Summary of Accounts for First Three Quarters of Fiscal Year Ending December 2020
(Japanese GAAP) (Consolidated)
Name of listed company: ES-CON JAPAN Ltd.
Code:
8892
Representative:(Name) Takatoshi Ito(Position)
Contact for inquiries:(Name) Minoru Nakanishi(Position)
Scheduled date for submission of periodic securities report:
Scheduled date for start of dividend payment:
Supplementary explanatory materials created for accounts? Yes/No:
Accounts briefing meeting held?
Yes/No:October 29, 2020
Listing exchange: Tokyo Stock Exchange
URL:
https://www.es-conjapan.co.jp/english/
President & Representative Director
Senior Managing Director TEL: 06 (6223) 8055
October 29, 2020－
No
No

(Amounts are rounded down to the nearest million yen
Consolidated results for first three quarters of fiscal year ending December 2020
(from January 1, 2020, to September 30, 2020)(1) Consolidated operating results(% figures show the rate of increase (decrease) compared with the same period of the previous year)
Profit attributable to
Net sales
Operating income
Ordinary income
owners of parent
million% million yen% million yen% million yen%
yenFirst three quarters of fiscal
64,92741.4
11,271
31.3
10,475
35.6
7,243
37.9
year ending Dec.2020
First three quarters of fiscal
45,923
27.5
8,586
28.5
7,722
30.7
5,252
30.7
year ended Dec. 2019
Note: Comprehensive income
First three quarters of fiscal
First three quarters of fiscal
year ending Dec. 2020:
7,047 million yen [30.1%] year ended Dec. 2019:
5,417 million yen [35.1%]
1First three quarters of fiscal
year ending Dec.2020
First three quarters of fiscal
year ended Dec. 2019

Basic
earnings per shareyen

Dilutedearnings per shareyen

105.84105.73

76.74

76.59

(2) Consolidated financial position
Total assets
Net assets
Equity ratio
Book value per share
million yen
million yen%
yenFirst three quarters of fiscal
136,843
38,09327.8
555.97
year ending Dec.2020
Fiscal year ended Dec.
132,696
33,54625.3
490.082019
Reference: Equity
First three quarters of fiscal
Fiscal year ended Dec.
year ending Dec. 2020:
38,091 million yen
2019:33,544 million yen
2.

Dividends

Fiscal year ended Dec. 2019
Fiscal year ending Dec. 2020

End of first
End of second
quarterquarter
yen
yen
－
0.00
－
0.00

Fiscal year ending Dec. 2020
(Forecast)(Note) Revisions from latest dividends forecast: None

Annual dividend
End of third
quarteryen－－

Year-end

Total

yen
36.00

yen
36.00

38.00

38.00

3.

Consolidated earnings forecast for fiscal year ending December 2020 (from January 1, 2020, to December 31, 2020)(% figures for the full fiscal year show the rate of increase (decrease) compared with the

Net sales

Full fiscal year

millionyen
86,000Operating income%
19.3

millionyen
13,300%
3.0

previous period)
Profit attributable to
Basic
Ordinary income
owners of parent earnings per share
million%million
%
yen
yen
yen
12,300
4.1
8,500
4.2
124.17(Note) Revisions from latest earnings forecast: None
* Explanatory notes(1) Changes in significant subsidiaries during the first three quarters(Changes in specified subsidiaries resulting in change in scope of consolidation):
Newly included: － companies (Company name) －－ companies (Company name) －Excluded:None(2) Application of accounting treatments specific to preparation of quarterly consolidated financial statements:(3) Changes in accounting policies, changes in accounting estimates, and restatement
1) Changes in accounting policies due to amendment of accounting standards, etc.:
2) Changes in accounting policies other than 1):
3) Changes in accounting estimates:
4) Restatement:(4) Number of shares issued and outstanding (common shares)
First three quarters
1) Number of shares issued and outstanding
71,941,887
of fiscal year(including treasury shares) at end of period
sharesending Dec. 2020
First three quarters
3,428,400
2) Number of treasury shares at end of period of fiscal year
sharesending Dec. 2020
First three quarters
3) Average number of shares during period
68,438,208
of fiscal year
(cumulative total of first three quarters)
sharesending Dec. 2020

None

None
None
None
None

Fiscal year ended
Dec. 201971,841,887
sharesFiscal year ended
Dec. 2019

3,394,700
sharesFirst three quarters
68,437,040
of fiscal year
sharesended Dec. 2019

Note: The number of treasury shares at end of period includes shares of ES-CON JAPAN held in a share-based
payment benefits trust for directors and a share-based payment benefits-type ESOP trust (first threequarters of fiscal year ending December 2020: 851,000 shares in the share-based payment benefits trust for
directors and 233,000 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 three quarters), the treasury shares tobe subtracted in that calculation includes shares of ES-CON JAPAN held in the share-based payment
benefits trust for directors and the share-based payment benefits-type ESOP trust (first three quarters offiscal year ending December 2020: 905,191 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 6.

