Consolidated Financial Statements
for the Second Quarter of the Fiscal Year Ending March 31, 2024 [J-GAAP]
November 7, 2023

NIPPON KANZAI Holdings Co., Ltd.
Listed exchange:
Tokyo Stock Exchange, Prime Market
Securities code:
9347
URL: https://www.nkanzaihd.co.jp/en/
Representative:
Shintaro Fukuda, President and Representative Director
Contact:
Shigeki Okamoto, Senior Executive Officer and Head of Finance & Accounting Dept.
Telephone:+81-3-5299-0863
Filing date of quarterly report:
November 14, 2023
Date to start dividends distribution:
December 4, 2023
Supplementary materials for quarterly results: Yes
Quarterly results briefing meeting held:
Yes (for institutional investors and analysts)*Amounts below one million yen have been rounded down.

1. Consolidated results for the second quarter ended September 30, 2023 (April 1, 2023, to September 30, 2023)(1) Consolidated business results(Percentage figures indicate the rate of change from the same period of the previous fiscal year.)
Net Sales
Operating Income
Ordinary Income%

Millions of yen%

Six months ended September 30, 2023
57,003―
3,997―
Six months ended September 30, 2022――――
(Note) Comprehensive income:Six months ended September 30, 2023: ¥3,822 million [ ―%]Six months ended September 30, 2022: ¥ ― million [ ―%]Profit Attributable toProfit per ShareOwners of Parent

Millions of yen

4,482
―

―
―

Millions of yen

3,045
―

Six months ended September 30, 2023
Six months ended September 30, 2022%

Millions of yen%

Diluted Profit per Share

Yen

―
―

Yen

81.47
―

―
―

(Note) Since the Company was established on April 3, 2023, through a sole share transfer, there are no results for the same period of
the previous fiscal year.

(2) Consolidated financial position

Total Assets

Net Assets

Millions of yen

As of September 30, 2023
As of March 31, 2023
(Reference) Equity:

Equity Ratio

Millions of yen

89,540―%68,181―

74.9―

As of September 30, 2023: ¥67,088 million
As of March 31, 2023:¥ ― million(Note) Since the Company was established on April 3, 2023, through a sole share transfer, there are no results for the previous fiscal year.

2. Dividends
First
Quarter-end

SecondQuarter-end

Annual dividends
Third
Quarter-end

―
―

―

―

Fiscal year ended March 31, 2023
Fiscal year ending March 31, 2024
Fiscal year ending March 31, 2024
(forecast)

Yen

Yen

27.00

Yen

Year-end

―

―

Total
Yen

―

27.00

Yen

54.00

(Note) 1. Revisions to the most recently announced forecast of cash dividends in the current quarter: None
2. Since the Company was established on April 3, 2023, through a sole share transfer, there are no results for the previous fiscal year.

3. Consolidated business forecasts for the fiscal year ending March 31, 2024 (April 1, 2023, to March 31, 2024)(Percentage figures indicate the rate of change from the previous fiscal year.)
Profit Attributable toProfitOperating Income
Ordinary Income
Owners of Parent
per Share

Net Sales
Full year

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

118,600

―

8,600

―

9,100

―

6,000

―

160.50(Note) 1. Revisions to the most recently announced consolidated business forecasts in the current quarter: None
2. Since the Company was established on April 3, 2023, through a sole share transfer, there is no rate of change from the previous
fiscal year and that from the same period of the previous fiscal year.

* Notes(1) Changes of significant subsidiaries during the period (changes in specific subsidiaries associated with changes
in scope of consolidation): Yes(Changes in specific subsidiaries associated with changes in scope of consolidation)
Newly included: 1 company (Company name) Hawaiiana Holdings Incorporated(2) Adoption of specific accounting methods for preparation of the quarterly consolidated financial statements:
None(3) Changes in accounting policies, accounting estimates and restatement of revisions
1) Changes in accounting policies due to revisions of accounting standards, etc.:
None2) Changes in accounting policies other than 1) above:None3) Changes in accounting estimates:
None4) Restatement of revisions:
None(4) Number of shares issued and outstanding (common stock)1) Number of shares issued and outstanding (including treasury stock)2) Number of treasury stock3) Average number of shares issued and outstanding
1)

As of September 30, 2023

41,180,306 shares

As of March 31, 2023

― shares2)

As of September 30, 2023

3,797,286 shares

As of March 31, 2023

― shares3)

Six months ended
September 30, 2023

37,383,074 shares

Six months ended
September 30, 2022

― shares(Note) Since the Company was established on April 3, 2023, through a sole share transfer, there are no results for the previous fiscal
year and the same period of the previous fiscal year.

