Interim report
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Translation Notice: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. Non-Consolidated Financial Results for the Six Months Ended September 30, 2025 (Based on Japanese GAAP) November 14, 2025 Company name: SUNWELS Co.,Ltd. Stock exchange listing: Tokyo Stock code: 9229 URL https://sunwels.jp Representative: President and Representative Director Ryotatsu Nawashiro Inquiries: Director and General Manager of Corporate Division Eiichi Ueno TEL 076(272)8982 Scheduled date to file Semi-annual Securities Report: November 14, 2025 Scheduled date to commence dividend payments: – Preparation of supplementary material on financial results: Yes Holding of financial results meeting: Yes (for institutional investors and analysts) (Amounts less than one million yen are rounded down) 1. Non-consolidated financial results for the six months ended September 30, 2025 (from April 1, 2025 to September 30, 2025) (1) Non-consolidated operating results (cumulative) Percentages indicate year-on-year changes Net sales Operating profit Ordinary profit Profit Millions of yen % Millions of yen % Millions of yen % Millions of yen % Six months ended September 30, 2025 13,407 2.4 (993) – (1,441) – (1,517) – Six months ended September 30, 2024 13,087 42.4 1,237 36.5 867 30.0 242 (27.7) Earnings per share Diluted earnings per share Yen Yen Six months ended September 30, 2025 (46.77) – Six months ended September 30, 2024 7.77 7.76 Reference: EBITDA (operating profit + depreciation + share-based payment expenses) For the six months ended September 30, 2025: ¥(110) million [– %] For the six months ended September 30, 2024: ¥1,853 million [45.7%] Note: Information on diluted earnings per share for the six months ended September 30, 2025 is not presented because, although there are potential shares, a net loss per share was reported. (2) Non-consolidated financial position Total assets Net assets Equity ratio Millions of yen Millions of yen % As of September 30, 2025 45,567 7,105 15.5 As of March 31, 2025 38,994 8,616 22.0 Reference: Equity As of September 30, 2025: ¥7,072 million As of March 31, 2025: ¥8,589 million 2. Cash dividends Annual dividends per share 1st quarter-end 2nd quarter-end 3rd quarter-end Fiscal year-end Total Yen Yen Yen Yen Yen Year ended March 31, 2025 – 0.00 – 0.00 0.00 Year ending March 31, 2026 – 0.00 Year ending March 31, 2026 (Forecast) – 0.00 0.00 Note: Revisions to the forecast of cash dividends most recently announced: No
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3. Forecast of non-consolidated financial results for the year ending March 31, 2026 (from April 1, 2025 to March 31, 2026) Percentages indicate year-on-year changes Net sales Operating profit Ordinary profit Profit Earnings per share Millions of yen % Millions of yen % Millions of yen % Millions of yen % Yen Full year 28,844 8.9 (1,039) – (2,072) – (2,281) – (70.35) Reference: EBITDA For the full fiscal year ending March 31, 2026 ¥893 million [(64.5)%] Note: Revisions to the earnings forecast most recently announced: Yes Regarding revisions to the financial results forecasts, please refer to the “Notice Concerning Revisions to Full-Year Financial Results Forecasts” announced today (November 14, 2025). 4. Notes (1) Application of special accounting methods for preparing semi-annual non-consolidated financial statements: Yes Note: For details, please refer to “2. Semi-annual non-consolidated financial statements and related notes, (4) Notes to the semi-annual non-consolidated financial statements, (Notes regarding special accounting methods for preparing semi-annual non-consolidated financial statements)” on page 11 (attached materials). (2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements Changes in accounting policies due to revisions to accounting standards and other regulations: No Changes in accounting policies due to other reasons: No Changes in accounting estimates: No Restatement of prior period financial statements: No (3) Number of issued shares (common shares) Total number of issued shares at the end of the period (including treasury shares) As of September 30, 2025 35,220,000 shares As of March 31, 2025 35,220,000 shares Number of treasury shares at the end of the period As of September 30, 2025 2,787,492 shares As of March 31, 2025 2,787,492 shares Average number of shares during the period (cumulative from the beginning of the fiscal year) Six months ended September 30, 2025 32,432,508 shares Six months ended September 30, 2024 31,155,719 shares * Semi-annual financial results reports are exempt from review conducted by certified public accountants or an audit corporation. * Proper use of earnings forecasts, and other special matters Notice regarding forward-looking statements Forward-looking statements, including the non-consolidated forecasts stated in these materials, are based on information currently available to the Company and certain assumptions deemed reasonable. Actual results may differ from the non-consolidated forecasts due to various factors. Please refer to “1. Overview of operating results, etc., (3) Explanation of non-consolidated financial forecasts and other forward- looking statements” on page 4 (attached materials) for the assumptions used in forecasting business results and precautions regarding the use of business results forecasts, etc. How to obtain the supplementary briefing materials The supplementary briefing materials are disclosed on TDnet on the same day of the financial results.
