July 13, 2018

Flash Report (Consolidated Basis)
Results for the first half ended May 31, 2018
(Based on Japanese GAAP)

Company name:Samty Co., Ltd.

Stock Listings:

Tokyo Stock Exchange

Stock Code:

3244

URL:

https://www.samty.co.jp/en/index.html

Representative
Title:

Representative Director and President

Name: Kazushi EguchiContact Person
Title:

Director & General Manager of Business Administration Division

Name: Hiroaki Matsui

Telephone: +81-6-6838-3616

Quarterly report filing date (Planned):

July 13, 2018

Start of dividend payments (Planned):―

Quarterly supplemental explanatory material prepared:No

Quarterly results briefing held:

Yes (for institutional investors and analysts)(Figures less than ¥1 million have been omitted.)

1. Consolidated Results for the first half of FY11/18 (December 1, 2017 to May 31, 2018)(1) Consolidated Operating results
Six months ended May 31

Percentages indicate year-on-year increase/ (decrease).

Net sales

Operating income

Profit attributable toowners of parent

Ordinary income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen

%

2018

46,317

22.9

9,112

31.5

7,908

29.3

5,655

31.3

2017

37,692

76.9

6,928

104.1

6,115

157.7

4,307

147.2

(Note) Comprehensive Income: Six months ended May 31, 2018: ¥5,893 million, (35.6%)
Six months ended May 31, 2017: ¥4,347 million, (145.2%)

Net income per share

Net Income per shareafter adjustment forresidual shares

Yen

Yen

2018

224.24216.95

2017

181.60165.90(2) Consolidated Financial condition
Total assets

Net assets

Equity ratio

Millions of yen

Millions of yen%

May 31, 2018

154,859

44,63028.3

November 30, 2017

166,449

39,36023.4(Reference) Total shareholders’ equity: May 31, 2018: ¥43,797 million, November 30, 2017: ¥39,017 million

2. Dividends
Years ended/ending November 30
Dividends per share
February 28

May 31

August 31

Year-end

Total

Yen

Yen

Yen

Yen

Yen

2017

―

0.00

2018

―

0.00

2018
(Forecast)(Note)

―

47.00

47.00

―

52.00

52.00

Revision of dividends forecast for this period: None

3. Forecasts for Fiscal Year Ending November 30, 2018
Percentages indicate year-on-year increase/ (decrease).
Net sales
Millions of yen

Fiscal year

64,000Operating income%

5.8

Profit attributable toowners of parent
Millions of yen

Fiscal year
(Note)

6,500

Millions of yen

11,000Net income per share%

14.8

Revision of results forecast for this period: None

Yen

258.10Ordinary income%

8.6

Millions of yen

8,900

%

5.2

Notes(1) Significant changes in subsidiaries during the subject fiscal period: None
(Changes in specified subsidiaries related to a change in the scope of consolidation)
Additions: None

Deletions: None

(2) Application of special accounting practices in the preparation of the consolidated financial statements:
None(3) Changes in accounting policies, changes in accounting estimates, restatements
1) Changes in accounting policies due to revision of accounting standards: None
2) Changes in accounting policies other than 1) above: None
3) Changes in accounting estimates: None
4) Restatements: None

(4) Number of shares issued and outstanding (common share)
1) Number of shares issued andoutstanding (including treasury
stock)

Six months ended
May 31, 201827,080,618
sharesYear ended
November 30, 2017

26,989,518
shares2) Number of treasury stock

Six months ended
May 31, 2018

1,805,959
sharesYear ended
November 30, 2017

1,805,959
shares3) Average number of shares
outstanding for each period(cumulative term)

Six months ended
May 31, 201825,219,539
sharesSix months ended
May 31, 2017

23,719,977
shares* Quarterly financial statements are not subject to review by certified public accountants or audit firms.

* Explanation regarding the appropriate use of results forecasts, and other items of note
 Results forecasts and other forward-looking statements contained in this report are based on information available to
the Company at the time of disclosure, and certain assumptions the Company considers reasonable. Actual results
may vary considerably due to a variety of factors. For the assumptions underlying results forecasts and precautions
on use of results forecasts, see Page 5 of the accompanying material “1. Qualitative Information on Consolidated
Results for the First Half of Fiscal 2018; (3) Explanation of Consolidated Results Forecasts and Other Future
Predictions.” The Company plans to hold an explanatory meeting for institutional investors and analysts on July 26, 2018.

