Nippon Commercial Development : Summary of Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2021

November 12, 2021

Summary of Consolidated Financial Results for the Third Quarter

of the Fiscal Year Ending December 31, 2021 (Nine Months Ended September 30, 2021)

Company name: Nippon Commercial Development Co., Ltd.	[Japanese GAAP]
Listing: TSE/NSE, First Sections
Securities code:	3252	URL: https://www.ncd-jp.com
Representative: Tetsuya Matsuoka, President
Contact:	Takahiro Tanaka, General Manager of Accounting Division
	Tel: [phone]

Scheduled date of filing of Quarterly Report:	November 15, 2021
Scheduled date of payment of dividend:	-
Preparation of supplementary materials for quarterly financial results:	Yes

Holding of quarterly financial results meeting:

None

(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the Nine Months Ended September 30, 2021 (January 1, 2021 - September 30, 2021)

(1) Consolidated results of operations							(Percentages represent year-on-year changes)
	Net sales	Operating profit		Ordinary profit	Profit attributable to
		owners of parent
Nine months ended Sep. 30, 2021	Million yen		%	Million yen		%		Million yen		%	Million yen		%
39,685		-	3,594		-		3,660		-	2,591		-
Nine months ended Sep. 30, 2020	-		-	-		-			-		-	-		-
Note: Comprehensive income (million	yen)		Nine months ended Sep. 30, 2021:	2,678	(-%)
		Nine months ended Sep. 30, 2020:	-	(-%)
	Net income per share	Diluted net income per
				share
Nine months ended Sep. 30, 2021	Yen	Yen
	141.71			-
Nine months ended Sep. 30, 2020		-			-
From the fiscal year ended December	31, 2020, Nippon Commercial Development Co., Ltd. (hereinafter, "the Company") has

changed its financial closing date from March 31 to December 31 upon approval of the proposal: Partial Amendments to the Articles of Incorporation at the extraordinary meeting of shareholders held on December 24, 2020. The Company has also changed the financial closing date of its domestic subsidiaries from March 31 to December 31. Accordingly, the Company did not prepare the consolidated financial statements for the third quarter of the fiscal year ended December 31, 2020. Therefore, the year-on-year changes and consolidated results of operations for the nine months ended September 30, 2020 have been omitted.

(2) Consolidated financial position

	Total assets	Net assets		Equity ratio
As of Sep. 30, 2021	Million yen	Million yen		%
	77,751	27,063		34.8
As of Dec. 31, 2020		71,220	24,841		34.9
Reference: Shareholders' equity (million yen)	As of Sep. 30, 2021: 27,063	As of Dec. 31, 2020: 24,841

2. Dividends

				Dividend per share
	1Q-end		2Q-end	3Q-end	Year-end	Total
	Yen		Yen	Yen	Yen	Yen
Fiscal year ended Dec. 31, 2020		-	0.00	-	25.00		25.00
Fiscal year ending Dec. 31, 2021		-	0.00	-
Fiscal year ending Dec. 31, 2021					50.00		50.00
(forecasts)
Note: Revisions to the most recently	announced dividend	forecast: None

3. Consolidated Forecast for the Fiscal Year Ending December 31, 2021 (January 1, 2021 - December 31, 2021)

(Percentages represent year-on-year changes)

	Net sales		Operating profit	Ordinary profit	Profit attributable to	Net income per share
		owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
Full year	51,000	-	5,400	-	4,200	-	2,900	-	158.59

Note: Revisions to the most recently announced consolidated forecast: None

The fiscal year ended December 31, 2020 covers the period of nine months as a transitional period for a change in the financial closing date. Therefore, we have omitted the year-on-year change figures.

• Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in the scope of consolidation): None

Newly added: -

Excluded: -

1. Application of special accounting methods for presenting quarterly consolidated financial statements: None
2. Changes in accounting policies and accounting estimates, and restatements

1)	Changes in accounting policies due to revisions in accounting standards, others:	None
2)	Changes in accounting policies other than 1) above:	None
3)	Changes in accounting estimates:	None
4)	Restatements:	None

(4) Number of outstanding shares (common shares)

1) Number of shares outstanding at the end of the period (including treasury shares)

As of Sep. 30, 2021:	18,285,800 shares	As of Dec. 31, 2020:	18,285,800 shares
2) Number of treasury shares at the end of the period
As of Sep. 30, 2021:	141 shares	As of Dec. 31, 2020:	141 shares
3) Average number of shares outstanding during the period
Nine months ended Sep. 30, 2021:	18,285,659 shares	Nine months ended Sep. 30, 2020:	- shares

From the fiscal year ended December 31, 2020, the Company has changed its financial closing date from March 31 to December 31. Accordingly, the Company did not prepare the consolidated financial statements for the third quarter of the fiscal year ended December 31, 2020. Therefore, the average number of shares outstanding during the period for the nine months ended September 30, 2020 has been omitted.

• The current quarterly financial report is not subject to quarterly review by an auditing firm.
• Cautionary statement with respect to forward-looking statements, and other special items

Earnings forecasts regarding future performance in this material are based on assumptions judged to be valid and information currently available to the Company. Actual results may differ significantly from these forecasts for a number of factors. Please refer to "1. Qualitative Information on Quarterly Consolidated Financial Performance, (3) Explanation of Consolidated Forecast and Other Forward-looking Statements" on page 3 of the attachments for assumptions for forecasts and notes of caution for usage.

Change in presentation of monetary units

Amounts in the consolidated financial statements and segment information, presented in "thousands of yen" in prior periods, are presented in "millions of yen" effective from the first quarter of the current fiscal year.

The aforementioned amounts for the previous fiscal year are also restated in order to facilitate year-on-year comparisons.

Nippon Commercial Development Co., Ltd. (3252) Financial Results for the Third Quarter of FY12/21

Contents of Attachments
1. Qualitative Information on Quarterly Consolidated Financial Performance	2
(1)	Explanation of Results of Operations	2
(2)	Explanation of Financial Position	3
(3)	Explanation of Consolidated Forecast and Other Forward-looking Statements	3
2. Quarterly Consolidated Financial Statements and Notes	4
(1)	Quarterly Consolidated Balance Sheet	4
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income	6
	Quarterly Consolidated Statement of Income
	For the Nine-month Period	6
	Quarterly Consolidated Statement of Comprehensive Income
	For the Nine-month Period	7
(3)	Notes to Quarterly Consolidated Financial Statements	8
	Going Concern Assumption	8
	Significant Changes in Shareholders' Equity	8
	Changes in the Scope of Consolidation or Application of the Equity Method	8
	Segment and Other Information	8

1

Nippon Commercial Development Co., Ltd. (3252) Financial Results for the Third Quarter of FY12/21

1. Qualitative Information on Quarterly Consolidated Financial Performance

(1) Explanation of Results of Operations

From the fiscal year ended December 31, 2020, Nippon Commercial Development Co., Ltd. (hereinafter "the Company") has changed its financial closing date from March 31 to December 31 upon approval of the proposal: Partial Amendments to the Articles of Incorporation at the Extraordinary General Meeting of Shareholders held on December 24, 2020. The Company has also changed the financial closing date of its domestic subsidiaries from March 31 to December 31. Accordingly, the Company did not prepare the consolidated financial statements for the third quarter of the fiscal year ended December 31, 2020. Therefore, the year-on-year comparison of results of operations has been omitted.

In the first nine months of the fiscal year ending December 31, 2021 (hereinafter, "the period under review"), the Japanese economy experienced restraints of social and economic activities over a long period due to the preventive measures against the spread of COVID-19 infections and has only seen a gradual recovery in domestic demand, mainly personal consumption. While widespread vaccinations against COVID-19 were expected to gradually resume economic activity and boost the economic recovery trend, the economic outlook remained uncertain caused primarily by the new variants found at home and abroad.

In the Japanese real estate and real estate finance industries, an increase in vacancy rates and a decline in rental rates in urban areas have become obvious, affected by the shrinkage of office space or consolidation of bases in the background of widespread teleworking due to the expansion of the COVID-19 infection. However, the overall market for real estate investment has remained stable backed by the continued positive mindset of investors and low interest rates.