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SUNWELS Co.,Ltd. (9229) - 1 - ○ Table of Contents: Attached Materials Index 1. Overview of operating results, etc. ........................................................................................................... 2 (1) Overview of operating results for the period under review ................................................................ 2 (2) Overview of financial position as of the end of the period under review ........................................... 2 (3) Explanation of non-consolidated financial forecasts and other forward-looking statements ............. 4 (4) Significant events regarding going concern assumption .................................................................... 5 2. Semi-annual non-consolidated financial statements and related notes ..................................................... 6 (1) Semi-annual balance sheet ................................................................................................................. 6 (2) Semi-annual statements of income ..................................................................................................... 8 (3) Semi-annual statements of cash flows ................................................................................................ 9 (4) Notes to the semi-annual non-consolidated financial statements ..................................................... 10 (Notes regarding going concern assumption) ................................................................................... 10 (Notes regarding significant changes in the amount of shareholders’ equity) .................................. 10 (Notes regarding special accounting methods for preparing semi-annual non-consolidated financial statements) ......................................................................................................................... 10 (Revenue recognition) ...................................................................................................................... 11 (Significant events after reporting period)........................................................................................ 11
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SUNWELS Co.,Ltd. (9229) - 2 - 1. Overview of operating results, etc. Overview of operating results, etc. (1) Overview of operating results for the period under review During the six months ended September 30, 2025, the Japanese economy exhibited signs of a gradual recovery against the backdrop of improvements in the employment and income environment, as well as strong demand for inbound travel. Uncertainty remains in future outlooks, however, due to factors that include concerns about sluggish personal consumption resulting from continued price increases and economic downturns influenced by U.S. tariff policies. Within our domains of nursing care and medical care, with an eye on the baby boomer generation becoming over 75 years of age, efforts are underway to create a society in which elderly people can continue to live their lives in their own neighborhoods even while requiring nursing care (establishment of a community-based integrated care system). A system in which people can receive appropriate medical and nursing care regardless of where they live is needed, and it is becoming increasingly important to ensure high-quality home healthcare and home nursing care. In addition, the need for specialized hospitals and specialized nursing care is expected to grow due to the specialized nature of designated intractable diseases. Amid this environment, the Company has accelerated the nationwide development of its PD House facilities specializing in Parkinson’s disease. To meet the needs of those suffering from Parkinson’s disease, the Company newly opened the following facilities: PD House Sakurayama (Showa-ku, Nagoya City, Aichi Prefecture) in May 2025, PD House Otsu (Otsu City, Shiga Prefecture) and PD House Okayama Tatsumi (Kita-ku, Okayama City, Okayama Prefecture) in June 2025, PD House Hamamatsu Wago (Chuo-ku, Hamamatsu City, Shizuoka Prefecture) in July 2025, PD House Inage (Inage-ku, Chiba City, Chiba Prefecture), PD