* This quarterly financial report is not included in the quarterly review by certified public accountants or audit
corporations* Explanation regarding the appropriate use of business forecasts and other notes(Notes to forward-looking statements)
The business forecasts reported herein were prepared based on information the Company had in its possession as of thetime this report was prepared and on certain assumptions judged to be reasonable. Actual results may differ significantly
from forecasts due to various factors. Please refer to the disclaimers provided under “1. Qualitative information on
financial statements; (3) Explanation regarding information on future forecasts including consolidated business forecasts,etc.” on page 3 of the Attached Document of this quarterly financial report regarding assumptions upon which forecasts
are based and the use of forecasts.
(Results for the previous fiscal year and the same period of the previous fiscal year)
Since the Company was established on April 3, 2023, through a sole share transfer of NIPPON KANZAI Co., Ltd., thecurrent fiscal year will be its first fiscal year. Therefore, there are no results for the previous fiscal year and the same
period of the previous fiscal year.
(How to obtain supplementary materials on financial results)
The Company plans to hold a financial results briefing for institutional investors and analysts on Friday, November 24,
2023. The presentation materials for the financial results briefing will be posted on the Company’s website after thebriefing is over.

NIPPON KANZAI Holdings Co., Ltd. (9347) Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

Table of Contents for the Attached Document
1. Qualitative information on financial statements .........................................................................................................2(1) Explanation regarding business results ....................................................................................................................2(2) Explanation regarding financial position .................................................................................................................3(3) Explanation regarding information on future forecasts including consolidated business forecasts, etc. .................3
2. Quarterly consolidated financial statements and key notes ........................................................................................4(1) Quarterly consolidated balance sheets .....................................................................................................................4(2) Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income .......6
Quarterly consolidated statements of income..........................................................................................................6
Quarterly consolidated statements of comprehensive income.................................................................................7(3) Quarterly consolidated statements of cash flows .....................................................................................................8(4) Notes on quarterly consolidated financial statements ............................................................................................10(Notes on the going concern assumption) .............................................................................................................10(Notes on significant changes in the amount of shareholders’ equity) ..................................................................10(Segment information, etc.) ...................................................................................................................................10

1

NIPPON KANZAI Holdings Co., Ltd. (9347) Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

1. Qualitative information on financial statements

The Company was established on April 3, 2023, through a sole share transfer of NIPPON KANZAI Co., Ltd. As for thescope of consolidation, there is no substantial change from the scope of consolidation of NIPPON KANZAI Co., Ltd.
In addition, the quarterly consolidated financial statements for the first half of the fiscal year ending March 31, 2024,
are prepared by succeeding the quarterly consolidated financial statements of NIPPON KANZAI Co., Ltd., which has
become a wholly owned subsidiary through the sole share transfer.

