Japan Hospice Holdings Inc.

Business Details

The Group, together with its consolidated subsidiary Family Hospice Co., Ltd., operates the home hospice business as a single segment targeting terminal cancer patients and patients with intractable diseases. The main sources of revenue are the Provision of Hospice Housing and Visiting Nursing & Home Hospice Services such as home nursing and care, generating revenue through a combination of medical insurance income, long-term care insurance income, and rental income. A key feature is that a hospice team centered on nurses provides terminal care on a 24-hour, 365-day basis.

Recent Overview

Q1 net sales up 18%, operating profit up 277%, both significantly higher; full-year forecast unchanged

In Q1 of FY2026 (ending December 2026) (January to March 2026), net sales were ¥3,817 million (up 18.0% year on year) and operating profit was ¥264 million (up 277.4% year on year), representing substantial growth in both revenue and profit. Although costs increased due to the operating deficit burden from facilities opened in the previous Q4 and increased staffing associated with strengthening the organizational structure, improved occupancy rates resulting from strengthening the sales division proved effective. The per-user sales unit price declined due to external environmental factors. Preparations for the 7 facilities (254 rooms) scheduled to open from April 2026 onward progressed during Q1. There is no change to the full-year earnings forecast (net sales of ¥16,500 million, operating profit of ¥1,500 million), and the annual dividend forecast of ¥25 remains unchanged.

Key Products

Growth Drivers

• Increase in the number of deaths due to progressing aging of the population (exceeding 1.6 million per year in 2024, projected to continue increasing through 2040) and expanding demand for terminal care
• Healthcare system reforms and promotion of the community-based integrated care system encouraging a shift from hospital to home-based medical care
• Expansion of available rooms through continuous opening of new facilities (7 facilities with 254 rooms planned to open from April 2026 onward)
• Improved occupancy rates and strengthened sales capabilities through enhancement of the area system, unit system, and head office support structure
• Expansion of the hospice business through various projects promoted jointly with Sugi Holdings

Risks

• Risk of decline in per-user medical insurance billing unit price due to medical fee schedule revisions, and temporary deterioration in the balance between net sales and labor costs (unit price decline continued even in Q1)
• Constraints on business expansion and rising labor costs due to difficulty in recruiting nurses and care workers and insufficient staffing
• Temporary decline in profitability due to upfront costs (labor costs, etc.) during the startup period of new facilities
• High level of reliance on interest-bearing debt (including lease obligations) and high financial leverage, with an equity ratio of 19.2% (lease obligations under fixed liabilities stood at ¥8,644 million at the end of Q1)
• Rising ratio of labor costs to net sales due to the declining trend in per-user sales unit price