Good morning. I'm Manabu Takaku, Managing Director of Kyoritsu Maintenance. Thank you very much for gathering for our earnings briefing for the first half of the fiscal year ending in March 2024, despite your busy schedule. This is our first attempt to present the briefing live online as part of our efforts to improve better investor relations. We will do all we can to make it a success. I welcome our audience from North America, Hong Kong, and Singapore, especially those of you in North America who are participating late in the evening. We are seeing a lot more foreign tourists in Tokyo compared with six months ago. In Akihabara, where we are based, there seem to be more foreign nationals than Japanese, partly attracted by Japanese anime.
We do have some issues with inbound travelers to Japan, such as the exchange rate impact, so-called over-tourism, and flights serving regional cities. But I believe the market for inbound travelers will grow further in the light of our rich tourism resources and the government policies. Against this backdrop, we are reporting to you the results of the first half of this fiscal year and upgraded full year forecast for the year. We felt we are beginning to capture needs of domestic and inbound travelers during this period. First, I'll give you an overview of the financial results for the first half of the fiscal year ending in March 2024. After that, President Nakamura will explain the full year forecast for this fiscal year. Let me start with the results of the first half of this fiscal year.
First, let me give you some financial highlights for the year, for the first half. In the first half of this fiscal year, economic activity is normalized with a reclassification of COVID-19 to Category Five of the infectious diseases. Meanwhile, soaring resources and energy prices and raw material costs due to the prolonged conflict in Ukraine and price hikes because the yen remains weak for so long, the outlook remained uncertain. Under the circumstances, high occupancy rate in the dormitory business and the strong recovery of the hotel business helped the company's business performance almost recover to pre-pandemic levels. In the dormitory business, a sharp increase in the Japanese and international students recently pushed up the initial occupancy rate, resulting in a rise in revenue and profit. The occupancy rate has stayed high so far this year.
Next, in hotel business, many customers stayed at our hotels, thanks to rapid recovery of domestic and inbound travelers, and we were able to optimize all our prices in response to cost inflation and saw a high level of occupancy rate and ADR. Both revenue and profit jumped. To secure the right human resources, we have improved our training program, reviewed our working hours system, and improved our working conditions, including base pay raise, in order to enhance employee satisfaction. We also carried out a large-scale renewal project to boost customer satisfaction. Next, I will give you an overview of our consolidated financial results and the main financial indicators for the first half. Net sales increased 18.7% year-on-year to JPY 98.6 billion. Operating income was JPY 8.3 billion, up 112.8% year-on-year.
Net income increased 105.2% year-on-year to JPY 4.7 billion, partly due to the posting of an extraordinary loss of JPY 768 million, following the decision in the Q2 to close serviced apartment complex in Thailand. The figures on the right show a year-on-year comparison on a real basis after one-off items shown in column B, C, D were excluded. Column B shows a year-on-year cost comparison with regard to large-scale renewal we carried out to maintain and improve customer satisfaction. Column C shows year-on-year comparison, cost comparison at nine facilities we leased at the request of municipal government for people with COVID. Column D shows a year-on-year sales and cost comparison for the facilities opened in and after April.
In consideration of the three one-off factors, net sales were actually up JPY 10.1 billion year-on-year, and operating income was up by JPY 4.9 billion. Next, I will compare operating income against the plan and the reasons for the deviation from the plan. First, in the dormitory business, we saw strong monthly contracts of residential facilities that the company can use for training and internship programs or at the start of construction projects. Slower than expected rise in utility costs also helped sales to exceed the plan. In the hotel business, the business environment improved a faster than expected pace.
Proactive sales promotion also contributed to attract a large number of guests, and we also adjusted prices in response to cost inflation, which resulted in a performance that far exceeded the plan. In order to accelerate the recovery of business environment, we opened Dormy Inn Aomori on September 15th, and La Vista Kannonzaki Terrace on September 30th, both ahead of schedule. In other businesses, the comprehensive building management business and public-private partnership business, or PKP, drove its performance to top the plan. In the senior life business, our priority growth business, we opened the Dormy Mejirodai, a residential facility for senior citizens in the popular residential Mejirodai district in Bunkyo Ward, Tokyo, on September 1st . It is one of our largest facilities with elderly, with 176 rooms. As a result, operating profit grew by 2.6% year-on-year.