Please note that 80% of the tenants of our JINUSHI Business belong to the industry sectors (including the logistics industry) that deal in daily necessities. Such tenants are generally performing well.

Under these circumstances, the Nippon Commercial Development Group (hereinafter "the Group") made a steady progress in selling real estate for sale to major leasing companies, backed by the growing reputation among financial institutions and investors for JINUSHI Business as a real estate investment method to generate stable profits over the long-term without a risk of closure of tenants and decrease in rent even under the COVID-19 crisis.

As a result, the Group reported net sales for the period under review of 39,685 million yen, operating profit of 3,594 million yen, ordinary profit of 3,660 million yen, and profit attributable to owners of parent of 2,591 million yen.

The Company, JINUSHI Asset Management Co., Ltd. (hereinafter "JINUSHI AM") and JINUSHI Private REIT Investment Corporation (hereinafter "JINUSHI REIT") are engaged in the Sponsor Support Agreement, in which the Company acts as the sponsor of JINUSHI REIT. As announced on October 15, 2021 with "Notice on Sale of Real Estate for Sale to JINUSHI Private REIT Investment Corporation" (Japanese version only), the Company has resolved to sell three properties to JINUSHI REIT in accordance with the said agreement on January 7, 2022 with the aggregate sales price of 4,915 million yen.

JINUSHI REIT plans to increase its capital for the sixth time in early January 2022 and acquire 25 properties with the total value of approximately 42.4 billion yen to increase its asset size to 151.5 billion yen. The 25 properties include those which the Company sold in accordance with the "Basic Agreements to Set a Comprehensive Facility for Trading of Real Estate for Sale (Including Beneficial Interests in Trust)," the agreements executed in 2019 by the Company and JINUSHI AM separately with two major leasing companies, SMFL MIRAI Partners Co., Ltd. and ML Estate Company, Limited.

Results by business segment were as follows:

1. Real Estate Investment Business
   The segment reported sales of 38,875 million yen with segment operating profit of 5,659 million yen.

2

Nippon Commercial Development Co., Ltd. (3252) Financial Results for the Third Quarter of FY12/21

1. Subleasing, Leasing and Fund Fee Business
   The segment reported sales of 793 million yen with segment operating profit of 531 million yen.
2. Planning and Brokerage Business
   The segment reported sales of 16 million yen with segment operating profit of 8 million yen.

1. Explanation of Financial Position Assets, Liabilities and Net Assets

Total assets increased 6,530 million yen from the end of the previous fiscal year to 77,751 million yen at the end of the period under review. This increase was attributable mainly to increases of 4,822 million yen in real estate for sale and 813 million yen in cash and deposits.

Total liabilities increased 4,308 million yen from the end of the previous fiscal year to 50,688 million yen. This increase was attributable mainly to increases of 3,060 million yen in income taxes payable, 953 million yen in advances received and 644 million yen in deferred tax liabilities as a result of consolidating Tsunoda Corporation Limited, which were partially offset by a decrease of 601 million yen in borrowings.

Net assets increased 2,221 million yen from the end of the previous fiscal year to 27,063 million yen. This increase was attributable mainly to the profit attributable to owners of parent of 2,591 million yen. Consequently, the equity ratio at the end of the period under review was 34.8%.

(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

Both net sales and profits for the period under review have progressed as planned. As we expect that going forward net sales and profits will progress at the same level presented in "3. Consolidated Forecast for the Fiscal Year Ending December 31, 2021 (January 1, 2021 - December 31, 2021)" in "Summary of Consolidated Financial Results for the Fiscal Year Ended December 31, 2020 [Japanese GAAP]" announced on February 10, 2021, we have left the forecast unchanged.

For more details on the consolidated forecast for the fiscal year ending December 31, 2021, please refer to "Results of Operations for the First Nine Months of the Fiscal Year Ending December 31, 2021" (available on our website (*)), which is the supplementary materials for the Summary of Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2021.

(*) https://www.ncd-jp.com/ (IR Information, IR News)

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