Summary of Accounts for First Two Quarters of Term Ending December 2017
(Japanese GAAP) (Consolidated)
August 8, 2017
Listing exchange: Tokyo Stock Exchange
URL: https://www.es-conjapan.co.jp
President & Representative Director
Senior Managing Director TEL: 06 (6223) 8055
August 8, 2017－No
Yes (for analysts)

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:(Amounts are rounded down to the nearest million yen)

1.

Consolidated results for first two quarters of term ending December 2017 (from January 1, 2017 to June 30, 2017)(1) Consolidated operating results(% figures show the rate of increase (decrease) compared with the same period of the previous year)

Net sales

Operating income

million yen

First two quarters of
11,701term ending Dec. 2017
First two quarters of
12,541term ended Dec. 2016
Note:
Comprehensive income
First two quarters ofterm ending Dec. 2017:%

million yen%

million yen%

million yen

%

(6.7)

2,369

28.5

1,878

36.2

1,879

21.7

34.9

1,844

37.0

1,379

57.0

1,544

33.5

Dilutedearnings per share

yen

yen

28.35

27.58

23.04

23.00

(2) Consolidated financial position
Total assets
First two quarters ofterm ending Dec. 2017
Term ended Dec. 2016
Reference:

2.

First two quarters ofterm ended Dec. 2016:

1,874 million yen [21.6%]

Basicearnings per shareFirst two quarters ofterm ending Dec. 2017
First two quarters ofterm ended Dec. 2016

EquityFirst two quarters ofterm ending Dec. 2017:

Net assets

1,541 million yen [33.4%]

Equity ratio

Book value per share

million yen

million yen%

yen

92,024

17,86219.4

268.6373,70317,36323.6

259.07

17,859 million yen

Term ended Dec. 2016:

17,360 million yen

Dividends
End ofsecond quarter

Annual dividend
End ofthird quarter

yen

yen

yen

yen

yen

－
－

0.00
0.00

－

15.00

15.00

－

15.00

15.00

End offirst quarter
Term ended Dec. 2016
Term ending Dec. 2017

Term ending Dec. 2017 (Forecast)(Note) Revisions from latest dividends forecast: None
3.

Profit attributable toowners of parent

Ordinary income

Year-end

Total

Consolidated earnings forecast for term ending December 2017 (from January 1, 2017 to December 31, 2017)(% figures for the full term show the rate of increase (decrease) compared with the previous period, and % figures for the first twoquarters show the rate of increase (decrease) compared with the same period of the previous term)

Net sales
Full term

Operating income

Ordinary income

Profit attributable to
Basicowners of parent earnings per share

million yen%

million yen%

million yen%

million yen%

yen

45,500

32.5

5,700

21.8

4,800

34.2

4,400

11.8

66.27

(Note) Revisions from latest earnings forecast: None
－

1 －

*

Explanatory notes(1) Changes in significant subsidiaries during the first two 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:

None

None
None
None
None

(4) Number of shares issued and outstanding (common shares)
First two
1) Number of shares issued and outstanding
70,594,887
quarters of
69,228,887 Term ended(including treasury shares) at end of period
Shares Dec. 2016
sharesterm ending
Dec. 2017
First twoquarters of
2,745,300 Term ended
3,583,600
2) Number of treasury shares at end of period
term ending
Shares Dec. 2016
sharesDec. 2017
First twoFirst two
67,010,853
quarters of
66,301,091 quarters of3) Average number of shares during period
term ending
shares term ended
sharesDec. 2016
Dec. 2017
Note: The number of treasury shares at end of period includes ES-CON JAPAN shares held in a share-based
payment benefits trust for directors and a share-based payment benefits type ESOP trust (first two quartersof term ending December 2017: 543,200 shares in the share-based payment benefits trust for directors and
235,200 shares in the share-based payment benefits type ESOP trust). In the calculation of the average
number of shares during period (cumulative total of first two quarters), the treasury shares to be subtracted
in that calculation includes ES-CON JAPAN shares held in the share-based payment benefits trust for
directors and the share-based payment benefits type ESOP trust (first two quarters of term ending
December 2017: 783,400 shares).
*This quarterly summary of accounts is not subject to quarterly review.

*

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; (3) Explanation of Consolidated
Earnings Forecast and Other Forward-Looking Information” on page 5.