The next slide shows the net sales and operating income by business segment compared against the pre-pandemic year of 2019. As you can see, the dormitory business and the hotel business led the recovery. Recovery of the Dormy Inn business was particularly fast. Its sales were JPY 12 billion, or 52% higher than the pre-pandemic levels, and its operating cost was JPY 3 billion, or 80% higher than the pre-pandemic levels. They were, of course, far better than the previous year. I will now turn to the individual segments. Firstly, in the dormitory business, occupancy at the start of the year was 98.2%, up 4.7 percentage point from the previous year.
Net sales increased to 5.1% from the previous fiscal year to JPY 26.18 billion, due to an improvement in the occupancy rate at the beginning of fiscal year, favorable monthly lease for the employee dormitories during the year, and an increase of 1,037 rooms in 12 buildings opened during the fiscal year. Operating income increased 32.4% year-on-year to JPY 2.96 billion, due to the positive effect of increased revenues, which absorbs cost inflation in food and personal expenses. This slide shows the initial occupancy rate and the number of leased rooms, which are KPIs for the dormitory business.
The number of leased rooms at the beginning of the fiscal year ending March 31, 2024, was 43,254 rooms, an increase of 2,639 rooms from the previous fiscal year, and the initial occupancy rate was 98.2%. The number of rooms for the Japanese students increased significantly for the second consecutive year to 22,295, up 1,199 rooms year-on-year, in part because students and their parents continue to value the safety and security of our students' dormitories.
The number of rooms for international students also continued to increase due to the gradual easing of immigration restrictions since last May, and as of April this year, the number of rooms stood at 3,581, up 1,604 rooms from the previous year. As of November 20, we have received a report that new applications from Japanese students for April 2024 are also progressing steadily. Now, I would like to go to the Dormy Inn business. This year, the business environment improved with the extension of the nationwide tourism support program and a strong recovery in inbound demand, with the Golden Week holidays and summer seasons contribute to the improvement.
Our hotel's distinctive features, such as large hot spring bath and authentic sauna, as well as our special breakfast featuring local menus and Yonaki Soba, the complimentary noodle bowl, were highly appreciated by many guests. As a result, RevPAR at existing properties increased by JPY 2,580 year-on-year to JPY 6.98 billion, and a profit base also increased by JPY 4.29 billion. In addition, Dormy Inn Aomori, which has a natural hot spring, Awayuki no Yu , opened early to accommodate guests during the Nebuta Festival. Dormy Inn Aomori's local breakfast is mettara bowl, a bowl of rice topped with as many ingredients as you like, as you like, including scallops from Mutsu Bay and yam yam from Aomori Prefecture. The word mettara is said to be a dialect word, meaning delicious in the Tsugaru dialect.
Of course, Yonaki Soba complimentary noodle bowls are available, so please visit Dormy Inn Aomori. At the end of May, all contracts for some of the facilities provided as COVID accommodations and treatment facilities at the request of national and local governments were terminated and normal business operation resumed. As a result, the Dormy Inn business as a whole reported net sales of JPY 35.36 billion, up 30% year-on-year, and operating income of JPY 6.93 billion, which is also an improvement of 67.8% year-on-year. Nextly, I would like to talk about the KPI, the monthly breakdown of occupancy rate and unit room rate.
In the Q2, the occupancy rate was down 7.1 percentage points year-on-year, but the unit room rate increased significantly by 3,249 JPY, compared with the Q2 of a pre-COVID year ended March 31, 2022. In response to cost inflation, such as labor and raw material costs, the company has been working to optimize selling prices. As of November 18, the occupancy rate was 91.5%, and the unit room rate was 14,860 JPY, showing the very favorable trend during the fall season, holiday season. This slide shows the monthly RevPAR, which is calculated by multiplying the occupancy rate by the average room rate.
As explained on the previous page, occupancy rates have declined compared to pre-COVID, but as you can see, RevPAR has exceeded both pre-COVID levels and also compared to the same period last year, thanks to the promotion of selling price optimization. Nextly, I'd like to talk about the resort business. The resort business also showed the same recovery trend as the Dormy Inn business. In the existing resort facilities, sales increased by JPY 2.32 billion, and operating income improved by JPY 1.21 billion, mainly due to the large increase in RevPAR of 4,207 yen compared with the previous period.
In addition, 5 buildings opened in the previous fiscal year, including La Vista Tokyo Bay, with 1,027 rooms, experienced daily increases in both occupancy and room rates as they moved toward full operation, resulting in increased revenue of JPY 3.67 billion and improvement of operating income of JPY 710 million. As you can see, on the cover of this report, we opened La Vista Kannonzaki Terrace in Kannonzaki, Yokosuka, Japan. At this facility, we have introduced glamping, one of our new products and services at our resort. Guests can enjoy a barbecue of local seafood and a bonfire in front of their rooms while overlooking the onsen. We hope you will take advantage of services with family and friends.
