About OKURA HOLDINGS Company

We are a Japanese pachinko and Japanese slot machine game hall operator. Currently, we use the trade name “Big Apple” in Kyushu, Kanto, Kansai, and the Chinese regions of Japan. , “K's Plaza” and “SENKURA” operate 10 Japanese-style pachinko game halls. As revealed in our previous interim reports and annual reports, the Japanese government has gradually relaxed a number of COVID-19 restrictions to resume and stimulate social and economic activities in Japan. It can be seen that the policy has changed from “the need to curb the spread of COVID-19” to “coexistence with the virus.” On May 8, 2023, the Japanese government lowered the legal status level of COVID-19 from the second-highest category in line with diseases such as tuberculosis and severe acute respiratory syndrome (SARS) to the fifth category in the same category as seasonal influenza. Notwithstanding this, the Group has continued to implement infection prevention measures in its business operations, such as encouraging all employees of the Group to wear masks at all times, and to disinfect Japanese pachinko machines and Japanese slot machines from time to time to control the spread of COVID-19 and other diseases in the Group's Japanese pachinko and Japanese slot machine game arcades, and to provide a safe work/Japanese pachinko and Japanese slot machine game room environment for its employees and customers. Although recent global instability has had a negative impact on consumer spending on entertainment activities, the Group has observed that the number of customers at most of its Japanese pachinko and Japanese slot machine game arcades rebounded in the 2024 fiscal year as Japan eased several COVID-19 restrictions as described above. In particular, customer flow in urban areas experienced a slow but steady recovery and improved markedly during the year. Furthermore, (i) the launch of an updated Japanese slot machine (“6.5 model Japanese slot machine”) in June 2022, (ii) the launch of a new Japanese slot machine (“smart slot machine”) in November 2022, and (iii) the launch of a new Japanese pinball machine (“smart pachinko machine”) in April 2023, also helped restore the customer flow of the Group's Japanese pachinko machine and Japanese slot machine game arcade. In particular, smart slots are becoming increasingly popular and attracting more customers, and the revenue for FY2024 improved slightly compared to FY2023. Furthermore, the Group recorded profit before income tax in the 2024 fiscal year, which decreased by about 1242 million yen, or about 39.5%, from about 3146 million yen in fiscal year 2023 to about 1904 million yen. This decrease is mainly due to a decrease in income from cancellation of leasing liabilities from about 2,691 million yen in fiscal year 2023 to about 1,659 million yen, or about 61.7%, to about 1,032 million yen in fiscal year 2024, as further explained below. The Group will continue to explore new measures and opportunities to enhance the Group's operating performance and diversify revenue sources. Furthermore, in December 2023, management decided to close one of the Group's Japanese pachinko and slot machine game arcades from January 14, 2024, namely K's Plaza Ohato (“K's Plaza Ohato”) located at 10-5 Motofuna-cho, Nagasaki-shi, Nagasaki-ken, Japan. Management believes that closing down the Japanese pachinko and Japanese slot machine game arcades mentioned above is beneficial to the Group because the Group can concentrate resources on another Japanese pachinko and Japanese slot machine game hall Senkuradejima (formerly known as Bigapple.dejima) next to K'sLazaohato, and other more promising Japanese pachinko and Japanese slot machine game arcades to enhance the customer experience in the game parlors, and close down the underperforming Japanese pachinko and Japanese slot machine game arcades to reduce further business operation losses. For further details, please refer to our announcement dated January 9, 2024.