(1) Explanation regarding business results
During the first half of the fiscal year ending March 31, 2024, the Japanese economy saw normalization due to the liftingof restrictions imposed from the COVID-19 pandemic and the reclassification of COVID-19 to category Class 5, but was
faced with concerns of stagnation in economic activity due to the impact of surging raw material prices caused by the
prolonged situation in Ukraine and currency exchange fluctuation risks. These factors still continue to cast uncertainty
over the future.
The real estate services industry saw vacancy rates for office buildings and retail facilities in urban areas remain highas the impact of various work arrangements including remote working and satellite offices started to take hold. In addition,with surging raw material prices and rising labor costs leading to client companies becoming more conscious of reducing
costs, a severe business environment is expected to continue going forward.
In such a business environment, the Nippon Kanzai Group (hereinafter the “Group”) has continued to pursue “optimalbuilding management” through its advanced technologies and responsiveness in order to continuously provide highquality services that meet customer needs, endeavoring to enhance the asset value of properties under management.
The Group also endeavors to further strengthen and improve Building Management and Operations, its core business,while proactively implementing operations in peripheral fields such as private finance initiatives (PFI) and public facility
management projects.
In the first half of the fiscal year ending March 31, 2024, successful procurement of new management contracts andrenewing contracts resulted in net sales of 57,003 million yen, operating income of 3,997 million yen, ordinary incomeof 4,482 million yen, and profit attributable to owners of parent of 3,045 million yen.
The following are business results by segment.
Segment income has been adjusted to operating income described in quarterly consolidated statements of income.
Building Management and Operations
With regard to Building Management and Operations, the Group’s core business that focuses on building management
and security services, smoothly winning new management contracts and renewing contracts resulted in net sales for thesegment for the first half of the fiscal year ending March 31, 2024, of 37,494 million yen and segment income of 3,333
million yen.
Residential Management and Operations
With regard to Residential Management and Operations, which mainly consists of managing rental apartment buildings
and condominiums as well as public housing, robust renewing of existing management contracts and strong constructionrelated business orders resulted in net sales for the segment for the first half of the fiscal year ending March 31, 2024, of
9,571 million yen and segment income of 738 million yen.
Environmental Facilities Management
With regard to Environmental Facilities Management, which mainly consists of managing water treatment, sewage
disposal, and other public facilities related to the overall living environment, robust renewing of existing management
contracts and strong construction-related business orders resulted in net sales for the segment for the first half of the
fiscal year ending March 31, 2024, of 6,964 million yen and segment income of 1,016 million yen.
Real Estate Fund Management
With regard to Real Estate Fund Management, which mainly consists of asset management (i.e., arrangement and asset
management of real estate funds) and handling of investments in silent partnership, smoothly implementing facility
management and operation business resulted in net sales for the segment for the first half of the fiscal year ending March
31, 2024, of 1,682 million yen and segment income of 322 million yen.
Other Businesses
In Other Businesses, which consist mainly of event planning and management, design and payroll accounting services,smoothly winning event-related business contracts resulted in net sales for the segment for the first half of the fiscal year
ending March 31, 2024, of 1,449 million yen and segment income of 331 million yen.

2

NIPPON KANZAI Holdings Co., Ltd. (9347) Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

(2) Explanation regarding financial position(Analysis of financial position)
Total assets at the end of the second quarter of the fiscal year ending March 31, 2024, amounted to 89,540 million yen.
The major breakdown is 50,941 million yen of current assets including 29,721 million yen of cash and deposits, and38,599 million yen of non-current assets including 20,257 million yen of investment securities.
Liabilities amounted to 21,359 million yen. The major breakdown is 15,564 million yen of current liabilities including
5,183 million yen of notes and accounts payable-trade, and 5,794 million yen of non-current liabilities including 2,106
million yen of long-term guarantee deposited.
Net assets amounted to 68,181 million yen. The major breakdown is 64,767 million yen of shareholders’ equity
including 60,756 million yen of retained earnings, 2,320 million yen of accumulated other comprehensive income
including 2,711 million yen of valuation difference on available-for-sale securities, and 1,092 million yen of noncontrolling interests. The equity ratio was 74.9%.
(Analysis of cash flows)
Cash and cash equivalents (hereinafter “cash”) at the end of the second quarter of the fiscal year ending March 31, 2024,
was 29,376 million yen.
The status and main factors of cash flows for the first half of the fiscal year ending March 31, 2024, were as follows:[Cash flows from operating activities]
In the first half of the fiscal year ending March 31, 2024, there was net cash provided by operating activities of 1,493
million yen.
This was mainly due to profit before income taxes (cash inflow of 4,572 million yen) and income taxes paid (cashoutflow of 2,477 million yen year on year).
[Cash flows from investing activities]
In the first half of the fiscal year ending March 31, 2024, there was net cash used in investing activities of 2,789 million
yen.
This was mainly due to purchase of investment securities (cash outflow of 1,170 million yen) and purchase of sharesof subsidiaries resulting in change in scope of consolidation (cash outflow of 517 million yen).
[Cash flows from financing activities]
In the first half of the fiscal year ending March 31, 2024, there was net cash used in financing activities of 1,392 million
yen.
This was mainly due to dividends paid (cash outflow of 1,108 million).