House Higashi-Urawa (Midori-ku, Saitama City, Saitama Prefecture), and PD House Shakujii-Koen (Nerima-ku, Tokyo) in August 2025, and PD House Kiyota (Kiyota-ku, Sapporo City, Hokkaido Prefecture) and PD House Chuorinkan (Yamato City, Kanagawa Prefecture) in September 2025. Due to the recording of initial costs incurred from these new openings, profitability has temporarily declined. In addition, as stated in the “Notice on the Formulation of Measures to Prevent Recurrence and Disciplinary Action Against Related Parties” dated February 12, 2025, as a result of the review of the operating structure based on the implementation of measures to prevent recurrence, profitability has temporarily declined significantly. As a result of the above, net sales were 13,407 million yen (up 2.4% year on year), operating loss was 993 million yen (compared with operating profit of 1,237 million yen in the same period of the previous fiscal year), ordinary loss was 1,441 million yen (compared with ordinary profit of 867 million yen in the same period of the previous fiscal year), and loss was 1,517 million yen (compared with profit of 242 million yen in the same period of the previous fiscal year). (2) Overview of financial position as of the end of the period under review i) Analysis of assets, liabilities and net assets (Assets) Total assets at the end of the period under review amounted to 45,567 million yen, up 6,573 million yen from the end of the previous fiscal year. This was mainly due to increases of 6,921 million yen in leased assets and 1,214 million yen in buildings, primarily due to the opening of new facilities, despite a decrease of 1,372 million yen in cash and deposits. (Liabilities) Total liabilities at the end of the period under review amounted to 38,461 million yen, up 8,084 million yen from the end of the previous fiscal year. This was mainly due to an increase of 7,134 million yen in lease liabilities, primarily due to the opening of new facilities, as well as to an increase of 1,337 million yen in payables arising from securitized receivables.
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SUNWELS Co.,Ltd. (9229) - 3 - (Net assets) Net assets at the end of the period under review amounted to 7,105 million yen, down 1,511 million yen from the end of the previous fiscal year. This was mainly due to a decrease of 1,517 million yen in retained earnings from posting of loss. (Reference) Major facilities Major facilities acquired during the six months ended September 30, 2025, are as follows. (Millions of yen) Business office name (Location) Facility description Acquisition type Acquisition cost Total lease amount PD House Otsu (Otsu City, Shiga Prefecture) PD House building Leased facilities 645 1,555 PD House Okayama Tatsumi (Kita-ku, Okayama City, Okayama Prefecture) PD House building Leased facilities 772 1,606 PD House Hamamatsu Wago (Chuo-ku, Hamamatsu City, Shizuoka Prefecture) PD House building Leased facilities 645 1,690 PD House Inage (Inage-ku, Chiba City, Chiba Prefecture) PD House building Self-ownership 838 – PD House Higashi-Urawa (Midori-ku, Saitama City, Saitama Prefecture) PD House building Leased facilities 897 2,168 PD House Shakujii-Koen (Nerima-ku, Tokyo) PD House building Leased facilities 1,240 3,131 PD House Kiyota (Kiyota-ku, Sapporo City, Hokkaido Prefecture) PD House building Self-ownership 606 – PD House Chuorinkan (Yamato City, Kanagawa Prefecture) PD House building Leased facilities 818 1,606 PD House Utsunomiya Hosoyacho (Utsunomiya City, Tochigi Prefecture) PD House building Leased facilities 700 1,606 PD House Gifu (Gifu City, Gifu Prefecture) PD House building Leased facilities 730 1,773 PD House Otori (Nishi-ku, Sakai City, Osaka Prefecture) PD House building Leased facilities 820 2,270 Note: Leased facilities refer to lease assets acquired via finance lease transactions without transfer of ownership. Acquisition cost for leased facilities is listed as an equivalent amount for acquisition cost. ii) Analysis of cash flows Cash and cash equivalents (hereinafter, “cash”) as of the end of the period under review decreased 1,372 million yen from the end of the previous fiscal year to 4,265 million yen.