Table of Contents for Accompanying Material
1. Qualitative Information on Consolidated Results for the First Half of Fiscal 2018 ............................. 2(1) Explanation of Business Results....................................................................................................... 2(2) Qualitative Information on the Consolidated Financial Position ....................................................... 4(3) Explanation of Consolidated Results Forecasts and Other Future Predictions ............................... 5
2. Consolidated Financial Statements and Main Explanatory Notes....................................................... 6(1) Consolidated Balance Sheets ........................................................................................................... 6(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income .... 8(3) Consolidated Statements of Cash Flows ........................................................................................ 10(4) Notes Relating to Consolidated Financial Statements ................................................................... 12(Note on Assumptions for Going Concern) ...................................................................................... 12(Notes in the Event of Major Changes in Shareholders’ Equity) ...................................................... 12(Segment Information) ...................................................................................................................... 13(Significant Events after the Reporting Period) ................................................................................ 141

1. Qualitative Information on Consolidated Results for the First Half of Fiscal 2018
(1) Explanation of Business Results
During the second quarter cumulative period, the Japanese economy, amid continued expansion in
employment and incomes, continued to recover at a moderate pace, with improvement in corporate
earnings on the back on government economic measures and the Bank of Japan’s easy-money policy.
However, caution remains necessary regarding such factors as the economic outlook in China andother emerging Asian economies, the effects of uncertainty in government policy, the direction ofinternational trade problems, and fluctuations in financial and capital markets.
In the real estate industry, of which the Samty Group is a part, retail store and hotel demand has
risen in response to the continued low interest rate environment and increase in overseas tourists,
while real estate demand remains robust on improved profitability due to low office vacancy rates inmajor cities.
Under such conditions, the Samty Group, in accordance with its “Challenge 40” medium-term
management plan (revised in July 2016), actively pursued business operations based on the three key
strategies of 1) Development of business model centered on Samty Residential Investment
Corporation; 2) Strategic investment in regional metropolitan areas; and 3) Roll-out of hotel
development business.
As a result, in the subject second quarter cumulative period, the Samty Group posted record highresults for revenue and all earnings categories for a second consecutive period. Net sales amounted to¥46,317 million (up 22.9% from the same period of the previous fiscal year), with operating income of¥9,112 million (up 31.5%), ordinary income of ¥7,908 million (up 29.3%), and profit attributable toowners of parent of ¥5,655 million (up 31.3%).

Results by Business Segment
a. Real Estate Business
The Real Estate business comprises the planning, development, and sales of real estate properties,
including the Samty brand S-RESIDENCE series, as well as the revitalization and sales of income
properties and other real estate. We also plan, develop, and sell one-room condominiums forinvestment.
Properties sold as the S-RESIDENCE Series were “S-RESIDENCE Ochanomizu” (Bunkyo-ku,
Tokyo), “S-RESIDENCE Bunkyo Koishikawa” (Bunkyo-ku, Tokyo), “S-RESIDENCE Shinjuku Urban
Style” (Shinjuku-ku, Tokyo), “S-RESIDENCE Shinjuku EAST” (Shinjuku-ku, Tokyo), “S-RESIDENCE
Kiyosumi-shirakawa” (Koto-ku, Tokyo), “S-RESIDENCE Oshiage Park Side” (Sumida-ku, Tokyo),“S-RESIDENCE Kinshicho Park Side” (Sumida-ku, Tokyo), “S-RESIDENCE Nihombashi Hamacho”(Chuo-ku, Tokyo), “S-RESIDENCE Nerima Sakuradai” (Nerima-ku, Tokyo), “S-RESIDENCE Tsurumai”(Naka-ku, Nagoya-shi), and “S-RESIDENCE Shin-Osaka Luna” (Yodogawa-ku, Osaka). As income
apartments, the Company sold a total of 28 properties, including “SAMTY Felice Odoriminami”(Chuo-ku, Sapporo-shi), “SAMTY Residence Mito Chuo” (Mito-shi, Ibaraki), “SAMTY Residence
Shonan Chigasaki” (Chigasaki-shi, Kanagawa), “SAMTY Sanno Residence” (Nakagawa-ku,
Nagoya-shi), “SAMTY Kobe Sta. Minami Dori” (Hyogo-ku, Kobe-shi), “SAMTY Charme Hakata A, B”

