Summary of Accounts for First Two Quarters of Fiscal Year Ending December 2022
(Japanese GAAP) (Consolidated)
July 26, 2022 | |||||
Name of listed company: | ES-CON JAPAN Ltd. | Listing exchange: Tokyo Stock Exchange | |||
Code: | 8892 | URL: | https://www.es-conjapan.co.jp/english/ | ||
Representative: | (Name) | Takatoshi Ito | (Position) | President & Representative Director | |
Contact for inquiries: | (Name) | Minoru Nakanishi | (Position) | Senior Managing Director TEL: 06 (6223) 8055 | |
Scheduled date for submission of periodic securities report: | July 26, 2022 | ||||
Scheduled date for start of dividend payment: | - | ||||
Supplementary explanatory materials created for accounts? Yes/No: | No | ||||
Accounts briefing meeting held? | Yes/No: | Yes (for analysts) |
(Amounts are rounded down to the nearest million yen)
1. Consolidated results for first two quarters of fiscal year ending December 2022 (from January 1, 2022 to June 30, 2022)
(1) Consolidated operating results
(% figures show the rate of increase (decrease) compared with the same period of the previous year)
Net sales | Operating income | Ordinary income | Profit attributable to | |||||||||||||||||||
owners of parent | ||||||||||||||||||||||
million yen | % | million yen | % | million yen | % | million yen | % | |||||||||||||||
First two quarters of | 40,876 | 63.6 | 5,641 | 120.2 | 5,136 | 165.6 | 3,296 | 137.4 | ||||||||||||||
fiscal year ending Dec. 2022 | ||||||||||||||||||||||
First two quarters of | 24,980 | (54.6) | 2,561 | (75.8) | 1,934 | (80.8) | 1,388 | (80.1) | ||||||||||||||
fiscal year ended Dec. 2021 | ||||||||||||||||||||||
Note: | Comprehensive income | |||||||||||||||||||||
First two quarters of | First two quarters of | |||||||||||||||||||||
fiscal year ending Dec. 2022: 3,090 million yen | [126.9%] fiscal year ended Dec. 2021: | 1,361 million yen | [-79.9%] | |||||||||||||||||||
Basic | Diluted | |||||||||||||||||||||
earnings per share | earnings per share | |||||||||||||||||||||
yen | yen | |||||||||||||||||||||
First two quarters of fiscal | 34.52 | 34.46 | ||||||||||||||||||||
year ending Dec. 2022 | ||||||||||||||||||||||
First two quarters of fiscal | 17.07 | 17.02 | ||||||||||||||||||||
year ended Dec. 2021 | ||||||||||||||||||||||
(Note) | "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29; March 31, 2020), etc. have been applied | |||||||||||||||||||||
from the beginning of the first quarter of the fiscal year ending December 2022, and the figures for the first two | ||||||||||||||||||||||
quarters of the fiscal year ending December 2022 are the figures after applying the accounting standard, etc. | ||||||||||||||||||||||
(2) | Consolidated financial position | |||||||||||||||||||||
Total assets | Net assets | Equity ratio | Book value per share | |||||||||||||||||||
million yen | million yen | % | yen | |||||||||||||||||||
First two quarters of | 275,945 | 62,059 | 22.6 | 651.54 | ||||||||||||||||||
fiscal year ending Dec. 2022 | ||||||||||||||||||||||
Fiscal year ended Dec. 2021 | 252,771 | 62,628 | 24.8 | 657.50 | ||||||||||||||||||
Reference: Equity | ||||||||||||||||||||||
First two quarters of | ||||||||||||||||||||||
fiscal year ending Dec. 2022: | 62,226 million yen | Fiscal year ended Dec. 2021: | 62,780 million yen | |||||||||||||||||||
(Note) | "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29; March 31, 2020), etc. have been applied | |||||||||||||||||||||
from the beginning of the first quarter of the fiscal year ending December 2022, and the figures for the first two | ||||||||||||||||||||||
quarters of the fiscal year ending December 2022 are the figures after applying the accounting standard, etc. | ||||||||||||||||||||||
2. Dividends | ||||||||||||||||||||||
Annual dividend | ||||||||||||||||||||||
End of first | End of second | End of third | Year-end | Total | ||||||||||||||||||
quarter | quarter | quarter | ||||||||||||||||||||
yen | yen | yen | yen | yen | ||||||||||||||||||
