Unidentified Analyst: I am Otsuka from [indiscernible] Securities. I hope you can hear my voice okay.
Hitomaro Yano: Yes.
Unidentified Analyst: Thank you. So I’m referring to the data book numbers, what has been explained by Yano, just now, so your clarification or confirmation. Just as usual, you have the procurement cost and also the asset yield return on assets and also the foreign currency and if you were to calculate the spread. So I think it is 5% for the first quarter that just ended, and it was 6% in the last first quarter, in the last year that is. And so therefore, that is kind of downsizing the spread as a result of the foreign currency impact. So on Page 18, the reason why the euro procurement, the funding cost, in fact, is resulting in such numbers or because you are treating those phenomena, so therefore, the spread may not have downsized from here down the road, it may perhaps trend flat. So if you could be so kind enough to explain that. Thank you.
Hitomaro Yano: Yes, your, I think, assumption is exactly the same as mine. And to begin with, so talking about the asset side, and that is financial asset only and on the liability side, other than the financial liability, there are some equity investments as well that is included. But talking about the financial assets, so the assets and liability matches. And this is why, just as I explained earlier, euro, rather, OCE — our OCE business and some part of Elawan that is, the investment that we have been making, the procurement cost, I mean the funding cost, in fact, has been pushed up. But as for euro, so because of the interest rate fluctuation, we think — well, we have the position not to be susceptible to the changes of the interest rate. So we’re working on the ALM so that we will not be largely impacted by the changes. I hope this answers your question.
Unidentified Analyst: Yes, thank you very much.
Operator: Mitsubishi, UFJ Morgan Stanley. Tsujino, please proceed.
NatsumuTsujino Mitsubishi: You mentioned about the impact of reopening eastern access and also real estate. I think this is the operation or management only, so daily contribution and also investment gains, I subtract exact from the information that I received. And what kind of improvements do you think you will see in each of these items? In terms of concessions, JPY450 million in red. And then JPY8.9 billion in red, and then just under JPY2 billion in red in these three quarters, and there was an improvement from January through March, but the improvement was not that impressive. So going forward, what do you think will happen? April through June, was there any special high cost? Was it a special item and maybe the actual improvement was much better than this?
If that is the case, please talk about that? And also, if you look at the real estate operations only, there are activities and it was JPY1.2 billion from October to December. And then it went to deficit, and then JPY1.4 billion in April, June. So in the past, if you just looked at the operation, it was about JPY3 billion. So what do you think you need to do in order to go back to that level? Do you expect that level of recovery before the end of the fiscal year? That’s my question.
Hitomaro Yano: Thank you. In terms of concession, it is a related affiliated company. I don’t know to what extent I can comment. But January through March for them, every year sees cost for repair, which means that fixed cost tends to be posted in a high amount in January through March, and that’s basically April through June this year, which means that there is a big recovery. So the April through June, and our July through September should see more growth. That’s what we expect. And for concessions, we have seen a good recovery, so we do have high expectations. Having said that, hotels and inns, well, we have a very good feel for this segment. As of today, I would say the situation is actually better than pre-COVID. Hotels and Inns operations have seasonality, usually better in spring and autumn and worse in winter.
If we look for the pandemic, we were actually running deficits in winter season. So if you exclude the seasonality, if you take that out, you can see that we have seen steady recovery quarter-by-quarter. And again, we have high expectations for this segment as well.
NatsumuTsujino Mitsubishi: Hotels and Inns and concessions on their own, how much increase in profit can we see? That might be another question. But for these two, we expect a big growth. Mr. Muraki asked a similar question earlier, I think base profit, what will happen to base profit going forward?
Hitomaro Yano: Well, since we have these expectations in these areas, we believe that a certain amount of growth is definitely possible and for aircraft as well. So we [indiscernible] and this is also cycling, and we can sell aircraft which will push up the profit. So for these three particular segments, we expect a further growth in profit. In terms of recovery from the pandemic, in terms of corporate financial services, rental car is showing a very good recovery as well. And that’s one other piece of contributions that we see.
NatsumuTsujino Mitsubishi: That’s all from me. Occupancy-wise, I understand that it’s a pre-COVID level. But maybe because of inflation, profit will not recover to JPY3 billion to JPY4 billion on a quarterly level yet. Is that true or not?
Hitomaro Yano: In terms of occupancy, because of labor shortage, occupancy itself is actually quite difficult to raise. But in hotels and Inns, we have increased unit price. And as a result, what we call RevPAR, as you can see on Page 6 of the handout. Compared to 2019, we have seen some increase, so we can expect some positive results here. Thank you.
