Heiwa Real Estate : July 31, 2023Consolidated Financial Results for the Three Months Ended June 30, 2023(298KB)

Consolidated Financial Results for the Three Months Ended June 30, 2023 [JGAAP]

Company Name: Heiwa Real Estate Co., Ltd.

Code Number: 8803 https://www.heiwa-net.co.jp/english/index.html

Representative: Representative Executive Officer, President and CEO Scheduled date for submitting the Quarterly Securities Report:

August 10, 2023

Availability of supplementary briefing material on quarterly results: No

Quarterly results briefing session: No

July 31, 2023

Stock Exchange Listing:

Tokyo, Nagoya, Sapporo, Fukuoka

Kiyoyuki Tsuchimoto

Scheduled date to commence dividend payments:-

													(Figures are rounded down to the nearest million yen)
1. Consolidated Financial Results for the Three Months Ended June 30, 2023 (From April 1, 2023 to June 30, 2023)
(1) Consolidated Results of Operations										(% indicates changes from the previous term)
			Net sales			Operating profit		Ordinary profit		Profit attributable to
							owners of parent
Three months ended		Millions of yen		%		Millions of yen		%	Millions of yen	%		Millions of yen		%
	15,028		-13.6			6,447		115.6	6,211	113.8		5,001		128.8
June 30, 2023
Three months ended		17,385		-48.6			2,990		-38.5	2,905	-39.3		2,186		-30.5
June 30, 2022
(Note) Comprehensive income:
Three months ended June 30, 2023: ¥4,622 million (467.5%)
Three months ended June 30, 2022: ¥814 million (-82.3%)
			Earnings per share		Diluted earnings per share
Three months ended						Yen					Yen
				139.76						-
June 30, 2023
Three months ended					60.22						-
June 30, 2022
(2) Consolidated Financial Position
				Total assets			Net assets		Equity-assets ratio		Net assets per share
				Millions of yen	Millions of yen				%					Yen
As of June 30, 2023				400,426		122,017				30.5				3,409.18
As of March 31, 2023				398,333		119,324				30.0				3,334.34
(Reference) Share capital:
As of June 30, 2023: ¥122,017 million
As of March 31, 2023: ¥119,324 million
2. Dividends
											Annual dividends per share
					End of 1Q			End of 2Q		End of 3Q		Year-end		Total
							Yen			Yen			Yen				Yen			Yen
Year ended March 31, 2023							-		50.00			-			54.00		104.00
Year ending March 31, 2024							-
Year ending March 31, 2024 (Forecast)							58.00			-			58.00		116.00

(Note) Revision of most recently announced planned dividend: None

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2024 (From April 1, 2023 to March 31, 2024)

(% indicates changes from the previous term)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Earnings per
		owners of parent	share
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	44,100	-0.9	12,300	14.1	10,700	10.9	8,200	-10.3	229.11

(Note) Revision of most recently announced forecast of financial results: None

Notes:

1. Significant changes in subsidiaries during the period under review (changes in specified subsidiaries accompanying changes in scope of consolidation): Not applicable
   Subsidiaries added to the scope of consolidation: None
   Subsidiaries removed from the scope of consolidation: None
2. Application of specific accounting treatment in the preparation of the consolidated financial statements for the period under

review: Yes

For details, please refer to the section on page 8 entitled, "Application of specific accounting treatment in the preparation of consolidated financial statements for the period under review," under "2. Consolidated Financial Statements and Notes," in "(3) Notes to Consolidated Financial Statements."

1. Changes in accounting policies, changes in accounting estimates and corrections of errors
2. 1. Changes in accounting policies accompanying the revisions to items such as accounting standards: Not applicable
   2. Changes in accounting policies other than 1) above: Not applicable
   3. Changes in accounting estimates: Not applicable
   4. Corrections of errors: Not applicable

1. Total number of issued shares (common stock)
2. 1. Total number of issued shares at end of period (including treasury shares)
   2. Total number of treasury shares at end of period
   3. Average number of shares during period

As of June 30, 2023	38,859,996	As of March 31, 2023	38,859,996
shares	shares
As of June 30, 2023	3,069,119	As of March 31, 2023	3,073,514
shares	shares
As of June 30, 2023	35,787,737	As of June 30, 2022	36,304,553
shares	shares

Note: Treasury shares include the Company's shares held in a trust account for a stock compensation plan for executive officers and managing officers of the Company and certain subsidiaries, and for a trust account for the Company's employee stock ownership plan.

Notes:

・This report of financial results was not subject to a quarterly audit by certified public accountants or auditing firms. ・Explanations for the appropriate use of the forecast of financial results and other points to note

Disclaimer: The forecast amounts and other forward-looking statements contained in this document are based on information available and certain assumptions deemed reasonable by the Company at the time of preparing this report. Actual results may differ substantially from these forecasts.

For more information concerning the forecast of financial results, please refer to the section on page 3 entitled, "(3) Overview of Financial Results Forecast and Future Expectations," under "1. Qualitative Information Related to Financial Results."