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(Hakata-ku, Fukuoka-shi), “SAMTY Kumamoto Keitokuko-mae” (Chuo-ku, Kumamoto-shi), “Prospere
Tsurukawa” (Machida-shi, Tokyo), “S-FORT Kawaguchi Namiki” (Kawaguchi-shi, Saitama), “Dimus
Yokohama Kannai” (Naka-ku, Yokohama-shi) “Greencourt Aratama” (Minami-ku, Nagoya-shi), “ASResidence Tsu City” (Tsu-shi, Mie), “Succeed Takaragaike” (Sakyo-ku, Kyoto-shi), “Charmant de
Minoh” (Minoh-shi, Osaka), “Grand E'terna Oita” (Oita-shi, Oita), and “Studio Square Takasagomachi”(Oita-shi, Oita). As office buildings, the Company sold “SAMTY Uehommachi Building” (Tennoji-ku,
Osaka-shi), and “Nissan Minamihorie Building” (Nishi-ku, Osaka-shi), and as other commercial
facilities, “SAMTY Minatogawakoen Building” (Hyogo-ku, Kobe-shi).
The Company also sold 195 units of condominiums for investment, at “SAMTY Osaka GRAND
EAST” (Higashinari-ku, Osaka-shi), “SAMTY Osaka GRAND EAST II” (Higashinari-ku, Osaka-shi), and“STAGE GRANDE Akihabara” (Taito-ku, Tokyo).
As a result, net sales in the Real Estate Business segment amounted to ¥41,862 million (up 25.4%
from the same period of the previous fiscal year), with operating income of ¥9,608 million (up 34.6%).

b. Property Leasing Business
The Property Leasing business comprises the leasing and management of rental apartments, officebuildings, commercial facilities, hotels, and other properties.
The Samty Group continued its efforts to expand its area of business operations and strengthen
purchasing of income properties. Properties acquired were “SAMTY Residence Funabashi Honcho”(Funabashi-shi, Chiba), “SAMTY Residence Aobadai” (Aoba-ku, Yokohama-shi), “SAMTY Uemachidai
Ryuzouji”(Chuo-ku,

Osaka-shi),“SAMTYEsaka

LIBERTS”(Suita-shi,

Osaka),“SAMTY

Nishijinminami” (Sawara-ku, Hukuoka-shi), “SAMTY Ohashi” (Minami-ku, Hukuoka-shi), “SAMTY
Hakozaki-higashi” (Higashi-ku, Hukuoka-shi), “Orioncourt” (Chuo-ku, Sapporo-shi), “Attract” (Saiwai-ku,
Kawasaki-shi), “La stella” (Handa-shi, Aichi), and “GRANDUKE Shinsakae” (Naka-ku, Nagoya-shi).
The Company also acquired as a hotel asset, “SMART HOTEL kutchan” (Abuta-gun, Hokkaido).
As a result, net sales in the Property Leasing Business segment amounted to ¥3,615 million (up2.4% from the same period of the previous fiscal year), with operating income of ¥1,046 million (up7.0%).

c. Other Business
Other business operations comprise the hotel business, including the holding and operating of“S-PERIA Hotel Hakata” (Hakata-ku, Fukuoka-shi), “S-PERIA Hotel Nagasaki” (Nagasaki-shi,
Nagasaki), and “Center Hotel Tokyo” (Chuo-ku, Tokyo), and the management of “Center Hotel Osaka”(Chuo-ku, Osaka), and “Hotel Sunshine Utsunomiya” (Utsunomiya-shi, Tochigi), as well as acondominium management business and construction / renovation business.
As a result, net sales in the Other Business segment amounted to ¥839 million (up 8.7% from thesame period of the previous fiscal year), with an operating loss of ¥42 million (compared to operating
income of ¥155 million in the same period of the previous fiscal year).