－

2 －Attachment
1. Qualitative Information on Quarterly Results(1) Explanation of Operating Results
In the first two quarters, the Japanese economy was on a moderate recovery trend with the employment andincome situation continuing to trend toward improvement due in part to the government’s various economic measures,
but was in a state of clouded outlook due in part to political risks in Europe and the U.S. and deceleration of emerging
countries.
The real estate industry in which the ES-CON JAPAN Group operates held resilient and firm due in part to lowinterest rates from monetary easing policies, but rise in land prices, intensification of competition over landacquisitions and other factors make it a state that warrants no optimism.
In the business environment described above, we proactively developed multifaceted businesses based on thesecond medium-term management plan “IDEAL to REAL 2019” which started from the term ending December 2017.
In the real estate sales business, which is the core business, revenue-generating real estate sales, etc. wereconducted, and steady progress was made in condominium sales, too.
Steady progress was made in selling the projects slated for construction completion in the term ending December
2017 “Grand Le JADE Wakamatsucho Residence” (Shinjuku Ward, Tokyo; 31 units in total), “Le JADE Otsu Nagisakoen” (Otsu City, Shiga Prefecture; 44 units in total), “Le JADE Yokohama Hananoki” (Yokohama City, Kanagawa
Prefecture; 69 units in total), “Le JADE Takatsuki Cross” (Takatsuki City, Osaka Prefecture; 80 units in total), “LeJADE Fushimi Chushojima” (Fushimi Ward, Kyoto Prefecture; 83 units in total), etc., not to mention “Le JADE
Takatsuki The Marks” (Takatsuki City, Osaka Prefecture; 95 units in total), “Le JADE Sakurajosui Tiara” (Setagaya
Ward, Tokyo; 42 units in total) as well as “Feel Garden Minami-Senri” (Suita City, Osaka Prefecture; 214 units in total)and “Le JADE Southern Gate Toyoda” (Hino City, Tokyo; 51 units in total) slated for construction completion in thenext term that are already contracted to sell out.
In the commercial development business, along with acquiring several sokochi (land with land leasehold rights) of
retail properties, the acquisition of a business site for a logistics facility as a new business field marked a steady step
forward in diversification of the business.
In this manner, with six projects in the Tokyo metropolitan area, seven projects in the Kinki area and two projects inother areas in acquisitions of new business sites as the site for for-sale, commercial and other multifaceted
development in the first two quarters, steady and proactive operations are underway.
In the real estate leasing business, efforts are being made to secure stable rental income from and enhance asset
value of retail properties, etc. held by ES-CON JAPAN.
In the real estate planning agency and consulting business, focus is being placed as a business achieving highprofit margins through subcontracting, planning agency and consulting and other non-assets by leveraging theplanning and other strengths of ES-CON JAPAN.
As a result, business performance for the first two quarters was net sales of 11,701 million yen (down 6.7%
compared with the same period of the previous tern), operating income of 2,369 million yen (up 28.5% compared withthe same period of the previous term), ordinary income of 1,878 million yen (up 36.2% compared with the same
period of the previous term) and profit attributable to owners of parent of 1,879 million yen (up 21.7% compared withthe same period of the previous term).
The following is the business performance by segment.
1)

Real estate sales businessIn the real estate sales business, activities included promoting condominium sales and selling three projects ofrevenue-generating real estate, resulting in net sales of 9,895 million yen (down 9.0% compared with the same periodof the previous term) and segment income of 2,732 million yen (up 46.8% compared with the same period of theprevious term).
2)

Real estate leasing businessIn the real estate leasing business, focus was placed on leasing activities and the property management businessin view of enhancement of asset value, including increase in rental income of owned revenue-generating real estate,
resulting in net sales of 1,768 million yen (up 7.7% compared with the same period of the previous term) and segment
income of 857 million yen (down 9.3% compared with the same period of the previous term).
－

3 －

3)

Real estate planning agency and consulting businessIn the real estate planning agency and consulting business, proactive efforts were made in such aspects as

entrustment with planning, consulting and other services by making best use of planning and multifaceted businessbuilding abilities, resulting in net sales of 37 million yen (up 30.7% compared with the same period of the previousterm) and segment income of 37 million yen (up 28.1% compared with the same period of the previous term).

－

4 －(2) Explanation of Financial Position
1) Financial position
Assets at the end of the second quarter increased by 18,321 million yen compared with the end of the previous
term to 92,024 million yen. This was mainly attributable to inventories increasing by 25,566 million yen.
Liabilities increased by 17,822 million yen compared with the end of the previous term to 74,161 million yen. Thiswas mainly attributable to long-term loans payable, short-term loans payable and bonds payable increasing by 16,071
million yen.
Net assets increased by 498 million yen compared with the end of the previous term to 17,862 million yen.