○ Contents of Attachment
1. Qualitative Information on Quarterly Results ................................................................................................................... 2(1) Business Risks .......................................................................................................................................................... 2(2) Explanation of Operating Results .............................................................................................................................. 2(3) Explanation of Financial Position ............................................................................................................................... 6(4) Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information......................................... 6
2. Quarterly Consolidated Financial Statements and Key Notes ......................................................................................... 7(1) Quarterly Consolidated Balance Sheet ...................................................................................................................... 7(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income .... 9(Quarterly Consolidated Statement of Income) .............................................................................................................. 9(Quarterly Consolidated Statement of Comprehensive Income) .................................................................................. 10(3) Notes to Quarterly Consolidated Financial Statements ........................................................................................... 11(Notes on Going Concern Assumption)........................................................................................................................ 11(Notes on Substantial Changes in the Amount of Shareholders’ Equity) ..................................................................... 11(Additional Information) ................................................................................................................................................ 11(Segment Information, Etc.) ......................................................................................................................................... 13(Significant Subsequent Events) .................................................................................................................................. 14
3. Other ............................................................................................................................................................................. 15
Status of Contracts and Sales ....................................................................................................................................... 15- 1 -Attachment
1.

Qualitative Information on Quarterly Results(1) Business Risks
The following is the business risks that newly arose in the first three quarters. The statements concerning future
matters are the judgement of ES-CON JAPAN Group (ES-CON JAPAN and its consolidated subsidiaries) as of theend of the third quarter of the fiscal year ending December 2020.
Although the COVID-19 pandemic has somewhat subsided, its impact on the economy is still grave. As concerns overpossible second and third waves of infections remain, it is extremely difficult to foresee the future real estate market
trends. If the pandemic continues over a long term, the economy is expected to further deteriorate. In such a case,the operating results, financial position, and status of cash flow of ES-CON JAPAN Group may be materially impacted
due to posting of appraisal loss of inventories and impairment loss, etc.
Possible risks in business segments are as follows.
1)

Condominium sales
In the condominium sales business, although the number of visitors to showrooms dropped significantly during thestate of emergency causing a slowdown of sales, the number picked up gradually after the state of emergency
was lifted. Current situation indicates actual demand for housing under the pandemic remaining stronger than
expected. However, since it is possible that unstable economic trends brought by prolonged pandemic may slow
down sales, the future remains unpredictable.

2)

Real estate (other) sales business
There is a risk of possible decrease in real estate prices due to a reduced appetite for investment among investors,
the worsening of the financing environment resulting from financial contraction, and other factors.

3)

Retail properties
ES-CON JAPAN Group owns and manages retail properties centering on community-based shopping centers withsupermarkets as the core tenant. Supermarkets, drug stores, etc. selling daily essentials continued operations
during the state of emergency and have posted sales exceeding 100% year on year. However, other tenants, suchas restaurants, apparel shops and sports clubs, have seen a slow return of customers and are still facing difficultyin business operation. As such, there is a risk of possible decrease in planned real estate leasing income due torent reduction requests, uncollected rents of bankrupted tenants, difficulty in soliciting new tenants, etc.

4)

HotelsES-CON JAPAN has been promoting hotel development projects in recent years, and has completed sales for 15
out of its 17 projects. As to the 2 projects underway (Fukuoka City Project opened in March 2020 and Osaka City
Project to open in January 2021), there is a risk of possible delay in the sales period or decrease in sales prices
due to the sluggish occupancy rate and difficulty in predicting the time needed for recovery.
While having adopted telework and off-peak commuting, ES-CON JAPAN Group will continue to thoroughly
implement measures to prevent the spread of COVID-19, such as mask-wearing, hand-washing, sanitizing handswith alcohol and avoiding three Cs (closed spaces, crowded places, close-contact settings).