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SUNWELS Co.,Ltd. (9229) - 4 - Cash flows and factors affecting cash flows for the period under review are as follows: (Cash flows from operating activities) Net cash used in investing activities amounted to 818 million yen. This was mainly attributable to a loss before income taxes of 1,445 million yen, which more than offset depreciation of 875 million yen. (Cash flows from investing activities) Net cash used in investing activities amounted to 1,182 million yen. This was mainly attributable to the purchase of property, plant and equipment of 1,091 million yen in line with the opening of new business offices. (Cash flows from financing activities) Net cash provided by financing activities amounted to 628 million yen. This was mainly attributable to net increase/decrease in payables arising from securitized receivables of 1,337 million yen, which more than offset repayments of long-term borrowings of 519 million yen. (3) Explanation of non-consolidated financial forecasts and other forward-looking statements The forecast of non-consolidated financial results for the year ending March 31, 2026, released on May 15, 2025 in the “Non-Consolidated Financial Results for the Year Ended March 31, 2025 (Based on Japanese GAAP),” has been revised in light of the recent trend in business results. For details, please refer to the “Notice Concerning Revisions to Full-Year Financial Results Forecasts” announced today (November 14, 2025).
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SUNWELS Co.,Ltd. (9229) - 5 - (4) Significant events regarding going concern assumption Following the investigation report received by the Company from the Special Investigation Committee on February 7, 2025, incidents of overly short visits and visits without accompanying staff came to light. Consequently, corrections to our past financial statements related to these events and a review of our operating structure, including the implementation of measures to prevent recurrence, led to a temporary significant decline in profitability. As a result, the Company recorded a loss of 925 million yen in the previous fiscal year and a loss of 1,517 million yen during the six months ended September 30, 2025. In addition, as stated in the “Notice Concerning Revisions to Full-Year Financial Results Forecasts” dated November 14, 2025, regarding the revision of our full-year earnings forecast, we have revised the outlook for our financial results downward during the period under review due to an increase in unexpected resignations at PD House locations and the impact of the restriction of sales and advertising activities over a certain period. These circumstances indicate that the business environment surrounding the Company remains challenging. Of the borrowings at the end of the period under review, the Company was also in breach of the financial covenants attached to the term loan agreement with commitment period concluded on March 14, 2023 (balance of borrowings at the end of the period under review: 357 million yen) and the term loan agreement with commitment period concluded on September 15, 2023 (balance of borrowings at the end of the period under review: 599 million yen). These events or circumstances constitute events or circumstances that may cast significant doubt on the Company’s going concern assumption. However, the Company is implementing specific measures to review its business model from the ground up and establish a stable profit structure. i) Cost Reduction through Optimization of Personnel Allocation As a key measure to prevent recurrence, we have reviewed home visit nursing plans at all facilities. In particular, for cases where nighttime sleep has become a regular occurrence, we have revised the plans and re-established them to ensure that necessary services were provided appropriately to each resident. As a result of the simultaneous review of home visit nursing plans at all facilities, surplus personnel have been identified, leading to a temporary increase in labor costs (labor cost ratio). Therefore, we will transfer personnel to dominant facilities and adjust staffing levels to achieve appropriate staffing at each facility and improve profitability. ii) Contribution to Revenue from the Opening of New Facilities In the fiscal year ending March 31, 2026, we will open 13 new facilities nationwide, including in areas where we have not yet established a presence (Shiga Prefecture, Okayama Prefecture, Shizuoka Prefecture, Tochigi Prefecture, and Gifu Prefecture). The increased initial costs associated with new openings will temporarily worsen profitability in the first year of operation. However, by quickly recovering the investment and establishing a foundation for generating profits, we aim to significantly contribute to profitability in subsequent fiscal years. Moreover, the Company has obtained written confirmation from the financial institutions with which it has concluded the term loan agreements that are in violation of financial covenants that they will not exercise their right to demand early repayment. The Company is working to maintain a consultative relationship with the financial institutions it does business with by sharing information closely, and these financial institutions have expressed their continued support. Regarding the Company’s financial situation, we have entered into a receivables securitization agreement with the aim of improving cash flow and enhancing financial stability, thereby securing the necessary business funds for the time being. Going forward, we will continue considering strengthening our financial foundation promptly through early fundraising as appropriate. Based on the above, the Company believes that there are no material uncertainties regarding the going concern assumption.