(3) Explanation regarding information on future forecasts including consolidated business forecasts, etc.
The Group remains cautious of the future business environment, which continues to be unpredictable.
The Group’s business performance has been generally in line with the forecasts announced on May 9, 2023, and there
are no changes to the full-year business forecasts.

3

NIPPON KANZAI Holdings Co., Ltd. (9347) Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

2. Quarterly consolidated financial statements and key notes(1) Quarterly consolidated balance sheets

ASSETS
Current assets
Cash and deposits
Notes and accounts receivable－trade and contract assets
Investments in silent partnership for business purposes
Real estate for sale
Supplies
Income taxes receivable
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net
Machinery, equipment and vehicles, net
Tools, furniture and fixtures, net
Land
Leased assets, net
Construction in progress
Total property, plant and equipment
Intangible assets
SoftwareLeased assets
Goodwill
Telephone subscription right
Software in progress
Total intangible assets
Investments and other assets
Investment securities
Long-term loans receivable
Deferred tax assets
Long-term prepaid expenses
Net defined benefit asset
Lease and guarantee deposits
Membership
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
TOTAL ASSETS(Millions of yen)
Second quarter ended
September 30, 2023
(As of September 30, 2023)

29,721
15,500
59
2,115
304
267
2,979
(6)
50,941

3,912
33
667
1,211
852
23
6,700
363
6
3,436
48
157
4,011
20,257
860
471
16
841
3,377
333
1,799
(71)
27,88738,59989,540*English translation of some items has been changed to correspond with EDINET taxonomy published by FSA.

4

NIPPON KANZAI Holdings Co., Ltd. (9347) Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

LIABILITIESCurrent liabilities
Notes and accounts payable－trade
Current portion of long-term loans payable
Current portion of long-term non-recourse loans payable
Lease obligations
Accrued expenses
Income taxes payable
Accrued consumption taxes
Contract liabilities
Deposits received
Provision for bonuses
Other
Total current liabilities
Non-current liabilities
Long-term non-recourse loans payable
Lease obligations
Deferred tax liabilities
Provision for retirement benefits for directors (and other officers)
Net defined benefit liability
Long-term guarantee deposited
Asset retirement obligations
Liabilities from application of equity method
Other
Total non-current liabilities
TOTAL LIABILITIESNET ASSETS
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
TOTAL NET ASSETSTOTAL LIABILITIES AND NET ASSETS(Millions of yen)
Second quarter ended
September 30, 2023
(As of September 30, 2023)

5,183
187
456
205
3,199
931
1,048
1,783
1,274
844
449
15,564
509
691
1,242
1
190
2,106
449
1
600
5,794
21,3593,000
11,33960,756(10,328)
64,767
2,711
(167)
(223)
2,320
1,092
68,18189,540*English translation of some items has been changed to correspond with EDINET taxonomy published by FSA.

5

NIPPON KANZAI Holdings Co., Ltd. (9347) Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

(2) Quarterly consolidated statements of income and quarterly consolidated statements of comprehensive income
Quarterly consolidated statements of income

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Selling expenses
Personnel expenses
Provision for bonuses
Provision for retirement benefits for directors (and other officers)
Retirement benefit expenses
Transportation and communication expenses
Supplies expenses
Rent expenses
Insurance expenses
Depreciation
Taxes and duesEnterprise tax
Provision of allowance for doubtful accounts
Amortization of goodwill
Other
Total selling, general and administrative expenses
Operating income
Non-operating income
Interest and dividend income
Rent income
Share of profit of entities accounted for using equity method
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Rent expenses
Loss on sales and retirement of non-current assets
Loss on valuation of membership
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on step acquisitions
Total extraordinary income
Profit before income taxes
Income taxes－current
Income taxes－deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent(Millions of yen)Six months ended
September 30, 2023
(April 1, 2023, toSeptember 30, 2023)

57,00344,34012,663

406
4,677
402
1
154
574
263
655
169
253
101
187
16
103
696
8,665
3,997
137
23
6
381
49
599
18
28
21
23
22
114
4,482
89
89
4,572
1,397
79
1,476
3,095
50
3,045

*English translation of some items has been changed to correspond with EDINET taxonomy published by FSA.

