Mitsui Fudosan : Results for the Six Months Ended September 30, 2019(571KB)

FACT BOOK

For the Six Months Ended September 30, 2019

November 7, 2019

1-1, Nihonbashi Muromachi 2-chome,Chuo-Ku, Tokyo, 103-0022, Japan

https://www.mitsuifudosan.co.jp/english/

Corporate Data	Contents
(As of September 30, 2019)
Head Office:	Corporate Data, Contents	1
1-1, Nihonbashi Muromachi 2-chome,Chuo-ku, Tokyo,
103-0022, Japan	Consolidated Business Overview	2
Date of Establishment:	Segment Results	3 - 6
July 15, 1941
	[Reference] Overseas Business	6
Share Capital:
¥339,766 million	Consolidated Balance Sheets	7-8
Number of Issued and Outstanding Shares:	Consolidated Statements of Income	9
991,424,727
	Consolidated Statements of Cash Flows	10
Stock Exchange Listings:
Tokyo (Code: 8801)	Consolidated Statements of Earning Forecasts	11-12
	Contingent Liabilities	13
	［Reference］Change of Segment Classification	14

Forward-Looking Statements

In this Fact Book, statements other than historical facts are forward-looking statements that reflect the Company's plans and expectations. These forward-looking statements involve risks and uncertainties related to internal and external factors that may cause actual results and achievements to differ from those anticipated in these statements. Therefore, we do not advise potential investors to base investment decisions solely on this Fact Book.

1

CONSOLIDATED BUSINESS OVERVIEW

Results of Operations			(¥ millions)
		Six Months Ended September 30	Change
		2019	2018
Revenue from Operations	¥888,776	¥860,705	¥28,071
Leasing	313,173	292,882	20,291
Property Sales	222,948	233,259	(10,311)
Management	206,442	195,014	11,427
Other	146,211	139,548	6,663
Operating Income	118,604	112,110	6,494
Leasing	78,203	71,670	6,533
Property Sales	34,788	37,989	(3,200)
Management	28,893	23,689	5,204
Other	(1,172)	434	(1,607)
Elimination or Corporate	(22,109)	(21,674)	(434)
Non-Operating Income/Expenses	(10,775)	(5,580)	(5,194)
Equity in Net Income/Loss of Affiliated Companies	3,421	3,146	274
Interest Income/Expense, in Net	(14,047)	(12,578)	(1,468)
Other, in Net	(149)	3,851	(4,000)
Ordinary Income	107,829	106,529	1,299
Extraordinary Gains/Losses	(1,273)	-	(1,273)
Extraordinary Gains	-	-	-
Extraordinary Losses	1,273	-	1,273
Income before Income Taxes	106,556	106,529	26
Income Taxes	39,735	37,020	2,715
Profit	66,820	69,509	(2,688)
Profit (Loss) Attributable to Non-Controlling Interests	496	958	(462)
Profit Attributable to Owners of Parent	¥66,324	¥68,550	(¥2,226)

◆Overview

● In the six‐month period under review, revenue and earnings increased in the "Leasing" segment. This was mainly due to the full‐term contributions from Nihonbashi Takashimaya Mitsui Building, msb Tamachi Station Tower South and 55 Hudson Yards, which were completed for operation during the previous fiscal year. Additionally, due to progress with the smooth handover of condominiums-for-saleat Park Tower Harumi in the Property Sales segment and an increase in the number of brokerage units handled in the "Mitsui Rehouse" business (brokerage business for individuals), in overall terms revenue from operations increased ¥28.0 billion, or 3.3%, to ¥888.7 billion, operating income climbed ¥6.4 billion, or 5.8%, to ¥118.6 billion, and ordinary income increased ¥1.2 billion, or 1.2%, to ¥107.8 billion year on year. Profit attributable to owners of parent decreased ¥2.2 billion, or 3.2%, to ¥66.3 billion. *1

Taking into consideration a variety of factors, including the Company's robust results in the six-month period under review, Mitsui Fudosan has decided to upwardly revise its consolidated forecasts for the full fiscal year. Revenue from operations is now projected to reach ¥2,013 billion compared with the previous forecast of ¥2,000.0 billion, operating income ¥280.0 billion compared with ¥267.0 billion, and ordinary income ¥259.0 billion compared with ¥246.0 billion. Profit attributable to owners of parent is expected to come in at ¥175.0 billion compared with the previous forecast of ¥170.0 billion.

