I would like to begin my message with my sincere condolences to the people who suffered the loss of a loved one and have been force to recuperate due to COVID-19.
During this crisis, the SAN HOLDINGS Group used numerous measures to prevent the spread of COVID-19 and ensure the safety of guests and employees in order to provide places where mourners can gather in confidence. We also started several services in response to this crisis. One is a remote funeral participation service that allows mourners to use the internet to view funeral proceedings. Other examples of new services are online seminars that replaced seminars held at funeral halls and online funeral consultations for people who want to avoid face-to-face meetings.
During the fiscal year that ended in March 2021, the number of funerals at the SAN HOLDINGS Group increased 3.4% as the number of funerals was higher at all three group funeral companies. Due to the negative effect of COVID-19 that began in the beginning of the fiscal year, the Group’s average revenue per funeral was 12.8% lower than in the previous fiscal year. As a result, operating revenue decreased 11.3% to 18,865 million yen.
Earnings were lower because the benefits of measures to reduce operating expenses and general and administrative expenses were outweighed by the negative effect of the decrease in operating revenue. Operating profit was down 17.5% to 2,550 million yen, ordinary profit was down 17.2% to 2,536 million yen and profit attributable to owners of parent was down 15.8% to 1,562 million yen.
The forecast for the fiscal year ending in March 2022 includes negative effects of the COVID-19 crisis throughout the fiscal year because predicting the end of this crisis is still impossible. As was announced on May 13, we forecast a 4.7% increase in operating revenue to 19,760 million yen, a 0.8% increase in operating profit to 2,570 million yen, a 0.1% increase in ordinary profit to 2,540 million yen and a 1.7% increase in profit attributable to owners of parent to 1,590 million yen. We will make an announcement promptly if there is a need to revise this forecast.
The fiscal year ending in March 2022 is the final year of the Group’s current medium-term management plan with the primary goal of becoming an organization that provides total support for the final stage of life. During the plan’s last year, we will continue activities for improving productivity and lowering expenses while making substantial strategic investments for growth. Major expenditures include new funeral halls, renovations of existing funeral halls and the recently established subsidiary Life Forward. Due to these activities, we expect up-front expenses during the fiscal year. In addition, we plan to keep our operating margin at the 13% level and increase distributions of earnings to shareholders.
In closing, I want to express my appreciation to shareholders for your support during this challenging time. I am confident that that the actions we are taking now will give our group a sound base for more progress.
May 13, 2021
President and Representative Director