Table of Contents

1． Qualitative Information Related to Financial Results………………………………………………………………………	2
(1) Overview of Operating Results……………………………………………………………………………………………	2
(2) Overview of Financial Position……………………………………………………………………………………………	3
(3) Overview of Financial Results Forecast and Future Expectations ………………………………………………………	3
2． Consolidated Financial Statements and Notes………………………………………………………………………………	4
(1) Consolidated Balance Sheets ……………………………………………………………………………………………	4
(2) Consolidated Statements of Income and Comprehensive Income ………………………………………………………	6
Consolidated Statements of Income
Three months ended June 30, 2022 and 2023………………………………………………………………………	6
Consolidated Statements of Comprehensive Income
Three months ended June 30, 2022 and 2023………………………………………………………………………	7
(3) Notes to Consolidated Financial Statements………………………………………………………………………………	8
Notes on going concern assumption……………………………………………………………………………………	8
Notes in case of significant changes in shareholders' equity……………………………………………………………	8
Application of specific accounting treatment in the preparation of the consolidated financial statements for the period	8
under review ……………………………………………………………………………………………………………
Segment information ……………………………………………………………………………………………………	8

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1． Qualitative Information Related to Financial Results

(1) Overview of Operating Results

In the first three months of the fiscal year ending March 31, 2024, the Japanese economy continued to pick up as economic and social activities returned to normal following the lifting of pandemic-related restrictions and various measures implemented by the government. Nevertheless, economic downturns in other countries triggered by monetary tightening around the world, volatility and risks in financial capital markets, and rising prices of commodities caused by the prolonged conflict in Ukraine will need to be closely monitored going forward.

Against this backdrop, the Company's consolidated sales and profits were mixed during the first three months of the current fiscal year compared with the same period of the previous fiscal year. Net sales totaled ¥15,028 million, down ¥2,357 million (13.6%). Despite this decrease, operating profit rose by ¥3,456 million (115.6%) to ¥6,447 million, and ordinary profit increased by ¥3,306 million (113.8%) to ¥6,211 million. Profit attributable to owners of parent came to ¥5,001 million, an increase of ¥2,815 million (128.8%).

Consolidated financial results by business segment are as follows.

						(Millions of yen)
	Three months ended	Three months ended	Difference
Segment	June 30, 2022	June 30, 2023
	Net sales	Operating profit	Net sales	Operating profit	Net sales	Operating profit
Building Business	16,677	3,122	14,412	6,756	(2,264)	3,633
Asset Management Business	708	340	615	214	(92)	(126)
Adjustments	-	(472)	-	(523)	-	(50)
Total	17,385	2,990	15,028	6,447	(2,357)	3,456

1) Building Business

In the Building Business segment, leasing revenue increased by ¥534 million (8.9%) year on year to ¥6,546 million, mainly due to contributions from buildings acquired in the previous fiscal year, namely the Higashi-Yaesu City Building (Chuo-ku, Tokyo), Daiei Building (Nagoya, Aichi), and Addit Sakura-dori building (Nagoya, Aichi). Revenue from sales of properties fell by ¥2,695 million (26.3%) to ¥7,555 million, largely due to decreased sales of inventories. These results combined with other net sales in this segment brought total net sales to ¥14,412 million, a decrease of ¥2,264 million (13.6%) compared with the same period of the previous fiscal year. Nevertheless, segment operating profit rose by ¥3,633 million (116.4%) to ¥6,756 million, mainly due to increased profits from the sales of inventories.

Breakdown of net sales			(Millions of yen)
Classification	Three months ended	Three months ended	Difference
June 30, 2022	June 30, 2023
Leasing revenue	6,011	6,546	534
Revenue from sales of properties	10,250	7,555	(2,695)
Other	416	311	(104)
Total	16,677	14,412	(2,264)

2) Asset Management Business

In the Asset Management Business segment, asset management revenue decreased by ¥82 million (16.1%) to ¥426 million, and brokerage commissions declined by ¥10 million (5.2%) to ¥188 million. As a result, segment net sales came to ¥615 million, down ¥92 million (13.0%) year on year. Segment operating profit totaled ¥214 million, a decrease of ¥126 million (37.0%) compared with the same period of the previous fiscal year.

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Breakdown of net sales				(Millions of yen)
Classification		Three months ended	Three months ended		Difference
	June 30, 2022	June 30, 2023
Asset management revenue		509	426		(82)
Brokerage commissions		199	188		(10)
Total		708	615		(92)
(2) Overview of Financial Position
Total assets, total liabilities, and net assets as of March 31 and June 30, 2023, were as follows:
					(Millions of yen)
		March 31, 2023	June 30, 2023		Difference
Total assets		398,333	400,426		2,093
Total liabilities		279,009	278,409		(600)
Net assets		119,324	122,017		2,693
Interest-bearing liabilities		226,895	229,503		2,608

(Note) Interest-bearing liabilities are comprised of short-term loans payable, current portion of bonds, current portion of long-term loans, bonds, long-term loans payable, and long-term accounts payable.

Total assets

As of June 30, 2023, total assets amounted to ¥400,426 million, an increase of ¥2,093 million compared with March 31, 2023. Among the main factors underlying this result, cash and deposits increased by ¥2,708 million, and property, plant and equipment increased by ¥2,361 million, which reflected construction cost outlays for Caption by Hyatt Kabutocho Tokyo (Chuo-ku, Tokyo). These and other items more than offset a decrease in real estate for sale of ¥3,119 million.

Total liabilities

As of June 30, 2023, total liabilities came to ¥278,409 million, a decrease of ¥600 million compared with March 31, 2023. Among the main factors underlying this result, trade accounts payable decreased by ¥3,812 million, more than offsetting an increase in interest-bearing liabilities of ¥2,608 million.

Net assets

As of June 30, 2023, net assets totaled ¥122,017 million, an increase of ¥2,693 million compared with March 31, 2023. This was mainly the result of an increase in retained earnings of ¥3,350 million, which more than offset decreases in valuation difference on available-for-sale securities of ¥379 million and revaluation reserve for land of ¥290 million.

(3) Overview of Financial Results Forecast and Future Expectations

The Company has made no changes to its forecast of consolidated financial results for the fiscal year ending March 31, 2024, originally disclosed on April 28, 2023.

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