Fiscal year ended Dec. 2021 | - | 0.00 | - | 38.00 | 38.00 | |||||||||||||||||
Fiscal year ending Dec. 2022 | - | 0.00 | ||||||||||||||||||||
Fiscal year ending Dec. 2022 (Forecast) | - | 38.00 | 38.00 | |||||||||||||||||||
(Note) Revisions from the latest dividends forecast: None
3. Consolidated earnings forecast for fiscal year ending December 2022 (from January 1, 2022 to December 31, 2022)
(% figures for the full fiscal year show the rate of increase (decrease) compared with the previous period)
Net sales | Operating income | Ordinary income | Profit attributable to | Basic earnings | |||||
owners of parent | per share | ||||||||
million yen | % | million yen | % | million yen | % | million yen | % | yen | |
Full fiscal year | 100,000 | 26.6 | 14,000 | 34.9 | 12,200 | 34.1 | 8,300 | 39.2 | 86.92 |
(Note) Revisions from the latest earnings forecast: None
* Explanatory notes
- Changes in significant subsidiaries during the first two quarters
(Changes in specified subsidiaries resulting in change in scope of consolidation): | None | |
Newly included: | - companies (Company name) - | |
Excluded: | - companies (Company name) - |
- Application of accounting treatments specific to preparation of quarterly consolidated financial statements: None
- Changes in accounting policies, changes in accounting estimates, and restatement
1) | Changes in accounting policies due to amendment of accounting standards, etc.: | Yes |
2) | Changes in accounting policies other than 1): | None |
3) | Changes in accounting estimates: | None |
4) | Restatement: | None |
(Note) For details, please see "Attachment; 2. Quarterly Consolidated Financial Statements and Key Notes; (4) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies)" on page 20.
(4) Number of shares issued and outstanding (common shares) | |||||
1) | Number of shares issued and | First two quarters of | 98,580,887 | Fiscal year ended | 98,580,887 |
outstanding (including treasury shares) | fiscal year ending | ||||
shares | Dec. 2021 | shares | |||
at end of period | Dec. 2022 | ||||
2) | Number of treasury shares at end of | First two quarters of | 3,074,800 | Fiscal year ended | 3,096,900 |
fiscal year ending | |||||
period | shares | Dec. 2021 | shares | ||
Dec. 2022 | |||||
3) | Average number of shares during | First two quarters of | 95,494,503 | First two quarters of | 81,333,676 |
period | fiscal year ending | shares | fiscal year ended | shares | |
Dec. 2022 | Dec. 2021 |
Note: The number of treasury shares at end of period includes shares of ES-CON JAPAN held in a board benefit trust for executives and a share-based payment benefits-type ESOP trust (first two quarters of fiscal year ending December 2022: 851,000 shares in the board benefit trust for executives and 214,100 shares in the share-based payment benefits-type ESOP trust). In the calculation of the average number of shares during period (cumulative total of first two quarters), the treasury shares to be subtracted in that calculation includes shares of ES-CON JAPAN held in the board benefit trust for executives and the share-based payment benefits- type ESOP trust (first two quarters of fiscal year ending December 2022: 1,073,860 shares).
- This quarterly summary of accounts is not subject to quarterly review of certified public accountant or audit corporation.
-
Explanation regarding appropriate use of earnings forecasts, and other notes
The earnings outlook and other forward-looking statements contained in this document are based on information currently available to and certain assumptions that are thought to be reasonable by ES-CON JAPAN. Accordingly, actual business performance and other results may differ materially due to various reasons. For the conditions forming the assumptions on which earnings forecasts are based and explanatory notes for use of earnings forecasts, etc., please see "Attachment; 1. Qualitative Information on Quarterly Results; (4) Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information" on page 14.
