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I would now like to provide an explanation of the Residential segment.
In the fiscal year ended March 31, 2017, the segment posted a decrease in operating revenue of ¥9.2 billion year on year, to ¥108.5 billion, and an increase in operating profit of ¥2.7 billion year on year, to ¥9.7 billion.
The decrease in revenues was caused by the bulk sale of land in the previous fiscal year, but it was offset by the improved gross margins of condominiums and resulted in an increase in profit.
With regard to the outlook for the fiscal year ending March 31, 2018, we are planning to increase operating revenue by ¥12.9 billion year on year, to ¥121.5 billion, while operating profit is expected to decrease by ¥1.9 billion year on year, to ¥7.8 billion.
From this fiscal year, sales of rental residence properties for investors are to be recorded in the Residential segment, which results in increased gains on sales of rental residence properties for investors. In addition, we are planning an increase in the number of unit sales of condominiums and an increase in revenues.
Operating profit is expected to decrease, with lower average selling prices and decreased gross margins associated with the high-end properties recorded in the previous fiscal year for condominiums.
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