As a result, the resort business as a whole posted net sales of JPY 25.21 billion, up 30.8% year-on-year, and operating income, JPY 330 million, up JPY 1.71 billion year-on-year. The next slide shows occupancy rate and, average daily rate by month, which are KPIs for the resort business. In the Q2 of the current fiscal year, the occupancy rate fell 2.1 percentage point from the same period last year, but the unit room rate increased significantly by JPY 4,158, indicating that our efforts to optimize the selling prices are bearing fruit, similar to Dormy Inn.
As of November eighteenth, the occupancy rate was 86.2%, and the unit room rate was JPY 50,703, up from October and showing steady growth.
The slide shows RevPAR for the resorts business. As is the case with Dormy Inn, RevPAR for the resorts business also exceeded the pre-pandemic levels, not to mention the same period of the previous year. Next, I will talk about the balance sheet and net D/E ratio. Net assets at the end of September were JPY 259.6 billion, a decrease of JPY 12.6 billion from the end of the previous period, mainly due to the decrease in cash and deposits resulting from scheduled payment of interest-bearing debt. Net equity ratio was 30.5%, up 3.1 points from the end of the previous fiscal year, mainly due to an increase in retained earnings and a decrease in liabilities. Net interest-bearing debt was JPY 106.8 billion. Net D/E ratio was 1.35.
Financial guidelines we set up before the pandemic call for net D/E ratio of less than 1. We will continue to work for an early business recovery and keep the interest-bearing debt under control. Lastly, I'll talk about dividend. We plan to pay out on a year-end dividend, which will be raised from JPY 60 to JPY 20, an increase of JPY 4. We plan to pay out an annual dividend of JPY 36, or up JPY 14, or 64% from the previous year. The payout ratio is expected to be 20.1%. This concludes my presentation on the result of the first half. I will take it over to President Nakamura for full year forecast. Thank you very much for your kind attention.
My name is Koji Nakamura, President of Kyoritsu Maintenance. Thank you very much for attending today's online briefing. I would like to explain our earnings forecast for the current fiscal year, ending in March 2024. We've revised our full year forecast upward because our income at all levels, including operating income, have made a V-shaped recovery to the pre-pandemic levels and appear to be on track to exceed our initial full year forecast. I would like to focus on two main points.
First, in the dormitory business, the number of contracts with Japanese and international students increased significantly from the previous year. In addition, unlike our anticipation at the beginning of the year, a rise in the energy cost was kept within a certain range. So we determined that we could expect a rise in full year revenue and profit. In the second half, we will work to manage cost increases, including those of energy, labor, and food within our plan. We will also work to win dormitory contracts for the next fiscal year and beyond, and to recover and optimize prices. Second, in the hotel business, in addition to the recovery of domestic business and leisure demand, inbound traveler demand rapidly recovered.
The recovery of RevPAR for the Dormy Inn has been remarkable, driving the entire hotel business performance above the initial forecast and prompting an upward revision.
An assumption for the annual number of foreign visitors to Japan at the end of this fiscal year, in March next year, was raised from 20 million to about 26 million. Based on the revised assumption, we will work to increase ADRs to offset the soaring prices, recover margin, and boost profit levels. Next, I look at the KPIs and the factors behind gains and the losses in sales and profit. In our revised full year forecast, we set the net sales at JPY 200 billion and operating income at JPY 13 billion. Figures on the chart on the right show actual changes in our earning capability after setting aside one-off items in the previous and these fiscal years.
This includes the large-scale renewal facilities for people with COVID and the new openings. These figures exclude cost gains and losses related to those one-off items.
Based on these figures, we have the capability to achieve growth this year of JPY 13.7 billion in net sales and JPY 5.3 billion in operating income. We kept our investment plan for this year unchanged at JPY 20 billion as we aim for sustainable and stable growth. In line with our policy of sustainable and stable shareholder return, we raised an annual dividend by JPY 4 from our initial forecast and JPY 14 from the previous year to JPY 36 per share. Next, I will talk about operating income by main segment for the first half, the second half, and the full year. First, in the dormitory business, operating income for the first half increased by JPY 700 million year-on-year, due to a year-on-year increase in the initial occupancy rate and the number of contracts.