○ Contents of Attachment | ||
(3) | Explanation of Financial Position .............................................................................................................................. | 13 |
(4) | Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information ....................................... | 14 |
2. Quarterly Consolidated Financial Statements and Key Notes ........................................................................................ | 15 | |
(1) | Quarterly Consolidated Balance Sheet ..................................................................................................................... | 15 |
(2) | Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income .. | 17 |
(Quarterly Consolidated Statement of Income) ............................................................................................................. | 17 | |
(Quarterly Consolidated Statement of Comprehensive Income) ................................................................................... | 18 | |
(3) | Quarterly Consolidated Statement of Cash Flows .................................................................................................... | 19 |
(4) | Notes to Quarterly Consolidated Financial Statements............................................................................................. | 20 |
(Notes on Going Concern Assumption) ......................................................................................................................... | 20 | |
(Notes on Substantial Changes in the Amount of Shareholders' Equity) ...................................................................... | 20 | |
(Changes in Accounting Policies) .................................................................................................................................. | 20 | |
(Additional Information) ................................................................................................................................................. | 21 | |
(Segment Information, Etc.) .......................................................................................................................................... | 23 | |
(Significant Subsequent Events) ................................................................................................................................... | 24 | |
3. Other ............................................................................................................................................................................... | 25 | |
Status of Contracts and Sales......................................................................................................................................... | 25 |
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Attachment
1. Qualitative Information on Quarterly Results
-
Business Risks
In the first two quarters of the fiscal year ending December 2022, business risks that newly arose or changed from those described in "2. Business Conditions; 2. Business Risks" in the previous year's securities report are as follows: Statements concerning future matters are based on the judgments of the Group (ES-CON JAPAN and its consolidated subsidiaries) as of the end of the current quarterly consolidated accounting period.
The following item numbers attached to each heading correspond to those described in "2. Business Conditions;
2. Business Risks" in the previous year's securities report. Regarding "(8) Legal Violation Risks," they arose after the securities report for the previous fiscal year was submitted. - Legal Restrictions, Etc.
In addition to the restrictions of the Companies Act and the Financial Instruments and Exchange Act, the real estate industry to which the ES-CON Japan Group belongs is subject to the restrictions of the National Land Use Planning Act, Real Estate Brokerage Act, Building Standards Act, Act on Maintenance of Sanitation in Buildings, Act on Specified Joint Real Estate Ventures, Act on Securitization of Assets, Trust Business Act, and Money Lending Business Act, etc.
In addition, the ES-CON Japan Group conducts real estate sales and related business as a real estate company licensed under the Real Estate Brokerage Act and the Act on Advancement of Proper Condominium Management, etc., but the abolition of these or creation of new legal restrictions could affect the Group's business performance.
In January 2022, ES-CON JAPAN acquired shares of FUEL Inc. (hereinafter "FUEL"), which manages online funds and provides systems to specified joint real estate venture-type crowdfunding businesses, to make it a subsidiary. The details of approval and licenses obtained by FUEL are as follows.
- Legal Restrictions, Etc.
(FUEL Inc.)
Name of approval, | Governing | Details of approval, | Legal violation requirements and | |
Term of validity | main reasons for revocation of | |||
license, etc. | agency, etc. | license, etc. | ||
approval and license | ||||
Financial | Financial | Director-General | Obtained on January | In case of registration by |
Instruments | Services | of the Kanto | 26, 2009. | unauthorized means, capital |
Business | Agency | Local Finance | No provision for the | shortage, or potential insolvency |
(Type 2 Financial | Bureau | period of validity | in the context of business or asset | |
Instruments | (Financial | conditions, the registration may be | ||
Business) | Instruments | revoked (Article 52 of the | ||
Business) | Financial Instruments and | |||
No. 2123 | Exchange Act). |
- Personal Information Leakage and Information System Risks
As a business operator handling personal information under the Act on the Protection of Personal Information, the Group receives personal information of customers and clients in each of its businesses when developing in a multidimensional way. This includes customers who purchase or consider purchasing condominiums or detached houses through the condominium sales business or reside in rental apartments as well as customers who purchase or consider purchasing permanent use rights in the columbarium business or are looking for jobs in the employment placement business. The Group has set rules for the handling of personal information (basic policy, regulations, and manual) to establish a system and keeps files containing personal information under strict safekeeping with monitoring software and restricts access authority on the system in a bid to enhance the system as a whole and also manage information other than personal information.