6

NIPPON KANZAI Holdings Co., Ltd. (9347) Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

Quarterly consolidated statements of comprehensive income

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Share of other comprehensive income of entities accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests(Millions of yen)Six months ended
September 30, 2023
(April 1, 2023, toSeptember 30, 2023)

3,095

689
(108)
41
104
726
3,822
3,756
65

*English translation of some items has been changed to correspond with EDINET taxonomy published by FSA.

7

NIPPON KANZAI Holdings Co., Ltd. (9347) Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

(3) Quarterly consolidated statements of cash flows

Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for retirement benefits for directors (and other officers)
Increase (decrease) in net defined benefit (asset) liability
Increase (decrease) in allowance for doubtful accounts
Interest and dividend income
Interest expenses
Foreign exchange losses (gains)Share of loss (profit) of entities accounted for using equity method
Loss (gain) on step acquisitions
Loss (gain) on sales and retirement of non-current assets
Loss on valuation of membership
Decrease (increase) in notes and accounts receivable－trade
Decrease (increase) in inventories
Decrease (increase) in other assets
Increase (decrease) in notes and accounts payable－trade
Increase (decrease) in accrued consumption taxes
Increase (decrease) in other liabilities
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment and intangible assets
Proceeds from sales of property, plant and equipment and intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Proceeds from redemption of investment securities
Purchase of shares of subsidiaries resulting in change in scope of consolidation
Collection of loans receivable
Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Guarantee deposits received
Refund of guarantee deposits received
Other, net
Net cash provided by (used in) investing activities(Millions of yen)Six months ended
September 30, 2023
(April 1, 2023, toSeptember 30, 2023)

4,572
381
103
32
1
(61)
16
(137)
18
(366)
(6)
(89)
21
23
804
(72)
(780)
(1,994)
(204)
1,582
(14)
3,830
158
(18)
(2,477)
1,493
(30)
30
(223)
0
(1,170)
435
100
(517)
16
(427)
582
11
(161)
(1,433)(2,789)*English translation of some items has been changed to correspond with EDINET taxonomy published by FSA.

8

NIPPON KANZAI Holdings Co., Ltd. (9347) Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

Cash flows from financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Repayments of long-term loans payable
Repayments of long-term non-recourse loans payable
Repayments of lease obligations
Purchase of treasury shares
Cash dividends paid
Dividends paid to non-controlling interests
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period(Millions of yen)Six months ended
September 30, 2023
(April 1, 2023, toSeptember 30, 2023)

3,750(3,750)
(187)
(3)
(91)
(0)
(1,009)(99)(1,392)22(2,665)32,041
29,376*English translation of some items has been changed to correspond with EDINET taxonomy published by FSA.

9

NIPPON KANZAI Holdings Co., Ltd. (9347) Consolidated Financial Statements for the Second Quarter of the Fiscal Year Ending March 31, 2024

(4) Notes on quarterly consolidated financial statements(Notes on the going concern assumption)
Not applicable.
(Notes on significant changes in the amount of shareholders’ equity)
Not applicable.
(Segment information, etc.)
Six months ended September 30, 2023 (April 1, 2023, to September 30, 2023)
Information on net sales, and income or losses for each reportable segment(Millions of yen)

Reportable segment

Amountrecorded on
Adjustments
quarterly(Note 1)
consolidated
statements ofincome (Note 2)

Building
Management
andOperations

Residential
Management
andOperations

37,494

9,571

6,964

1,682

1,290

57,003―57,003

―

―

―

―

158

158

(158)

―

37,494

9,571

6,964

1,682

1,449

57,161(158)

57,003

3,333

738

1,016

322

331

5,743

(1,745)

3,997

Environmental Real Estate
Facilities
Fund
Management Management

Other
Businesses

Total

Net sales
Net sales toexternal customers
Inter-segment net
sales and transfer
Total
Segment income(Note) 1. Adjustments of -1,745 million yen for segment income are elimination of inter-segment transactions and unallocated generaladministrative expenses.
2. Segment income has been adjusted to operating income described in quarterly consolidated statements of income.

10