,005

125,451

9,296

134,748(10,862)

123,886

Segment
profit/loss

5,171

7,496

18

84

1,603

14,375(57)

14,317(2,272)

12,044(Notes) 1. Other is not considered as a reporting business segment and is comprised of the Senior Life (management of seniorcitizen housing), PKP business (consigned services business provided to regional government bodies), single life
support services, insurance agency business, comprehensive human resources, financing, administrative outsourcing
services, and other related services.
2. Adjustment for segment profit and loss of ¥2,272 million includes ¥57 million for inter-segment transaction
eliminations, and ¥2,330 million in companywide expenses that cannot be allocated to specific reporting segments.
Companywide expenses are primarily those expenses arising from the accounting and management divisions.
3. Segment income (loss) has been adjusted to operating income described in quarterly consolidated statements ofincome.

2. Impairment accounting losses and goodwill amortization of fixed assets by reporting segments
None

－

13 －