3(2) Qualitative Information on the Consolidated Financial Position
1) Assets, Liabilities, and Net Assets
AssetsTotal assets at the end of the subject second quarter cumulative period amounted to ¥154,859 million,a decrease of ¥11,590 million compared to the end of the previous fiscal year. Of this amount, current
assets decreased ¥5,157 million to ¥93,401 million, and non-current assets decreased ¥6,409 million
to ¥61,387 million. The main factors for the decrease in current assets were declines of ¥9,002 million
in real estate for sale; and ¥3,818 million in real estate for sale under construction; against an
increase of ¥6,953 million in cash and deposits. The main factor for the decrease in non-current
assets was a decline of ¥7,026 million in net property and equipment.

Liabilities
Total liabilities at the end of the subject second quarter cumulative period amounted to ¥110,229
million, a decrease of ¥16,859 million compared to the end of the previous fiscal year. Of this amount,current liabilities decreased ¥12,352 million to ¥26,830 million, and non-current liabilities decreased¥4,507 million to ¥83,398 million. The main factors for the decrease in current liabilities were declinesof ¥8,645 million in short-term borrowings; and ¥3,424 million in current portion of long-term debt. The
main factors for the decrease in non-current liabilities were declines of ¥4,157 million in long-term
debt; and ¥308 million in guarantee deposits.

Net Assets
Total net assets at the end of the subject second quarter cumulative period amounted to ¥44,630
million, an increase of ¥5,269 million compared to the end of the previous fiscal year. This was due
mainly to increases of ¥5,655 million in retained earnings from the recording of profit attributable toowners of parent; and ¥483 million in non-controlling interests due to the sale of subsidiary shares;
against a decrease of ¥1,183 million in retained earnings from dividend payments.

2) Cash Flows
Cash and cash equivalents (“cash”) at the end of the subject second quarter cumulative periodamounted to ¥32,251 million, an increase of ¥7,417 million compared to the end of the previous fiscal
year. This was due mainly to ¥17,700 million in cash provided by operating activities; ¥6,828 million in
cash provided by investing activities; and ¥17,111 million in cash used in financing activities.
The main factors affecting cash flows during the subject second quarter cumulative period are as
follows.

Cash Flow from Operating Activities
Net cash provided by operating activities amounted to ¥17,700 million (compared to ¥17,396 million
in cash provided in the same period of the previous fiscal year). This was due mainly to ¥8,374 million
in Income before income taxes; ¥12,819 million in decrease in inventories; and ¥1,738 million inincome taxes paid.

4Cash Flow from Investing Activities
Net cash provided by investing activities amounted to ¥6,828 million (compared to ¥11,269 million in
cash used in the same period of the previous fiscal year). This was due mainly to ¥6,807 million inpurchase of property, plant and equipment; and ¥13,737 million in proceeds from sales of property,
plant and equipment.

Cash Flow from Financing Activities
Net cash used in financing activities amounted to ¥17,111 million (compared to ¥4,834 million in cashused in the same period of the previous fiscal year). This was due mainly to¥13,777 million inincrease in short-term loans payable; ¥20,538 million in decrease in short-term loans payable;¥33,576 million in proceeds from long-term loans; ¥43,042 million in repayments of long-term loans;and ¥1,182 million in dividends paid.

(3) Explanation of Consolidated Results Forecasts and Other Future Predictions
Results forecasts for the fiscal year ending November 2018 are unchanged from those announced in“Financial Statement (Consolidated Basis) for the year ended November 30, 2017” released on
January 12, 2018.

5

2. Consolidated Financial Statements and Main Explanatory Notes(1) Consolidated Balance Sheets
Millions of yen
November 30, 2017

May 31, 2018ASSETS
Current assets:
Cash and deposits

25,85732,811297

646

Real estate for sale

37,05928,056

Real estate for sale under construction

34,45630,638

Goods

0

0

Supplies

5

10

Deferred tax assets

182

216

Other

700

1,023

Allowance for doubtful accounts

(1)

(1)

98,55893,401

Buildings and structures net

30,73430,826

Buildings in trust net

3,787

405

Land

23,35522,531

Land in trust

3,797

865

Other net

211

232

61,88754,860Goodwill

82

72

Other intangible assets

57

87

Total intangible assets

140

160

Investment securities

2,558

3,241

Deferred tax assets

310

31

2,936

3,146

(36)