(2) Explanation of Operating Results
In the first three quarters, the Japanese economy was significantly impacted by the COVID-19. While gradualincrease of socioeconomic activities with measures in place to prevent the spread of infection is underway, recovery
is slow and possible second and third waves have also been of concern. As such, the outlook is extremely cloudedwith uncertain economic trends in Japan and abroad, fluctuation in the financial and capital markets, etc.
In the real estate industry in which the ES-CON JAPAN Group operates, the future impact of COVID-19 on the realestate market is extremely difficult to predict.
Given the business environment described above, we have decided in July 2020 to review the third medium-term
management plan “IDEAL to REAL 2022” with a period of three years from the fiscal year ending December 2020 tothe fiscal year ending December 2022, and have withdrawn the plan. Despite being in an environment with anunforeseeable future, we will assuredly make strategic moves towards expansion of new business fields andsustainable growth by taking the current situation as an opportunity to develop our business.
- 2 -

1)

Status of Implementation of Growth Strategy of ESCON JAPAN REIT Investment Corporation
As one of the growth strategies of ESCON JAPAN REIT Investment Corporation (hereinafter the “EJR”), of whichasset management is entrusted to ES-CON Asset Management Ltd. (hereinafter the “EAM”), a consolidated
subsidiary of ES-CON JAPAN, a support agreement was concluded among three companies, namely Chuden
Real Estate Co., Inc. (hereinafter “Chuden Real Estate”), EJR and EAM, in September 2019. ES-CON JAPANtransferred real estate for sale (tonarie Yamatotakada (50% interest), tonarie Toga-Mikita (50% interest),
commercial leasehold land in Omihachiman City, Shiga, commercial leasehold land in Muko City, Kyoto, andcommercial leasehold land in Ikoma-gun, Nara) to Chuden Real Estate in February 2020, utilizing temporary
warehousing functions, under a precondition to transfer the real estate to EJR based on the support agreement.
In February 2020, EJR conducted its first public offering after listing, and its asset size increased from 41.6 billion
yen upon listing to 51.9 billion yen after the public offering, steadily expanding the asset size.
ES-CON JAPAN Group fully supports enhancement of earnings and stable growth of EJR as its sponsor and aims
for further growth.

2)

Status of Demonstration of Synergy Effect with Chubu Electric Power Group
ES-CON JAPAN concluded a capital and business partnership agreement with Chubu Electric Power Co., Inc. inAugust 2018 to position the Chubu region as a core business area comparable to the Tokyo metropolitan area andthe Kansai region, and established a Nagoya branch in March 2019. Following the establishment, ES-CON
JAPAN has acquired new land for business use for four projects in the Chubu Region.
Furthermore, as a joint project with Chuden Real Estate, ES-CON JAPAN will launch condominium/commercial
development projects in Ichinomiya City, Aichi Prefecture, Kakegawa City, Shizuoka Prefecture and Suita City,
Osaka Prefecture. Through such, ES-CON JAPAN intends to develop businesses that can satisfy local residents
by demonstrating synergy while continuing to strengthen its partnership with each group company of Chubu
Electric Power.

3)

Participation in Hokkaido Ballpark Project and Acquisition of Naming Rights for New Ballpark
With regard to the naming rights for the new ballpark of the Hokkaido Nippon-Ham Fighters planned to beestablished and opened in 2023 in Kitahiroshima City, Hokkaido, ES-CON JAPAN concluded a ballpark namingrights agreement with Hokkaido Nippon-Ham Fighters Baseball Club Co., Ltd. and Fighters Sports &Entertainment Co., Ltd., which manages the entire HOKKAIDO BALLPARK F VILLAGE and owns/operates theballpark, in January 2020.
The name of the new ballpark will be “ES CON FIELD HOKKAIDO.” The area surrounding the ballpark is an
important base as a planned site for a sports park in Kitahiroshima City and is part of a large-scale development
area for HOKKAIDO BALLPARK F VILLAGE (total development area: approx. 36.7 ha) with construction of a newstation also planned. ES-CON JAPAN is scheduled to participate in the development of various real estate in thearea such as a hotel on the land of approximately 9,400 m2 adjoining the ballpark as well as urban development.
Having opened its Hokkaido branch in September 2020, ES-CON JAPAN will seize this opportunity to also start
supporting sports, cultural promotion, etc. for the happiness of the residents of Hokkaido and contribute torevitalization and development of the entire community.

4)

Status of Initiatives for New Businesses
Under the circumstances in which the Amended Immigration Control Act, which newly accepts the status ofresidence in some business types, was enforced in April 2019 and improvement in the working environment forforeign workers has progressed against the backdrop of a serious labor shortage, ES-CON JAPAN established,as part of its ESG management, “ES-CON Global Works Ltd.,” a consolidated subsidiary engaged in theemployment placement business, to help solve such social issues and launched employment placement services
for foreigners specializing in the restaurant industry, accommodation industry, and building-cleaning as well as anoverseas expansion consulting business in March 2020.
In addition, in April 2020, ES-CON JAPAN invested in SQUEEZE Inc., which develops systems for hotel operationand conducts a hotel operation business. While ES-CON JAPAN cautiously engages in hotel development
projects under the COVID-19 pandemic, it aims to strengthen its real estate operation business and diversify its
other businesses to prepare for future recovery of inbound tourists.
Furthermore, with an intention to establish a private real estate investment corporation (private REIT) and launch
its operation in fiscal 2021 entrusting the asset management to EAM, ES-CON JAPAN formed a private fund that- 3 -manages rental apartments in September 2020 in collaboration with NISSHIN FUDOSAN Co., Ltd.
In addition, ES-CON JAPAN passed a resolution to newly launch a business to sell, operate, and manage acolumbarium in around October 2020 to solve issues in modern society, such as shortage of burial grounds due tothe large number of deaths resulting from aging population, the situation where there will be nobody to look aftergraves due to small families with fewer children, and particularly, the situation where having a grave located incentral Tokyo is extremely difficult.
ES-CON JAPAN will continue to challenge new business fields, and aim for sustainable growth of the entire group.
5)