This

was attributable to cash dividends paid of 1,017 million yen and purchase of treasury shares of 429 million yen, yetrecording quarterly profit attributable to owners of parent of 1,879 million yen. As a result, equity ratio was 19.4%(23.6% at the end of the previous term).
2) Cash flows
Cash and cash equivalents (“net cash”) at the end of the first two quarters decreased by 999 million yen comparedwith the beginning of the term to 7,192 million yen (3,305 million yen at the end of the same period of the previousterm).
The following outlines the cash flows and the factors of changes in cash flows in the first two quarters.
(Cash flows from operating activities)
Cash flows from operating activities decreased by 23,130 million yen (net cash used in used in operating activities of
9,650 million yen in the same period of the previous term). This was mainly attributable to quarterly profit before
income taxes of 1,889 million yen and increase in inventories of 25,450 million yen.
(Cash flows from investing activities)
Cash flows from investing activities increased by 7,456 million yen (146 million yen used in investing activities in thesame period of the previous term). This was mainly attributable to sales of non-current assets amounting to net
proceeds of 8,464 million yen.
(Cash flows from financing activities)
Cash flows from financing activities increased by 14,674 million yen (8,594 million yen provided by financing activities
in the same period of the previous term). This was mainly attributable to proceeds from and repayments of longterm loans payable and short-term loans payable as well as procurement and redemption of bonds amounting to net
proceeds of 16,071 million yen, payment of cash dividends of 1,015 million yen and purchase of treasury shares of
429 million yen.
(3) Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information
The consolidated earnings forecast remains unchanged from the forecast announced on February 12, 2016.

－5 －2. Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Real estate for sale
Real estate for sale in process
Supplies
Other
Allowance for doubtful accounts
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
Other
Total intangible assets
Investments and other assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets－

6 －Term ended Dec. 2016(as of Dec. 31, 2016)(Unit: million yen)First two quarters ofterm ending Dec. 2017(as of Jun. 30, 2017)

8,204
285
6,103
39,319
32
3,782
(73)
57,654

7,225
517
3,187
67,8340
5,761(73)
84,453

5,351(1,614)
3,737
9,320
176
(86)
90
13,1473,802(1,095)
2,707
1,966
176
(99)
77
4,751

17
17

17
17

2,887
(4)
2,883
16,04873,703

2,806
(4)
2,802
7,571
92,024

Term ended Dec. 2016(as of Dec. 31, 2016)
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-sale securities
Total accumulated other comprehensive income
Subscription rights to shares
Total net assets
Total liabilities and net assets－

7 －(Unit: million yen)First two quarters ofterm ending Dec. 2017(as of Jun. 30, 2017)

4,308
16,75340
69
4,320
25,492

6,561
24,20440
14
6,392
37,213150
29,78454
13
83
761
30,84756,339130
36,17065
1593
474
36,94874,1616,034
1,763
10,417(876)
17,338

6,068
1,797
10,746(770)
17,84122
22
317,36373,70317
17
217,862
92,024

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income(Quarterly Consolidated Statement of Income)(Unit: million yen)First two quarters ofFirst two quarters ofterm ended Dec. 2016
term ending Dec. 2017(from Jan. 1, 2016
(from Jan. 1, 2017
to Jun. 30, 2016)
to Jun. 30, 2017)
Net sales
12,541
11,701
Cost of sales
9,042
7,893
Gross profit
3,499
3,807
Selling, general and administrative expenses
1,655
1,437
Operating income
1,844
2,369
Non-operating income
Interest income
00Dividend income
1
2
Penalty income
2
14
Other
0
1
Total non-operating income
418
Non-operating expenses
Interest expenses
437
506
Share issuance cost
26
Other
5
2
Total non-operating expenses
469
509
Ordinary income
1,379
1,878
Extraordinary income
Gain on sales of non-current assets
11
Gain on reversal of subscription rights to shares
0
Total extraordinary income
011Extraordinary losses
Loss on retirement of non-current assets
00Loss on valuation of investment securities
42
Total extraordinary losses
420Profit before income taxes
1,336
1,889
Income taxes - current
127
21
Income taxes - deferred
(335)
(11)
Total income taxes(207)
10
Profit1,544
1,879
Profit attributable to owners of parent
1,544
1,879

－

8 －

(Quarterly Consolidated Statement of Comprehensive Income)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities, before tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable to:Comprehensive income attributable to owners of parent
Comprehensive income attributable to non-controlling interests－

9 －First two quarters ofterm ended Dec. 2016
(from Jan. 1, 2016
to Jun. 30, 2016)
1,544(Unit: million yen)First two quarters ofterm ending Dec. 2017(from Jan. 1, 2017
to Jun. 30, 2017)
1,879