(53)

5,769

6,366

67,797

61,387

93

70

93

70

166,449

154,859

Receivables

Total current assets
Non-current assets:
Property and equipment:

Net property and equipment
Intangible assets:

Investments and other assets:

Other
Allowance for doubtful accounts
Total Investments and other assets
Total non-current assets
Deferred assets:
Inauguration expenses
Total deferred tax assets
Total assets

6Millions of yen
November 30, 2017

May 31, 2018

LIABILITIESCurrent liabilities:
Notes and accounts payable

3,658

2,827

Short-term borrowings

11,883

3,237

Current portion of long-term debt

18,795

15,371

Accrued income taxes

1,933

2,784

Deferred tax liabilities

29

—

2,883

2,610

39,182

26,830Long-term debt

84,10879,951

Deferred tax liabilities

1,319

1,166

147

153

1,710

1,402

Construction assistance fund

593

566

Other long-term liabilities

26

158

87,906

83,398127,088

110,229

Common stock

8,461

8,482

Capital surplus

8,575

8,759

Retained earnings

23,251

27,723

Treasury stocks at cost

(1,382)(1,382)38,906

43,582

111

215

111

215

Stock acquisition rights

343

348

Non-controlling interests—

483

39,36044,630166,449

154,859

Other
Total current liabilities
Non-current liabilities:

Liabilities for retirement benefits
Guarantee deposits

Total non-current liabilities
Total liabilities
NET ASSETS
Shareholders’ equity:

Total shareholders’ equity
Accumulated other comprehensive income:Unrealized gain on available for-sale securities
Total accumulated other comprehensive income

Total net assets
Total liabilities and net assets

7

(2) Consolidated Statements of Income and Consolidated Statements of Comprehensive Income
Consolidated Statements of Income
Six months ended May 31
Millions of yen
2017

2018

Net sales

37,692

46,317

Cost of sales

28,20633,822Gross profit

9,486

12,494

Selling, general and administrative expenses

2,558

3,382

Operating income

6,928

9,112

Interest income

1

1

Dividends

1

1

Refund of premium for cancelled insurance

7

12

Other

3

10

14

26

Interest expenses

738

723

Commission fee

61

289

Other

27

217

827

1,230

6,115

7,908

Gain on sales of non-current assets

76

484

Other

—

36

76

521

204

49

Loss on retirement of non-current assets

10

Impairment loss

69

5

Total extraordinary losses

276

55

Income before income taxes

5,915

8,374

Income taxes-current

1,809

2,568

Income taxes-deferred

(201)

16

Total income taxes

1,608

2,585

4,307

5,789

—

133

4,307

5,655

Non-operating income:

Total non-operating income
Non-operating expenses:

Total non-operating expenses
Ordinary income
Extraordinary income:

Total extraordinary income
Extraordinary loss:
Loss on sales of non-current assets

Net income
Profit attributable to non-controlling interests
Profit attributable to owners of parent

8

Consolidated Statements of Comprehensive Income
Six months ended May 31
Millions of yen
2017
Income before minority interests

2018
4,307

5,789

39

104

39

104

4,347

5,893

4,347

5,759

—

133

Other comprehensive income:Unrealized gain on available for-sale securities
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controlling interests9(3) Consolidated Statements of Cash FlowsSix months ended May 31
Millions of yen
2017

2018

Operating activities:
Income before income taxes

5,915

8,374

Depreciation

724

647

Impairment loss

69

5

Amortization of goodwill

4

4

Increase (decrease) in allowance for doubtful accounts

017Increase (Decrease) in net defined benefit liability

22

5Interest and dividends income

(3)

(2)

Interest expenses

738

723

Commission fee

61

289

Loss (gain) on sales of property, plant and equipment

128

(435)

Decrease (increase) in notes and accounts receivable - trade

398

(321)

12,945

12,819

Increase (decrease) in notes and accounts payable - trade

106

(833)

Increase (decrease) in accrued consumption taxes

169

727

Increase (decrease) in lease and guarantee deposits received

(581)

(308)

Other-net(991)(1,548)Subtotal

19,708

20,164

3

2

(722)

(728)