Overseas Investment Business
In March 2019, ES-CON JAPAN made a commitment to invest in a Hawaii-focused, closed-end real estate
investment fund as its new overseas business. In July 2019, ES-CON JAPAN established its subsidiary ESCON
JAPAN (Thailand) CO., LTD. in Thailand, and participated in a condominium joint development project in Bangkok.
ESCON JAPAN is steadily developing its overseas business through efforts such as committing to newinvestment in a California-focused, closed-end real estate investment fund in March 2020.

6)

Status of ESG Initiatives
ES-CON JAPAN has set “Address social issues through promotion of ESG initiatives” as one of its corporate
strategies. As part of such activities, ES-CON JAPAN is providing a monetary donation to Kyoto University’s “iPS
Cell Research Fund” to support activities realizing early and inexpensive treatment using iPS cells for those
suffering from diseases and accidents, in addition to initiatives in new businesses which will contribute to regional
revitalization and help solve social issues.
In addition, in March 2020, ES-CON JAPAN realized fund procurement through an “ESG/SDGs assessmentbased loan” provided by Sumitomo Mitsui Banking Corporation. Of the project funds of the syndicate loanarranged by Sumitomo Mitsui Banking Corporation to fund the Fujishirodai 5-Chome project (joint project with
Chuden Real Estate) whose site was acquired in March 2020, three billion yen was procured through the“ESG/SDGs assessment-based loan” upon earning a rank of A*, the third-best ranking among the seven rankings,
indicating that “good ESG/SDG initiatives and information disclosure have been conducted.”
In May 2020, ES-CON JAPAN acquired EcoAction 21 Certification, a Japanese environmental management
system (EMS) established by the Ministry of the Environment. EcoAction 21 is an EMS for proactive, effective
environmental management including reduction of CO2 emissions, and EMS activities aim for continuous efforts
based on the PDCA cycle. By continuing to conduct environmentally friendly management through EcoAction 21
initiatives, companies are expected to fulfill their social responsibility to reduce environmental burden while suchactivities also bring benefits to management, such as cost reduction and improved productivity, and contribute to
the enhancement of corporate value.
In July 2020, tonarie Yamatotakada and tonarie Toga-Mikita, retail properties developed by ES-CON JAPAN andcurrently owned by EJR, obtained DBJ Green Building Certification (a certification system created by theDevelopment Bank of Japan (hereinafter the “DBJ”) in April 2011 to support real estate properties withenvironmental and social awareness (“Green Building”)) from DBJ.
Furthermore, in July 2020, Soyoca Fujimino, a retail property owned by ES-CON JAPAN, obtained “Rank S,” thehighest mark of CASBEE for real estate from a CASBEE* accreditation body authorized by Institute for Building
Environment and Energy Conservation.
*CASBEE (Comprehensive Assessment System for Built Environment Efficiency) is a system to comprehensively
assess the quality of a building, which evaluates and ranks the environmental performance of the building by
taking into account not only environmental considerations such as energy savings and use of environmentallyfriendly materials, but also comfort in the building, and its visual impact on the area.
Furthermore, in terms of governance, ES-CON JAPAN established the “Nomination and Remuneration Advisory
Committee” in January 2020 with an aim to strengthen the independence and objectivity of functions as well as
the accountability of the board of directors with regard to nomination and remuneration of directors. ES-CON
JAPAN also launched initiatives for a succession plan called the candidate successor system.
ES-CON JAPAN will continue with steady implementation of ESG management as an important management
strategy, and make proactive efforts with an aim to achieve sustainable growth of ES-CON JAPAN Group.