The interim dividend is ¥22 per share (¥20 per share for the corresponding period of the previous fiscal year). This is unchanged from the forecast announced at the beginning of the period.

*1 Due to factors that include a backswing from the same period of the previous year, when many profits were recorded in the UK and other countries where the corporate tax rate was lower than Japan, and corporate taxes were lower than in the six months under review.

Progress Comparison with Full Year Forecasts			(¥ millions)
	Six Months Ended	Year to March 2020	6-Month
	（Forecast as of	Results/Full-Year
	September 30, 2019
			November 7, 2019)	Forecast (%)
Revenue from Operations		¥888,776	¥2,013,000	44.2
Operating Income		118,604	280,000	42.4
Ordinary Income		107,829	259,000	41.6
Profit Attributable to Owners of Parent		66,324	175,000	37.9
Extraordinary Gains/Losses	(¥ millions)
【Extraordinary Losses】
Loss on Disposal of Fixed Assets		1,273
Total		1,273
Consolidated Statements of Comprehensive Income			(¥ millions)
			Six Months Ended September 30
			2019	2018
Profit		¥66,820	¥69,509
Other Comprehensive Income		66,023	16,450
Valuation Difference on Available-For-Sale Securities		74,430	26,224
Deferred Gains or Losses on Hedges		(134)	277
Foreign Currency Translation Adjustment		(7,357)	(6,582)
Remeasurements of Defined Benefit Plans, Net of Tax		(403)	313
Share of Other Comprehensive Income of Associates Accounted	(511)	(3,782)
for Using Equity Method
Comprehensive Income		¥132,844	¥85,960
(Comprehensive Income Attributable to Owners of the Parent)		132,795	85,354
(Comprehensive Income Attributable to Non-Controlling Interests)	48	605

【Reference】 Nonconsolidated Operating Income/Expenses (Mitsui Fudosan)	(¥ millions)
		Six Months Ended September 30	Change
		2019	2018
Revenue from Operations	Leasing	¥284,919	¥271,813	¥13,105
	Property Sales	17,333	24,888	(7,554)
	Other	17,545	18,098	(552)
	Total	319,798	314,799	4,999
Gross Profit Margin (%)	Leasing	17.9	18.3	(0.4)pt
	Property Sales	44.6	39.3	5.3 pt
	Other	25.5	28.8	(3.4)pt
Operating Income		¥44,073	¥46,131	¥(2,058)

2

SEGMENT RESULTS

[1] LEASING

			(¥ millions)
	Six Months Ended September 30	Change
	2019	2018
Revenue from Operations	¥313,173	¥292,882	¥20,291
Operating Income	78,203	71,670	6,533
	Year to March 2020	6-Month Results/	Year Ended
	（Forecast as of
	Full-Year Forecast (%)	March 31, 2019
	November 7, 2019)
Revenue from Operations	¥630,000	49.7	¥603,284
Operating Income	144,000	54.3	141,945

● For the six‐month period under review, revenue from operations rose ¥20.2 billion and operating

income increased ¥6.5 billion compared with the corresponding period of the previous fiscal year for the segment as a whole. This was mainly due to the full‐term contributions from Nihonbashi Takashimaya Mitsui Building, msb Tamachi Tamachi Station Tower South, and 55 Hudson Yards, which were completed and opened for operation during the previous fiscal year. The vacancy rate for the Company's office buildings located in the Tokyo metropolitan area was 1.8% on a non‐consolidated basis.