ES-CON JAPAN outsources part of the sale of condominiums to sales companies and these companies are required to use part of ES-CON JAPAN's management system to prevent customer information from being leaked to third parties and handle customer information within the scope to ensure confidentiality.
As malware (Emotet)(*1) infection spreads rapidly in Japan, the Group's information system has been exposed to cybersecurity threats, including cyberattacks or fraudulent access, in recent months. To minimize system risk, ES-CON JAPAN has revamped its security environment, including enhancing employee training and conducting security training programs periodically. - 2 -
Should personal information be leaked due to unforeseen circumstances, however, the Group's sales could fall due to its ruined credibility or compensation for damages may arise, and such may affect the Group's business performance.
*1 Malware is a general term for malicious software, combining these two words. Emotet is malware that downloads a variety of malicious software in addition to stealing information. It is found to be attached to suspicious emails by malicious people, which accelerates the spread of infection.
-
Climate Change Risks
A society where there is increasing climate damage is assumed for the future, and the increasing risk on business continuity caused by climate change may have an impact on ES-CON JAPAN's management results and financial position.
In June 2022, the ES-CON JAPAN endorsed the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) which assess the financial impact of risks and opportunities from climate change on management and encourage companies to issue relevant disclosures. We disclose information on the impact of climate change on our business based on the TCFD framework.
For details, please see (2) Explanation of Operating Results; 8) Endorsement of TCFD recommendations and information disclosure. - Legal Violation Risks
Should an employee or officer of the Group or ES-CON JAPAN violate any relevant laws as the Group conducts business (including the Companies Act, Real Estate Brokerage Act, Construction Industry Act, Licensed Architect Act, Financial Instruments and Exchange Act, Act on the Protection of Personal Information, Money Lending Business Act, Act on Advancement of Proper Condominium Management, Labor Standards Act, and Employment Security Act), administrative discipline may be imposed by the authorities concerned. In this case, due to the Group's ruined social credibility and compensation for damages, its financial position, business performance, and reputation in the market may be affected.
-
Climate Change Risks
- Explanation of Operating Results
In the first two quarters of the fiscal year ending December 2022, the number of COVID-19 cases surged but subsided after March 2022 and normalization of economic and social activities and economic recovery progressed due to the easing of movement restrictions, etc.
In the real estate industry to which the ES-CON JAPAN Group belongs, the real estate market remained robust and investors' appetite for investment remained strong both domestically and abroad with housing demand being pushed up by work-style reform and new lifestyles such as working from home, partly due to the supportive effect of the continuation of monetary easing measures.
On the other hand, regarding prospects, downside risks to the economy have increased as prices of materials are surging on the back of the deteriorating situation in Ukraine, inflation is accelerating due to the yen's sharp depreciation, many countries, including the U.S., have switched over to a tight monetary policy, and an upward trend for interest rates is gaining force. The future trend of the real estate market remains uncertain and we need to develop the real estate business prudently.
Amid these highly unpredictable business circumstances, ES-CON JAPAN strives to post a record profit this year, the second year of the fourth medium-term management plan "IDEAL to REAL 2023" (the 3-year period from fiscal year ended December 2021 to fiscal year ending December 2023) formulated in February 2021, with the basic policy: "Transformation and Rapid Progress."
Regarding the Group's business performance in the first two quarters of fiscal year ending December 2022, sales of condominiums in the real estate sales business grew steadily and both sales and profit surpassed the initial estimates.
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ES-CON Japan Ltd. published this content on 26 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 July 2022 06:18:12 UTC.