In fiscal year 2024, our company recorded net sales of JPY 431.8 billion and operating profit of JPY 29.2 billion. The Leasing Business accounted for about 96% of net sales. Although occupancy rate declined slightly from the previous year, average unit rent increased under our price-focused strategy, with the result that net sales increased to 102% the level of the previous year.

In Japan, where deflation has continued, rents remain at levels lower than the rapidly rising rents of major overseas cities. This has led foreign investors to note a need to raise rents. However, as doing so would unquestionably lower our occupancy rate, we believe that we should avoid simple rent hikes that fail to consider this balance. Against this backdrop, we have adopted a price-focused strategy of setting appropriate prices matched to needs and have further focused on expanding corporate use, for which pricing carries a lower priority than in individual use. The success of this approach can be seen in the increase in our top line.

The provision of housing for foreign human resources was another driving force behind our recovery of profitability. Japan, which faces a declining population and shortages of labor, is forced to rely on foreign workers in its labor force. Despite this, foreigners in Japan often face refusal to rent rooms, thwarting companies' recruitment efforts. Our company, which wields the ability to conclude master lease contracts with apartment building owners and decide on tenants as the lessor, is able to provide rooms to foreign nationals in a form by which we bear all responsibilities, including for delinquent rent. Currently, about 50,000 tenants, representing 11% of the total number of units in use by our company, are foreign nationals. We see considerable room for expansion in this area.

Accordingly, we have entered into cooperative relationships with prefectures including Osaka, Kumamoto, and Kochi to provide housing for foreign human resources. Through the provision of housing, we will continue working to resolve regional issues such as labor shortages and contribute to the realization of a society in which diverse people live together peacefully.

Our Medium-Term Management Plan sets a policy of enhancing profitability and further increasing occupancy rate in the Leasing Business, with a focus on corporate use. We aim to establish a position as the brains behind the company-leased housing strategy, grounded in support for companies' human capital strategies. We aim to increase the share of the corporate use from 64.6% in fiscal year 2024 to 70% in fiscal year 2029.

In individual use, where recovery in tenant numbers is lagging, our policy is to again focus on students. Our properties with furniture and home appliances suit the needs of students as they embark on Single Living. We will work to rebuild the individual use business in conjunction with university student associations and other partners.

While single households will steadily increase, there is excess supply of apartment units and overall vacancies are not expected to decrease. What is demanded in such a situation is quality of service. In addition to our traditional offerings of rooms equipped with furniture, home appliances, and Internet access, we provide new services that increase convenience for tenants, such as smart locks and online contract signing.

With regard to the resumption of the Development Business, we will maintain a number of managed units and lower properties' average age to strengthen profitability. At the core of development will be the rebuilding of apartment buildings that were constructed by their owners 20 to 30 years ago and that have been rented and managed by our company. Rebuilding is an adventure for owners, some of whom naturally consider it unnecessary. However, we propose rebuilding as a solution. Our role is rewarding those owners who have put trust in our company and who have managed their apartment buildings together with us. As the Chief of the Development Business Headquarters, I plan to set up opportunities to explain rebuilding to these owners.

To enhance our medium- to long-term corporate value, our company undertakes management that considers the capital costs and our share prices. To achieve sustainable growth, enhance our corporate value, and meet the expectations of stakeholders, we are transforming our business structure with an emphasis on optimal allocation of management resources and improvement of capital efficiency.

In working to enhance our corporate value, we employ management indicators including ROIC, WACC, and PBR in our management decisions. We recognize our WACC to be about 5.0%. Our business performance entered a stable phase in fiscal year 2023, and our ROIC has since maintained a level far above WACC. In our Medium-Term Management Plans, too, we will continue striving for the maximization of corporate value through efficient and strategic growth investments.

With regard to PBR, we are working to efficiently enhance our corporate value by breaking down PBR into ROE and PER and sorting out the factors that improve each of these. In working to enhance our corporate value, we are advancing measures to raise ROE and PER under the themes of increasing EBITDA, optimizing ownership equity, enhancement of expected growth rate, and reduction in the cost of equity capital.

With regard to shareholder returns, we are aiming for a dividend payout ratio of 30% in the final fiscal year of our Medium-Term Management Plan. Because we implemented a TOB of treasury stock following the announcement of our Medium-Term Management Plan, I believe that reconsideration of this ratio is in order. However, we ultimately aim to achieve a ratio of 30%.

In November 2020, we raised funds through the Fortress Investment Group. We did so via a number of means, including a capital increase through third party allocation of common stocks, borrowing of JPY 30 billion, and issuance of stock acquisition rights. The deadline for the borrowing and the stock acquisition rights is November 2, 2025, requiring that we repay the amount borrowed and exercise the stock acquisition rights by the said date.

With regard to the borrowing, in March 2025 we switched from a secured to an unsecured loan through refinancing with Mizuho Bank, thereby improving the soundness of our financial structure. With regard to the stock acquisition rights, the exercise of the rights by investors within the term is assumed to be nearly certain. This would cause an addition of about 160 million shares, equivalent to about 1.5 times the number of shares outstanding, with the share dilution theoretically triggering a roughly 25% decline in share price.

We are now preparing a transition to a regional branch structure that will let us flexibly respond to region-specific market environments and customer needs. I believe that holding responsibility and authority for a specific area will enable these offices to provide value more closely aligned with customers. To grow our company under the regional branch structure, it is vital that every employee hold an awareness of our "employee-centered" approach and engage in the region's business from a managerial perspective. The challenge for us will be to raise the level of employees' managerial mindset as they undertake trial-and-error-based work that lets them feel how their own actions impact profitability.

Toward that end, we will also focus on our training programs as a component of our human capital management. In addition to our ongoing sales training, we will introduce programs that nurture a managerial perspective and programs related to team building.

We believe that the wellspring of corporate value lies in achieving both economic value and social value. To do so, we are advancing sustainability management that integrates the environment, society, and governance (ESG).