Leased Floor Space								(¥ millions)
						At September 30	Change
						2019	2018
	Revenue			Office Buildings	¥178,155	¥164,754	¥13,400
			Retail Facilities	118,878	115,099	3,778
Office Buildings and	Total Leased Floor Space	(1,000 m2):		5,349	5,165	184
				Owned	1,991	1,825	166
Retail Facilities		Office Buildings
	Managed	1,252	1,171	81
			Retail Facilities	Owned	1,575	1,580	(6)
			Managed	531	588	(57)
Other	Revenue					16,140	13,027	3,112
Total Revenue						¥313,173	¥292,882	¥20,291
Vacancy Rate									(%)
				9/2019	6/2019	3/2019	3/2018	3/2017	3/2016
Consolidated				2.0	1.9	1.8	2.4	3.1	2.2
Office Buildings and Retail Facilities (including overseas)
Non-consolidated				1.8	2.0	1.7	2.2	3.4	2.6
Tokyo Metropolitan Area Office Buildings
Regional Area Office Buildings				1.8	1.8	1.8	2.3	2.3	3.1

【Reference】 Non-consolidated Results

(Revenue from operations)

• Newly on-stream and full-term contribution projects: ¥11.5 billion year-on-year increase in revenue
• Existing properties: ¥5.1 billion year-on-year increase in revenue
• Shifting, terminations, etc.: ¥3.5 billion year-on-year decrease in revenue

Breakdown of Leasing Operations (Non-consolidated)

					At September 30
		2019		2018	2019		2018	2019	2018
		Total		Tokyo		Regional Areas
			Metropolitan Area
	Number of Buildings	136		133	108		104	28	29
Office	Leased Floor Space (1,000m2)	2,821		2,727	2,496		2,401	325	326
Buildings	Leasing Revenue (¥ millions)	153,493		143,333	142,573		132,500	10,920	10,833
	Vacancy Rate (%)	1.8		2.7	1.8		2.7	1.8	2.6
	Number of Buildings	91		85	65		58	26	27
Retail	Leased Floor Space (1,000m2)	2,051		2,090	1,383		1,348	668	742
Facilities	Leasing Revenue (¥ millions)	114,687		112,340	80,173		79,167	34,513	33,172
	Vacancy Rate (%)	1.2		1.2	1.3		1.4	1.0	0.7

Major Projects during the Period (six-month total)

(FULL-TERM CONTRIBUTION)
2 Television Centre (London, UK)	Office building completed in March 2018
msb Tamachi Tamachi Station Tower South (Minato-ku, Tokyo)	Office building completed in May 2018
Nihonbashi Takashimaya Mitsui Building (Chuo-ku, Tokyo)	Office building completed in June 2018
OVOL Nihonbashi Building (Chuo-ku, Tokyo)	Office building completed in June 2018
LaLaport NAGOYA minato AQULS (Nagoya, Aichi)	Retail facility opened in September 2018
55 Hudson Yards (New York, US)	Office building completed in October 2018
MITSUI OUTLET PARK TAICHUNG PORT (Taichung, Taiwan)	Retail facility opened in December 2018
Nihonbashi Muromachi Mitsui Tower (Chuo-ku, Tokyo)	Office building completed in March 2019

3

[2] PROPERTY SALES

			(¥ millions)
	Six Months Ended September 30	Change
	2019	2018
Revenue from Operations	¥222,948	¥233,259	¥(10,311)
Operating Income	34,788	37,989	(3,200)
	Year to March 2020	6-Month Results/	Year Ended
	（Forecast as of
	Full-Year Forecast (%)	March 31, 2019
	November 7, 2019)
Revenue from Operations	¥613,000	36.4	¥530,766
Operating Income	124,000	28.1	98,037

● In the six‐month period under review, smooth progress with handovers in the "Property

Sales to Individuals (Domestic)" category resulted in increased revenue and earnings. In contrast, revenue and earnings in the "Property Sales to Investors and Individual (Overseas)" category decreased, mainly reflecting the property sales to investors in the corresponding period of the previous fiscal year. Accounting for each of these factors, overall revenue from operations declined ¥10.3 billion and operating income fell ¥3.2 billion year on year in this segment as a whole.