- 4 -

7)

Business Development by Segment
In the real estate sales business, our core business, we conducted revenue-generating real estate sales, etc., inaddition to achieving progress in condominium sales.
In the real estate sales business, sales of new projects “ Le JADE Mukonoso Honmachi (Amagasaki City, Hyogo
Prefecture; 33 units in total),” “Le JADE Nagai Koen Dori (Sumiyoshi Ward, Osaka City; 108 units in total),” “LeJADE Senri Aoyamadai (Suita City, Osaka Prefecture; 152 units in total),” “Le JADE Senri Furuedai (Suita City,
Osaka Prefecture; 71 units in total),” etc. started while “Le JADE Kuzuha (Hirakata City, Osaka Prefecture; 78
units in total),” “Le JADE Kotoen (Nishinomiya City, Hyogo Prefecture; 49 units in total)” “Le JADE
Higashisumiyoshi Imagawa Ryokudo (Higashisumiyoshi Ward, Osaka City; 41 units in total)” and “Le JADE
Toyoda Master Hills (Hino City, Tokyo; 63 units in total)” were sold out upon completion and “Le JADE Morinomiya(Higashinari Ward, Osaka City; 45 units in total),” which is scheduled for completion in the current fiscal year, and“Le JADE Nishiakashi (Akashi City, Hyogo Prefecture; 77 units in total),” which is scheduled for completion in thenext fiscal year, are contracted to sell out.
Furthermore, in order to develop multifaceted businesses not only in Fukuoka Prefecture but also across Kyushu
going forward, EC-CON JAPAN changed the name of Fukuoka branch to “Kyushu branch” in September 2020
and is determined to acquire new land for business use in the Kyushu area as well.
In businesses other than the real estate sales business, sales of “LOGITRES Tojo (Kato City, Hyogo Prefecture)”(a logistics development project), “Honjo-Nishi, Kita-ku,” “Matsubara, Setagaya-ku” and “Daikyocho, Shinjuku-ku”(all revenue-generating real estate); and transfer of commercial facilities and commercial leasehold lands to EJR
and Chuden Real Estate have been completed.
In the real estate leasing business, efforts are being made to secure stable rental income from retail properties
held by ES-CON JAPAN and to enhance their asset value.

- 5 -In the real estate planning agency and consulting business, focus is placed on being a business achieving high profit
margins through subcontracting, planning agency and consulting and other non-assets by leveraging the planningand other strengths of ES-CON JAPAN.
As a result, ES-CON JAPAN achieved net sales of 64,927 million yen (up 41.4%), operating income of 11,271 million
yen (up 31.3%), ordinary income of 10,475 million yen (up 35.6%) and profit attributable to owners of parent of 7,243
million yen (up 37.9%) for the first three quarters, all compared with the same period of the previous year.
The following describes the operating results by each segment, with figures compared with the same period of theprevious year.
1)

Real estate sales businessIn the real estate sales business, activities included selling condominiums and revenue-generating real estate,
and resulted in net sales of 60,686 million yen (up 44.3%) and segment income of 12,886 million yen (up 44.3%),
despite the ongoing spread of COVID-19.

2)

Real estate leasing businessIn the real estate leasing business, although focus was placed on leasing activities and the property managementbusiness in view of enhancement of asset value, including increase in rental income of owned revenue-generating
real estate, such efforts resulted in net sales of 4,067 million yen (up 10.7%) and segment income of 1,752 million

3)

yen (down 24.5%).
Real estate planning agency and consulting businessIn the real estate planning agency and consulting business, although proactive efforts were made in such aspects
as entrustment with planning, consulting and other services by making the best use of planning and multifacetedbusiness building abilities, it resulted in net sales of 173 million yen (down 13.6%) and segment income of 100
million yen (down 31.9%).

(3)

Explanation of Financial Position
Assets at the end of the first three quarters increased by 4,146 million yen compared with the end of the previous
fiscal year to 136,843 million yen. This was mainly attributable to cash and deposits and property, plant andequipment increasing by 2,357 million yen and 1,522 million yen, respectively, and inventories decreasing by 537
million yen.
Liabilities decreased by 399 million yen compared with the end of the previous fiscal year to 98,749 million yen.
This was mainly attributable to long-term loans payable, short-term loans payable and bonds payable increasing
by 2,520 million yen, and income taxes payable decreasing by 2,233 million yen.
Net assets increased by4,546 million yen compared with the end of the previous fiscal year to 38,093 million yen.
This was attributable to cash dividends paid of 2,490 million yen, while recording profit attributable to owners ofparent of 7,243 million yen. As a result, the equity ratio was 27.8% (25.3% at the end of the previous fiscal year).

(4)

Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information
The consolidated earnings forecast remains unchanged from the forecast announced on January 30, 2020.
However, the impact of COVID-19 on the real estate market in the future is extremely difficult to predict. While
progress mostly in line with the forecast was seen for the first three quarters, we will be discussing the forecast
alongside carefully watching the business environment, business progress, and such going forward. Whenrevision of the forecast becomes necessary as a result, we will promptly make an announcement.
As mentioned above, we will review the current third medium-term management plan “IDEAL to REAL 2022” since
there is a significant difference between the initial assumptions and the current economic conditions. The revisedplan will be announced promptly once resetting of the assumptions becomes possible.
In addition, under the circumstances where making predictions for the future is extremely difficult, we havereviewed the progressive dividend policy in order to prioritize accumulation of internal reserve.