The business in the second half is expected to be in line with our initial plan. Full year operating income in the segment, therefore, is expected to increase by JPY 500 million from our initial forecast and by JPY 1.2 billion year-on-year. In the Dormy Inn business, the recovery of the business environment has been outpacing our initial forecast. We have been capitalizing this improved environment. We expect to raise RevPAR and increase marginal profit in the second half. We've factored in a higher cost associated with investments for renewal to further improve customer satisfaction. As a result, we expect full year operating income to increase by JPY 2.8 billion from the initial forecast and by JPY 2.9 billion year-on-year. In the resort business, we strategically opened La Vista Kannonzaki Terrace in September to capture demand of autumn travel season.
It was originally scheduled to open in November. Its start-up cost was brought forward and recorded in the first half. Other than that, the business is on track. We expect full year operating income to be JPY 400 million higher than our initial forecast, and JPY 3.2 billion higher year-on-year. In other businesses, operating income fell year-on-year, mainly because of the start-up cost of the facilities for elderly people and the provision of bonuses. Full year operating income forecast is JPY 3 billion higher than our initial forecast, and JPY 5.7 billion higher year-on-year. At this pace, we are going to get ahead of our midterm plan by about a year. The rate of the profit increase in the second half may look small because we set the top line based on the most recent RevPAR levels.
We also plan to make proactive investment in renewal projects to boost values. When we see further improvement in business environment or any circumstances that prompt upward revisions, we'll inform you promptly. Next, I will compare net sales and operating income by segment in comparison with previous year and the pre-pandemic year of 2019.
The slide shows information regarding the dormitory and hotel business. The biggest profit drivers were the Dormy Inns, JPY 2.9 billion, and the resort businesses, JPY 3.2 billion in year-on-year recovery. I'll give you details of the contributing factors in a minute. Next, in the comprehensive business management business, we expect an increase in revenue driven by a recovery in the hotel cleaning services and an increase in the large-scale renewal orders. At the same time, we factored in higher costs and settled for a slight decrease in profit. In the food service business, we expect a recovery in the business performance due to a recovery in the operation of the restaurants in our hotels and the restaurant business's recovery.
In the development business, we expect higher profit in the light of an increase in the development of new dormitories and hotels.
This fiscal year, we do not expect income from the liquidation of our assets. Finally, in other businesses, we expect a decrease in the profit in the senior life business because we plan to record costs associated with the opening of two facilities with 240 rooms in total. I will now explain the factors behind the changes in sales and profit for each segment. First, I will discuss the dormitory business. The occupancy rate at the beginning of the period increased 4.7 percentage points to 98.2%, due to a significant increase in the number of lease contracts signed by Japanese and international students.
We will provide our strong safety and security management service, which was highly regarded in the wake of the pandemic, to many more new customers and promote higher customer satisfaction and productivity through the use of DX, including Domico, a special application for dormitory life support. And, at the same time, we also addressed management issues such as responding to rising energy costs and optimizing the prices we offer. As a result, we expect the net sales of the current fiscal year to increase 4.1% year-on-year to JPY 52.41 billion, and operating income to increase 26.3% year-on-year to JPY 5.75 billion due to the effect of the addition of 12 buildings, with 1,037 rooms opened this year, as well as the increase in the sales due to higher initial occupancy rates.
Next, is the Dormy Inn business. In terms of the business environment, the recovery trend, in the market has become even stronger, with expansion and extension of nationwide travel support measures and the recovery of inbound travel are gaining momentum month after month, at a faster pace than originally expected. To reflect this situation in the plan, RevPAR, a sales indicator for existing locations, was set at 477 JPY, higher than the previous year at the beginning of the fiscal year. But the latest upward revision increased it to 1,550 JPY, higher compared to the previous year, resulting in an increase in net sales of JPY 9.36 billion and an increase in operating income of JPY 5.28 billion.
Following the opening of Dormy Inn Aomori in September, we plan to open three new hotels in the second half of the fiscal year: Onyado Nono Beppu, Dormy Inn Express Toyohashi, and Onyado Nono Asakusa Bettei. In total, the four newly opened hotels for the current fiscal year are expected to generate sales of JPY 8.5 billion and, on the other hand, incur JPY 640 million in new opening expenses. And as a main cost increasing factors, variable expenses of JPY 1.5 billion were incurred as we resume normal operations as a function of temporary COVID medical care is no longer necessary, a major renovation expenses of JPY 690 million, and other expenses totaling at JPY 2.78 billion.