In newly constructed domestic condominiums, the Company's contract rate as of September 30, 2019, was 94% of the 3,400 units projected for the fiscal year, compared with 90% as of September 30, 2018.

Major Projects Undertaken during the Period (six-month total) (Property Sales to Individuals (Domestic))

Park Tower Harumi (Chuo-ku, Tokyo)	Condominiums
Park Court Hamarikyu The Tower (Minato-ku, Tokyo)	Condominiums
Park Court NOGIZAKA The Tower (Minato-ku, Tokyo)	Condominiums
Park Court Aoyama The Tower (Minato-ku, Tokyo)	Condominiums
Fine Court Kokubunji Koigakubo Cocoro Cross (Kokubunji, Tokyo)	Detached Housing

(Property Sales to Investors)

Osaki Bright Core (Shinagawa-ku, Tokyo)	Office Building
Osaki Bright Plaza (Shinagawa-ku, Tokyo)	Office Building
Ikebukuro GLOBE(Toshima-ku, Tokyo)	Retail Facilities
Park Axis Oshiage Terrace (Sumida-ku, Tokyo)	Rental Housing
Park Axis Ikegami (Ota-ku, Tokyo)	Rental Housing

(Property Sales to Individuals (Overseas))

Television Centre (The Helios, The Crescent) (London, UK)	Condominiums
Robinson Landing (Alexandria, VA, US)	Detached Housing

Property Sales to Individuals and Investors									(¥ millions)
				Six Months Ended September 30			Change
				2019				2018
					Unit Price				Unit Price			Unit Price
			Revenue	Units	(￥10		Revenue	Units	(￥10	Revenue	Units	(￥10
					thousand)				thousand)			thousand)
	Condominiums		¥145,393	1,775	¥8,190	¥122,943	1,387	¥8,864	¥22,450	388	¥(674)
Property Sales to	Detached Housing		17,659	261	6,766		19,915	268	7,431	(2,255)	(7)	(665)
Individuals (Domestic)	Subtotal		163,053	2,036	8,008		142,858	1,655	8,632	20,194	381	¥(624)
	Operating Income			23,731				17,820			5,911
Property Sales to Investors	Revenue			59,895				90,400			(30,505)
and Individuals (Overseas),
Operating Income			11,057				20,169			(9,112)
etc.
Total Revenue				222,948				233,259			(10,311)
Total Operating Income				¥34,788				¥37,989			¥(3,200)
Breakdown for the Revenue from the Property Sales to Individuals (Domestic)	(¥ millions)
			Six Months Ended September 30	Change
			2019	2018
			Revenue	Units	Revenue		Units	Revenue	Units
Condominiums	Tokyo Metropolitan		¥134,986	1,546	¥109,938		1,111	¥25,048	435
Area
	Other		10,407	229	13,005		276	(2,597)	(47)
	Total		145,393	1,775	122,943		1,387	22,450	388
Detached Housing	Tokyo Metropolitan		17,273	253	19,915		268	(2,642)	(15)
Area
	Other		386	8	-		-	386	8
	Total		¥17,659	261	¥19,915		268	¥2,255	(7)
Inventories of Property Sales to Individuals (Domestic)					(Units)
			9/2019	6/2019	3/2019		3/2018	3/2017	3/2016
Condominiums			162	106	141		108	321	88
Detached Housing			48	24	30		40	69	127
Total			210	130	171		148	390	215

Contracted for Sale from the Property Sales to Individuals (Domestic)				(Units)
	Contracts at	Contracts	Total		Reported No. of	Contracts at End	Newly Launched
	Beginning of
	during Term		Units	of Term	during Term
	Term
Condominiums	4,331	1,340		5,671	1,775	3,896	1,301
Detached Housing	119	199		318	261	57	213
Total	4,450	1,539		5,989	2,036	3,953	1,514

4