- 6 -

2.

Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet(Unit: million yen)
Third quarter offiscal year ending
Dec. 2020(as of Sept. 30, 2020)

Fiscal year ended
Dec. 2019(as of Dec. 31, 2019)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Real estate for sale
Real estate for sale in process
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets- 7 -22,511
598
24,234
59,6197,173
114,137

24,868681
8,120
75,196
6,922
115,789

3,216
(566)
2,649
10,621
295
(132)
163
13,433

4,342
(805)
3,537
11,262
333
(176)
157
14,956

436
56
492

363
73
437

4,670
(37)
4,632
18,558132,696

5,697
(37)
5,659
21,054
136,843

(Unit: million yen)
Third quarter offiscal year ending
Dec. 2020(as of Sept. 30, 2020)

Fiscal year ended
Dec. 2019(as of Dec. 31, 2019)
Liabilities
Current liabilities
Short-term loans payable
Current portion of long-term loans payable
Current portion of bonds
Income taxes payable
Other
Total current liabilities
Non-current liabilities
Bonds payable
Long-term loans payable
Provision for directors’ share-based benefits
Provision for share-based benefits
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Total accumulated other comprehensive
incomeSubscription rights to shares
Non-controlling interests
Total net assets
Total liabilities and net assets

- 8 -

4,580
32,415
40
3,396
9,768
50,1994,669
26,164
230
1,162
8,380
40,607230
47,720
114
35
249
600
48,95099,149－56,441
135
44
259
1,259
58,141
98,7496,275
2,004
26,256(1,247)33,2886,282
2,086
31,009(1,348)38,031

256

56

(0)

3

256

60

1
0
33,546132,6961
0
38,093
136,843

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income(Quarterly Consolidated Statement of Income)First three quarters of fiscal year ending Dec. 2020

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Penalty income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Share of loss of entities accounted for using
equity method
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on reversal of subscription rights to shares
Total extraordinary income
Extraordinary losses
Loss on retirement of non-current assets
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to owners of parent

First three quarters offiscal year ended
Dec. 2019(from Jan. 1, 2019,
to Sept. 30, 2019)45,92332,90813,014
4,428
8,586(Unit: million yen)First three quarters offiscal year ending
Dec. 2020(from Jan. 1, 2020,
to Sept. 30, 2020)
64,927
47,82917,097
5,826
11,271

1
2
13
2
20

12
46
20
11
90

871

758

－

86

13
884
7,722

41
886
10,475

－
0
0

0
0
0

3
3
7,719
2,403
63
2,466
5,252
5,252

0
0
10,475
2,919
312
3,232
7,243
7,243

- 9 -

(Quarterly Consolidated Statement of Comprehensive Income)First three quarters of fiscal year ending Dec. 2020

ProfitOther comprehensive income
Valuation difference on available-for-salesecurities
Foreign currency translation adjustment
Share of other comprehensive income of entities
accounted for using equity method
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners ofparentComprehensive income attributable to noncontrolling interests

First three quarters offiscal year ended
Dec. 2019(from Jan. 1, 2019,
to Sept. 30, 2019)
5,252(Unit: million yen)First three quarters offiscal year ending
Dec. 2020(from Jan. 1, 2020,
to Sept. 30, 2020)
7,243

171

(200)

(6)

8

－

(4)

165
5,417

(195)
7,047

5,417

7,047

－

－

- 10 -

(3) Notes to Quarterly Consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable.
(Notes on Substantial Changes in the Amount of Shareholders’ Equity)
Not applicable.
(Additional Information)(Accounting estimates in line with the spread of COVID-19)
Although it is difficult to accurately predict the future spread or end of the impact of COVID-19, accounting
estimates are made assuming the impact on ES-CON JAPAN Group’s businesses is minimal since the impact on
ES-CON JAPAN Group’s businesses at this point in time is limited.
However, there are many factors of uncertainty concerning the impact of the COVID-19 pandemic, and thus if thereal estate market deteriorates further, the operating results, financial position, and status of cash flow of ES-CON
JAPAN Group may be materially impacted due to posting of appraisal loss of inventories and impairment loss, etc.
(Board Benefit Trust for Executives)(1) Overview of the transaction
1)

