DAIKYO INCORPORATED : 3Q Financial Results

Consolidated Financial Results for the Third Quarter Ended December 31, 2016 (J-GAAP) (Unaudited)

January 26, 2017 Listed company: DAIKYO INCORPORATED Listed stock exchange: Tokyo Securities code: 8840 URL:http://www.daikyo.co.jp Representative: Akira Yamaguchi, Representative Executive Officer, President

Contact: Koichi Hinago, General Manager, Group Corporate Planning Dept. Planned date of the filing of quarterly report: February 2, 2017

Planned dividends payment commencement date: -

3Q earnings presentation materials: Yes

Holding of 3Q earnings announcement: None

(Amounts less than one million yen are truncated)

1. Consolidated Performance for the Nine Months Ended December 31, 2016 (April 1, 2016 to December 31, 2016)

2. ) Consolidated operating results (Cumulative)

   (% figures show year-on-year change) (Millions of yen)

   Net sales		Operating income		Ordinary income		Profit attributable to owners of parent
   Nine months ended December 31, 2016	228,099	(4.3)%	12,639	5.9%	12,309	10.5%	8,290	11.0%
   Nine months ended December 31, 2015	238,320	24.7%	11,939	482.0%	11,142	859.2%	7,471	435.6%

   (Note) Comprehensive income: Nine months ended December 31, 2016: ¥8,447 million / 11.1%

   Nine months ended December 31, 2015: ¥7,601 million / 322.7%

   Net income per share	Fully diluted net income per share
   Nine months ended December 31, 2016 Nine months ended December 31, 2015	¥9.87 ¥8.89	¥9.74 ¥8.78

3. ) Consolidated financial position (Millions of yen except for %)

4. Total assets	Net assets	Shareholders' equity ratio
   As of December 31, 2016 As of March 31, 2016	264,406 274,594	171,933 166,090	65.0 60.5

   (Reference) Shareholders' equity:

   As of December 31, 2016: ¥171,933 million As of March 31, 2016: ¥166,090 million

5. State of Dividends

   Annual dividends (Yen)
   1Q-end	2Q-end	3Q-end	Year-end	Total
   Fiscal year ended March 31, 2016	-	0.00	-	3.00	3.00
   Fiscal year ending March 31, 2017	-	0.00	-
   Fiscal year ending March 31, 2017 (Forecast)	6.00	6.00

   (Note) Revisions to the latest dividend forecast: None

   The above "State of Dividends" represents the state of dividends from common stock only. Please refer to "State of Dividends from Class Stock" for the state of dividends from class stock (unlisted) issued by DAIKYO INCORPORATED ("the Company") with different rights from common stock.

6. Consolidated Performance Forecast for the Fiscal Year Ending March 31, 2017 (April 1, 2016 to March 31, 2017)

7. (% figures show year-on-year change) (Millions of yen)

   Net sales		Operating income		Ordinary income		Profit attributable to owners of parent		Net income per share
   Full year	340,000	1.5%	20,000	9.2%	19,000	11.2%	14,000	10.9%	¥16.57

   (Note) Revisions to the latest performance forecast: None

   Disclaimer:

   This document was prepared in English for convenience purposes only. The original Japanese document shall take precedence in the event of any discrepancies arising from the translations or interpretations contained in this document.

   * Notes

   New: -

   (Company name: )

   Excluded: -

   (Company name: )

8. ) Changes in significant subsidiaries during the nine months under review (changes in specified subsidiaries resulting in change in scope of consolidation): None

9. Application of special accounting treatment for the preparation of quarterly consolidated financial statements: None

10. ) Changes in accounting policies and estimates, or retrospective restatements

11. Change in accounting policies in accordance with revision of accounting standards: Yes

12. Change in accounting policies other than item (i) above: None

13. Change in accounting estimates: None

14. Retrospective restatements: None

    (Note) For details on those changes, refer to "2. Summary Information (Notes), (3) Changes in accounting policies and estimates, or retrospective restatements" on page 9.

15. ) Number of shares issued (common stock)

16. (Unit: share)

    1) Number of issued shares at end of period (including treasury stock):	Dec. 31, 2016	843,542,737	Mar. 31, 2016	843,542,737
    2) Number of shares of treasury stock at end of period:	Dec. 31, 2016	3,501,083	Mar. 31, 2016	3,488,219
    3) Average number of shares during period:	Apr.-Dec. 2016	840,050,209	Apr.-Dec. 2015	840,068,414

    • Presentation of implementation state for quarterly review procedures

      The quarterly review procedure based on the Financial Instruments and Exchange Act does not apply to these Consolidated Financial Results, and the quarterly review procedure based on the Financial Instruments and Exchange Act had not been completed as of the release of these Consolidated Financial Results.

    • Explanation of the appropriate use of performance forecasts, other points to note

    Forward-looking statements in this document, including performance outlook, are based on the information available to the Company at this time, as well as certain assumptions deemed reasonable by the Company. Accordingly, the actual results may vary significantly due to a variety of factors.

    Earnings presentation materials for the third quarter will be posted on TDnet on the day of the earnings announcement, and also posted on the Company's website.

    State of Dividends from Class Stock

    Annual dividends (Yen)
    1Q-end	2Q-end	3Q-end	Year-end	Total
    Fiscal year ended March 31, 2016	-	-	-	8.13	8.13
    Fiscal year ending March 31, 2017	-	-	-
    Fiscal year ending March 31, 2017 (Forecast)	7.73	7.73

    The breakdown of the dividends per share from class stock with different rights from common stock is as follows. (Class 1 preferred stock)

    1. Qualitative Information on Consolidated Performance in the Third Quarter (1) Explanation of the consolidated operating results

    During the nine months ended December 31, 2016, net sales decreased ¥10,221 million yen, or 4.3% year on year, to ¥228,099 million, operating income increased ¥700 million, or 5.9% year on year, to ¥12,639 million, and ordinary income increased ¥1,166 million, or 10.5%, to ¥12,309 million. Profit attributable to owners of parent increased ¥818 million, or 11.0%, to ¥8,290 million.

    Progress was generally in line with full-year forecasts, and there has been no change in the full-year performance forecast announced in May 2016.

    (Millions of yen)

    Category	Nine months ended December 31, 2015	Nine months ended December 31, 2016	Change
    Net sales	238,320	228,099	(10,221)
    Operating income	11,939	12,639	700
    Ordinary income	11,142	12,309	1,166
    Profit attributable to owners of parent	7,471	8,290	818

    Performance by segment is described below. Please note that amounts for each segment include intersegment transactions.

    The order in which segments are listed has been changed from the second quarter of this consolidated fiscal period.

    Performance by Segment (Millions of yen)

    Category	Nine months ended December 31, 2015		Nine months ended December 31, 2016		Change
    	Net sales	Operating income	Net sales	Operating income	Net sales	Operating income
    Real Estate Management	114,295	6,531	115,064	6,775	768	244
    Real Estate Brokerage	39,439	2,456	44,575	2,027	5,136	(428)
    Real Estate Development and Sales	88,170	5,254	71,953	5,609	(16,216)	354
    Adjustments (Eliminations or Corporate Assets/Expenses)	(3,584)	(2,302)	(3,494)	(1,772)	90	529
    Total	238,320	11,939	228,099	12,639	(10,221)	700