(1,593)(1,738)17,396

17,700

Proceeds from withdrawal of time deposits—

463

Purchase of property, plant and equipment(12,898)(6,807)2,054

13,737(1)(39)

Purchase of investment securities(495)(1,035)

Proceeds from redemption of investment securities

100

496

Payments for investments in capital

(1)

(3)

Proceeds from collection of investments

0—

Payments of construction assistance fund receivables

(27)

(27)

Other-net—

42(11,269)

6,828

Decrease (Increase) in inventories

Decrease in interest and dividends receivable
Decrease in interest payable
Income taxes paid
Net cash provided by (used in) operating activities
Investing activities:

Proceeds from sales of property, plant and equipment
Purchase of intangible assets

Net cash provided by (used in) investing activities(continued on page 11)10

Millions of yen
2017

2018

Financing activities:
Increase in short-term loans payable

11,771

13,777

Decrease in short-term loans payable(15,475)(20,538)

Proceeds from long-term loans

20,02033,576

Repayments of long-term loans(20,300)(43,042)

0

9

—

585

(781)

(1,182)

Proceeds from issuance of common shares
Proceeds from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation
Dividends paid

(69)

(297)

Net cash provided by (used in) financing activities

Other-net(4,834)(17,111)Net increase (decrease) in cash and cash equivalents

1,292

7,417

Cash and cash equivalents, beginning of the period

20,71524,833

Cash and cash equivalents, end of the period

22,00732,251

11

(4) Notes Relating to Consolidated Financial Statements(Note on Assumptions for Going Concern)
Not applicable.
(Notes in the Event of Major Changes in Shareholders’ Equity)
Not applicable.

12(Segment Information)
I Results for the first half of FY11/17 (from December 1, 2016 to May 31, 2017)
1. Operating Revenues and Earnings (or Loss) by Reportable Segment
Six months ended May 31, 2017
Millions of yen

Adjustment(Note 1)

AmountRecorded on
Consolidated
IncomeStatement(Note 2)

37,692―

37,692

146

221

(221)

―

3,537

918

37,913(221)

37,692

977

155

8,271

(1,343)

6,928

Reportable Segment

Real EstateBusiness

Property
Leasing
Business

Other
Business

Net sales from third parties

33,3893,531

771

Inter-segment net sales andtransfers

68

5

Total

33,457

Operating income

7,137

Total

Net sales:

Notes
1. The ¥1,343 million downward adjustment to operating income comprises ¥101 million in intersegment eliminations,and ¥1,241 million in corporate expenses not allocated to any reportable segment. Corporate expenses are generaland administrative expenses not attributed to any reportable segment.
2. Segment operating income is adjusted to the operating income on the consolidated income statement.

2. Disclosure of Impairment Loss of Non-Current Assets or Goodwill by Reportable Segment(Significant Impairment Loss on Non-Current Assets)
The Company recorded an impairment loss of ¥69 million in the Property Leasing Business, but did
not allocate it to a reportable segment because it was an extraordinary loss.

II Results for the first half of FY11/18 (from December 1, 2017 to May 31, 2018)
1. Operating Revenues and Earnings (or Loss) by Reportable Segment
Six months ended May 31, 2018
Millions of yen

Adjustment(Note 1)

AmountRecorded on
Consolidated
IncomeStatement(Note 2)

46,317―46,317

107

115

(115)

―

3,616

946

46,432(115)

46,317

1,046

(42)

10,612(1,500)9,112

Reportable Segment

Real EstateBusiness

Property
Leasing
Business

Other
Business

Net sales from third parties

41,862

3,615

839

Inter-segment net sales andtransfers

6

1

Total

41,869Operating income

9,608

Total

Net sales:

Notes
1. The ¥1,500 million downward adjustment to operating income (loss) comprises a negative ¥13 million inintersegment eliminations, and a negative ¥1,486 million in corporate expenses not allocated to any reportablesegment. Corporate expenses are general and administrative expenses not attributed to any reportable segment.
2. Segment operating income (loss) is adjusted to the operating income on the consolidated income statement.

13

2. Disclosure of Impairment Loss of Non-Current Assets or Goodwill by Reportable Segment
Not applicable.

(Significant Events after the Reporting Period)
Not applicable.

END

14