ES-CON JAPAN passed a resolution to introduce the performance-based stock reward system (the “System”;
The trust established based on the trust agreement concluded with Resona Bank, Limited for the System isreferred to as “board benefit trust for executives”) at the Regular General Meeting of Shareholders held on
March 20, 2015, with an aim to further clarify remuneration for company directors (excluding outside directors,
auditors and non-executive directors) (the “Directors”; Hereinafter referred to as the same unless otherwise
specified) and the relationship between ES-CON JAPAN’s operating results and share price, with the Directors
not only benefiting from a rise in share price but also sharing the same risks as shareholders in relation to a fallin share price, thereby increasing awareness of contribution to the medium- to long-term improvement ofoperating results and enhancement of corporate value. Furthermore, ES-CON JAPAN passed a resolution forcontinuation and partial revision of the System for the Directors at the Regular General Meeting of
Shareholders held on March 26, 2020.
The System after the revision is an incentive system by which ES-CON JAPAN contributes money to a trustwith the trust acquiring shares of ES-CON JAPAN with the said money as capital, and shares of ES-CON
JAPAN and the fair market value of shares of ES-CON JAPAN are granted to ES-CON JAPAN’s Directors
through the trust in accordance with the operating results achievement rate, etc. pursuant to the officer stock
ownership regulations set by ES-CON JAPAN. The shares of ES-CON JAPAN will be granted to the Director of
ES-CON JAPAN when the said Director retires from the position of director in principle.
Under the System, for a set period of three fiscal years from the fiscal year ending December 2020 to the fiscal
year ending December 2022 as well as each subsequent period of three fiscal years, ES-CON JAPAN willcontribute money up to 330 million yen (110 million yen per fiscal year multiplied by the number of target fiscal
years) to the trust.

2)

Total number of shares to be granted to the Directors
・ Resolution passed at the Regular General Meeting of Shareholders held on March 20, 2015
Upper limit of funds for acquisition of shares (for the five fiscal years from the fiscal year ended December
2015 to the fiscal year ended December 2019): 240 million yen
・ Resolution passed at the Regular General Meeting of Shareholders held on March 26, 2020
Upper limit of funds for acquisition of shares (for the three fiscal years from the fiscal year ending December
2020 to the fiscal year ending December 2022, and each subsequent period of three fiscal years): 330
million yen

3)

Scope of persons who are eligible to receive beneficiary rights and other rights under the System
The Directors of ES-CON JAPAN who have acquired the right to receive shares based on the officer stock
ownership regulations.

- 11 -

(2) Residual Shares of ES-CON JAPAN in the Trust
Residual shares of ES-CON JAPAN in the trust are recorded as treasury shares under net assets using the bookvalue in the trust (excluding the amount of incidental expenses). The book value of the treasury shares and thenumber of shares is 114 million yen and 487,200 shares for the previous fiscal year, and 347 million yen and851,000 shares for the third quarter of the fiscal year under review.
(Share-Based Payment Benefits Type ESOP Trust)(1) Overview of the transaction
ES-CON JAPAN passed a resolution to introduce a share-based payment benefits-type ESOP trust (the “System”;
The trust established based on the trust agreement concluded with Resona Bank, Limited for the System isreferred to as “Share-Based Payment ESOP”) at the Regular General Meeting of Shareholders held on March 20,
2015, with an aim to further enhance the benefit program for its employees and raise their motivation and morale
for improving the share price and operating results.
The System is a system by which ES-CON JAPAN contributes money to a trust with the trust acquiring shares of
ES-CON JAPAN with the said money as capital, and shares of ES-CON JAPAN are granted to ES-CON JAPANGroup’s employees who have satisfied certain requirements through the trust, pursuant to the stock ownershipregulations set by ES-CON JAPAN.
(2) Residual Shares of ES-CON JAPAN in the Trust
Residual shares of ES-CON JAPAN in the trust are recorded as treasury shares under net assets using the bookvalue in the trust (excluding the amount of incidental expenses). The book value of the treasury shares and thenumber of shares is 59 million yen and 233,100 shares for the previous fiscal year, and 59 million yen and
233,000 shares for the third quarter of the fiscal year under review.

- 12 -

(Segment Information, Etc.)[Segment Information]
I. First three quarters of fiscal year ended Dec. 2019 (from January 1, 2019, to September 30, 2019)
1. Information on Net Sales and Income or Loss Amounts by Reporting Segment(Unit: million yen)Amount on
Reporting segment
quarterly
Real estate
Reconciliation consolidated
Total
Real estate
Real estate(Note 1)statement ofplanning agency
sales
leasingand consulting
incomebusinessbusinessbusiness(Note 2)
Net sales
Net sales toexternalcustomers
Intersegment net
sales or transfers
Total
Segment income

42,0493,673

200

45,923－45,923

－

－

－

－

－

－

42,0493,673

200

45,923－45,923

8,929

2,320

147

11,398(2,811)