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SUNWELS Co.,Ltd. (9229) - 6 - 2. Semi-annual non-consolidated financial statements and related notes (1) Semi-annual balance sheet (Millions of yen) As of March 31, 2025 As of September 30, 2025 Assets Current assets Cash and deposits 5,637 4,265 Accounts receivable - trade 4,068 4,391 Inventories 16 18 Other 245 268 Allowance for doubtful accounts (1) (1) Total current assets 9,967 8,942 Non-current assets Property, plant and equipment Buildings, net 10,044 11,258 Leased assets, net 14,358 21,279 Other, net 3,303 2,678 Total property, plant and equipment 27,706 35,216 Intangible assets 13 13 Investments and other assets Other 1,308 1,396 Allowance for doubtful accounts (1) (1) Total investments and other assets 1,306 1,395 Total non-current assets 29,026 36,624 Total assets 38,994 45,567
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SUNWELS Co.,Ltd. (9229) - 7 - (Millions of yen) As of March 31, 2025 As of September 30, 2025 Liabilities Current liabilities Accounts payable - trade 169 192 Current portion of bonds payable 15 15 Short-term borrowings 660 619 Current portion of long-term borrowings 1,039 1,039 Payables arising from securitized receivables – 1,337 Lease liabilities 273 335 Income taxes payable – 70 Provision for bonuses 1,091 1,138 Other 2,353 2,265 Total current liabilities 5,602 7,012 Non-current liabilities Bonds payable 45 37 Long-term borrowings 5,580 5,060 Lease liabilities 14,877 21,949 Provision for retirement benefits 241 277 Liabilities for refund of medical fees 3,207 3,207 Asset retirement obligations 547 604 Other 275 310 Total non-current liabilities 24,774 31,448 Total liabilities 30,377 38,461 Net assets Shareholders’ equity Share capital 35 35 Capital surplus 8,633 8,633 Retained earnings (74) (1,591) Treasury shares (5) (5) Total shareholders’ equity 8,589 7,072 Share acquisition rights 27 33 Total net assets 8,616 7,105 Total liabilities and net assets 38,994 45,567
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SUNWELS Co.,Ltd. (9229) - 8 - (2) Semi-annual statements of income (Millions of yen) Six months ended September 30, 2024 Six months ended September 30, 2025 Net sales 13,087 13,407 Cost of sales 10,061 12,294 Gross profit 3,025 1,113 Selling, general and administrative expenses 1,788 2,106 Operating profit (loss) 1,237 (993) Non-operating income Interest income 0 4 Subsidy income 33 86 Other 17 22 Total non-operating income 52 113 Non-operating expenses Interest expenses 383 555 Other 38 6 Total non-operating expenses 421 561 Ordinary profit (loss) 867 (1,441) Extraordinary losses Loss on retirement of non-current assets 2 4 Special investigation costs 12 – Total extraordinary losses 14 4 Profit (loss) before income taxes 853 (1,445) Income taxes 611 71 Profit (loss) 242 (1,517)
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SUNWELS Co.,Ltd. (9229) - 9 - (3) Semi-annual statements of cash flows (Millions of yen) Six months ended September 30, 2024 Six months ended September 30, 2025 Cash flows from operating activities Profit (loss) before income taxes 853 (1,445) Depreciation 607 875 Increase (decrease) in provision for bonuses 187 46 Increase (decrease) in provision for retirement benefits 32 35 Increase (decrease) in liabilities for refund of medical fees 831 – Increase (decrease) in allowance for doubtful accounts (0) 0 Interest and dividend income (0) (4) Interest expenses 383 555 Subsidy income (33) (86) Special investigation costs 12 – Decrease (increase) in trade receivables (781) (323) Decrease (increase) in inventories (0) (1) Increase (decrease) in trade payables 32 22 Increase (decrease) in accounts payable - other, and