As a result, for the Dormy Inn business as a whole, net sales were revised upward from the original forecast of JPY 64.2 billion to JPY 70.02 billion, up 21.4% year-on-year. Operating income was revised up from JPY 7.66 billion to JPY 10.57 billion, up 38% year-on-year. Nextly, I would like to talk about resort business. The resort business, like the Dormy Inn business, is showing a clear recovery trend in the current business environment, and we expect this situation to continue for the foreseeable future.
First, for existing facilities, we have reset RevPAR to JPY 2,745, higher than the previous year, resulting in an increase in sales of JPY 3.65 billion and an increase in operating income of JPY 1.92 billion. The new opening was only La Vista Kannonzaki Terrace in September, and we expect sales of JPY 570 million from this new facility, and JPY 450 million is incurred in new opening related costs. The cost increase includes JPY 420 million for large-scale renovation work to improve customer satisfaction at existing facilities, which, like Dormy Inn, will be absorbed sufficiently by raising the top line, by optimizing selling prices through intensive revenue management.
As a result, for the resort business as a whole, we expect net sales of JPY 52.94 billion, up 22% year-on-year, and operating income of JPY 1.19 billion, a recovery of JPY 3.34 billion from the previous year. Next, this page shows the quarterly trends of Dormy Inn's KPI, namely occupancy, average room rate, and RevPAR, in chronological order from the pre-COVID fiscal year ended March 31, 2019, to the current fiscal year. The top graph shows the KPI trends for the six quarters from the pre-COVID fiscal year ended March 31, 2019, to the current fiscal year. The red box in the table below shows a breakdown of how occupancy, unit rate, and RevPAR were compared to the original forecast for each quarter, which is the basis for the revised forecast.
The revised forecast for the full year is 2.1 percentage point lower than the original forecast for occupancy, while we plan to increase the unit room rate by JPY 1,500. We are shifting our focus from the high occupancy rate to increasing sales through improved customer and employee satisfaction by allowing guests to enjoy our natural hot spring bath and restaurants in a more relaxed atmosphere. I believe that this will definitely improve the satisfaction of the customers and employee. Against the backdrop of rapidly improving business environment, we expect RevPAR to increase 11% to JPY 11,600 from the original forecast of JPY 10,500 by thoroughly implementing this revenue management.
As a whole, we calculate occupancy rate and unit room rate that reflects the outlook for the business environment, including market and competitive trends, and multiply them by RevPAR, which is revenue, and then calculate costs and set profit targets. In the actual business implementation and practice, this is further broken down on a monthly basis for each hotel, and we will use these indicators as benchmarks for flexible and agile performance management. This is the quarterly performance of the resort business KPIs. In the second half of the fiscal year, we expect the KPIs to be roughly in line with our initial forecast as the business environment improves. As with Dormy Inn, we will conduct a thorough revenue management for each property and work to optimize selling prices.
In October and November, all KPIs for occupancy, unit room rate, and RevPAR were above plan, and we believe that inbound tourism to the resort business, which we have set as a key sales measures since the current fiscal year, will gradually have a positive impact and produce favorable results. As with Dormy Inn, we will continue to manage business performance in a flexible and agile manner during this period. Finally, I hope you can take a look at the list of new facilities according to the timing of new dormitory and hotels' openings. The facilities marked with large capital L on the far left indicate development projects based on lease agreements, which is our business model, while the others are capital investments projects based on acquisition of ownership or leasehold rights to land and buildings.
As you can see, by the current fiscal year ending March 31, 2024, the dormitory business will have 12 buildings with 1,037 rooms. The hotel business will have 4 Dormy Inn hotels with 768 rooms, and the resort business will have 1 resort facility with 75 rooms. Preparation for the opening of these facilities in the second half are progressing smoothly. With this upward revision, we will consider how to update the numerical targets of our recently announced midterm plan, and we hope to share this information with investors through a proactive and timely disclosure. As for future plans, we will fulfill our responsibility as a TSE Prime-listed company by providing specific policies and measures as appropriate, including those set forth in the mid-term management plan, new emerging issues, and measures to address them.
We will address the challenges and opportunities related to the acquisition of resources for growth, including a new hotel reservation application system to be launched next spring, hotel branding, as well as the restructuring of development and promotional system, and a system to respond to rising construction costs and finance formation after the introduction of lease accounting standards. We will identify the opportunities, as well as the challenges, and we will definitely try to recover them so that we can meet the expectations of our stakeholders. We are committed to continuously seizing the opportunities. With this conclude our business outlook for the fiscal year ending March 31, 2024. Thank you very much for your attention.