8,586(Note 1) The reconciliation of segment income of -2,811 million yen is corporate expenses not attributable to any
reporting segment. Corporate expenses are general and administrative expenses not attributable to reporting
segments.
(Note 2) Segment income is reconciled with operating income on the quarterly consolidated statement of income.
2. Information on Impairment Loss on Non-Current Assets or Goodwill, Etc. by Reporting Segment
In the real estate sales business, goodwill increased by 460 million yen after acquiring the entire share of One’s
Own House Co., Ltd. (currently ES CON HOME Co., Ltd.) and Rise Home Co., Ltd. (currently ES-CON CRAFTLtd.) and making them subsidiaries.
II. First three quarters of fiscal year ending Dec. 2020 (from January 1, 2020, to September 30, 2020)
1. Information on Net Sales and Income or Loss Amounts by Reporting Segment(Unit: million yen)Amount on
Reporting segment
quarterly
Real estate
Reconciliation consolidated
Real estate
Real estate
Total
planning agency(Note 1)statement ofsales
leasing
incomeand consulting
businessbusinessbusiness(Note 2)
Net sales
Net sales toexternalcustomers
Intersegment net
sales or transfers
Total
Segment income(Note 1)

(Note 2)60,686

4,067

173

64,927－64,927

－

－

－

－

－

－

60,686

4,067

173

64,927－64,927

12,886

1,752

100

14,739(3,467)

11,271

The reconciliation of segment income of -3,467 million yen is corporate expenses not attributable to any
reporting segment. Corporate expenses are general and administrative expenses not attributable to reporting
segments.
Segment income is reconciled with operating income on the quarterly consolidated statement of income.

2. Information on Impairment Loss on Non-Current Assets or Goodwill, Etc. by Reporting Segment
Not applicable.

- 13 -

(Significant Subsequent Events)(Launch of new business)
ES-CON JAPAN passed a resolution at the board of directors’ meeting held on October 29, 2020, to newly launch abusiness to sell, operate, and manage permanent use rights of a columbarium through Ryomon Co., Ltd., which will
newly become a consolidated subsidiary.
(1) Details of business① Ryomon Co., Ltd. will be entrusted with the following businesses from a religious corporation that serves as an
operator of a columbarium in Japan.
・Sale of permanent use rights of columbarium
・Operation and management of columbarium② Operator
Ryomon Co., Ltd. (consolidated subsidiary in which ES-CON JAPAN holds 51% voting rights)③ Project costs
Ryomon Co., Ltd. plans to take out loans of 7,000 million yen from financial institutions to fund the acquisition of
the exclusive sales rights, etc. of the permanent use rights of a columbarium, and ES-CON JAPAN plans to be
the debt guarantor for the amount equivalent to 51% of the said loans.
(2) Commencement period of new business
October 30, 2020 (planned)(3) Impact on operating results
Since the business is scheduled to start on October 30, 2020, the impact on ES-CON JAPAN Group’s operating
results for the fiscal year under review is minimal. The impact on the next fiscal year onward is currently being
examined.

- 14 -

3.

Other
Status of Contracts and Sales
The performance of contracts in the real estate sales business for the third quarter is as follows:
Third quarter of fiscal year ending Dec. 2020
(from Jul. 1, 2020, to Sept. 30, 2020)
Classification
Contract amount during the period
Number of units(units)Balance of contracts at the end of the period

Amount(million yen)

Number of units(units)Amount(million yen)

Mid- to high-risehousing, etc.

224

10,486396

16,928

Other

－

919

－

4,349

224

11,406396

21,278

Total(Note)

The above amounts do not include consumption tax, etc.

The main performance of sales by segment for the first three quarters is as follows:First three quarters of fiscal year ending Dec. 2020
(from Jan. 1, 2020, to Sept. 30, 2020)

Name of segment

Number of units(units)Property nameCondominiums

521

23,893

tonarie Yamatotakada

－

8,175

LOGITRES Tojo

－

8,120

tonarie Toga-Mikita

－

6,875

－

2,733

Daikyocho, Shinjuku-ku

－

2,562

Matsubara, Setagaya-ku

－

2,167

Honjo-Nishi, Kita-ku

－

1,967

Commercial leasehold land in
Omihachiman-shi－

970

Commercial leasehold land in
Ikoma-gun－

765

Commercial leasehold land in
Muko-shi－

445

Genboen, Koga-shi

－

393

Other

－

1,617

521

60,686

Commercial leasehold land in
Sakai-shi

Real estate sales business

Subtotal
Real estate leasing business

4,067

Real estate planning agency andconsulting business

173
Total

(Note 1)
(Note 2)

Amount(million yen)

There are no transactions between segments.
The above amounts do not include consumption tax, etc.

- 15 -

64,927