accrued expenses 250 (114) Increase (decrease) in deposits received (64) 9 Increase (decrease) in leasehold and guarantee deposits received 21 20 Other, net (117) (11) Subtotal 2,214 (423) Interest and dividends received 0 3 Interest paid (391) (511) Subsidies received 33 83 Income taxes paid (790) 29 Net cash provided by (used in) operating activities 1,066 (818) Cash flows from investing activities Purchase of property, plant and equipment (3,152) (1,091) Payments of leasehold deposits (127) (97) Other, net 22 5 Net cash provided by (used in) investing activities (3,256) (1,182) Cash flows from financing activities Net increase (decrease) in short-term borrowings (2,640) (40) Net increase/decrease in payables arising from securitized receivables – 1,337 Proceeds from long-term borrowings 4,500 – Repayments of long-term borrowings (398) (519) Redemption of bonds (7) (7) Dividends paid (241) (0) Repayments of lease liabilities (117) (137) Proceeds from disposal of treasury shares 4,574 – Other, net (31) (4) Net cash provided by (used in) financing activities 5,638 628 Net increase (decrease) in cash and cash equivalents 3,447 (1,372) Cash and cash equivalents at beginning of period 3,307 5,637 Cash and cash equivalents at end of period 6,755 4,265
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SUNWELS Co.,Ltd. (9229) - 10 - (4) Notes to the semi-annual non-consolidated financial statements (Notes regarding going concern assumption) Not applicable (Notes regarding significant changes in the amount of shareholders’ equity) Not applicable (Notes regarding special accounting methods for preparing semi-annual non-consolidated financial statements) (Calculation of tax expenses) The Company calculates tax expenses by rationally estimating the effective tax rate after applying the tax effect on profit before income taxes for the fiscal year including the six months ended September 30, 2025, and multiplying profit before income taxes by the estimated effective tax rate. However, in cases where the calculation of taxes using such estimated effective tax rate yields a result that is not reasonable to a significant extent, the effective statutory tax rate is used.
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SUNWELS Co.,Ltd. (9229) - 11 - (Revenue recognition) Information on breakdown of revenue from contracts with customers Six months ended September 30, 2024 (Millions of yen) Service category Total PD House Medical specific facilities Group homes Day-care services Welfare equipment business Kaatsu training business Hokkaido 1,177 – – – – – 1,177 Kanto 4,786 – – – – – 4,786 Chubu and Hokuriku 2,008 1,038 84 238 45 16 3,430 Kansai 2,137 – – – – – 2,137 Kyushu 1,350 – – – – – 1,350 Revenue from contracts with customers 11,460 1,038 84 238 45 16 12,882 Other revenue – – – – 205 – 205 Revenues from external customers 11,460 1,038 84 238 250 16 13,087 Note: “Other revenue” is revenue based on the Accounting Standard for Lease Transactions. Six months ended September 30, 2025 (Millions of yen) Service category Total PD House Medical specific facilities Group homes Day-care services Welfare equipment business Kaatsu training business Hokkaido 1,096 – – – – – 1,096 Kanto 4,939 – – – – – 4,939 Chubu and Hokuriku 2,126 910 85 236 48 15 3,422 Kansai 2,370 – – – – – 2,370 Chugoku and Shikoku 42 – – – – – 42 Kyushu 1,329 – – – – – 1,329 Revenue from contracts with customers 11,905 910 85 236 48 15 13,200 Other revenue – – – – 206 – 206 Revenues from external customers 11,905 910 85 236 255 15 13,407 Note: “Other revenue” is revenue based on the Accounting Standard for Lease Transactions. (Significant events after reporting period) Not applicable