(2)
(2)
1,541

(4)
(4)
1,874

1,541
－

1,874
－

(3) Quarterly Consolidated Statement of Cash Flows

Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for directors’ share-based benefits
Increase (decrease) in provision for share-based benefits
Interest and dividend income
Interest expenses
Share issuance cost
Loss (gain) on sales of non-current assets
Loss on retirement of non-current assets
Loss (gain) on valuation of investment securities
Decrease (increase) in notes and accounts receivable - trade
Decrease (increase) in inventories
Decrease (increase) in prepaid expenses
Increase (decrease) in accounts payable - other
Decrease/increase in consumption taxes receivable/payable
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease (increase) in other assets
Increase (decrease) in other liabilities
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes (paid) refund
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Purchase of investment securities
Proceeds from withdrawal of investment securities
Purchase of non-current assets
Proceeds from sales of non-current assets
Payments for asset retirement obligations
Collection of loans receivable
Proceeds from guarantee deposits received
Repayments of guarantee deposits received
Payments for investments in capital
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of bonds
Redemption of bonds
Repayments of lease obligations
Repayments of installment payables
Proceeds from issuance of common shares
Purchase of treasury shares
Cash dividends paid
Proceeds from release of deposits as collateral
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

－

10 －

First two quarters ofterm ended Dec. 2016
(from Jan. 1, 2016
to Jun. 30, 2016)(Unit: million yen)First two quarters ofterm ending Dec. 2017(from Jan. 1, 2017
to Jun. 30, 2017)

1,336
109
0
12
1
(1)
437
26
－
0
42
(25)
(10,061)
55
(84)
(319)
(314)
41
(179)
17
(8,903)
1
(524)
(224)
(9,650)

1,889
99
－
11
1
(2)
506
－
(11)
0
－
(231)
(25,450)
(911)
1,165
320
774
(23)
(537)
2
(22,394)
2
(628)
(110)
(23,130)

(9)
(65)
6
(101)
23
(3)
0
348
(21)
(31)
146

(9)
(583)
8
(101)
8,464
(0)
0
394
(712)
(4)
7,456

4,443
(2,428)13,522(6,155)
100
(278)
(1)
－
1
(54)
(541)
(10)
8,594
(909)
4,214
3,305

9,665
(7,411)
29,606(15,769)
－
(20)
(2)
(16)
68
(429)
(1,015)－
14,674
(999)
8,191
7,192

(4) Notes to Quarterly Consolidated Financial Statements(Notes on Going Concern Assumption)
Not applicable.
(Notes on Substantial Changes in the Amount of Shareholders’ Equity)
In the first two quarters, there were share-based payments of 11,000 shares to eligible parties from the sharebased payment benefits trust for directors and 100 shares to eligible parties from the share-based payment benefits
type ESOP trust. In addition, purchase of treasury shares of 972,800 shares was made by resolution at the meetingof the board of directors held on December 27, 2016 and retirement of treasury shares of 1,800,000 shares wasmade by resolution at the meeting of the board of directors held on March 24, 2017. As a result, treasury shares
decreased by 106 million yen, resulting in treasury shares at the end of the first two quarters of 770 million yen.
(Segment Information, etc.)[Segment Information]
I. First Two Quarters of Term Ended December 2016 (from January 1, 2016 to June 30, 2016)
1. Information on Net Sales and Income or Loss Amounts by Reporting Segment(Unit: million yen)Amount onquarterly
Reconciliation consolidated(Note 1)statement ofincome(Note 2)

Reporting segment
Real estatesales
business

Real estateleasingbusiness

Real estateplanning agency
and consulting
business

10,871

1,641

28

12,541－

12,541

－

－

－

－

－

－

10,871

1,641

28

12,541－

12,541

1,861

945

28

2,836

(992)

1,844

Total

Net sales
Net sales toexternal customers
Intersegment net
sales or transfers
Total
Segment income(Note 1) The reconciliation of segment income of -992 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
Not applicable.
II. First Two Quarters of Term Ending December 2017 (from January 1, 2017 to June 30, 2017)
1. Information on Net Sales and Income or Loss Amounts by Reporting Segment(Unit: million yen)Amount onquarterly
Reconciliation consolidated(Note 1)statement ofincome(Note 2)

Reporting segment
Real estatesales
business

Real estateleasingbusiness

Real estateplanning agency
and consulting
business

9,895

1,768

37

11,701－

11,701

－

－

－

－

－

－

9,895

1,768

37

11,701－

11,701

2,732

857

37

3,626

(1,256)

2,369

Total

Net sales
Net sales toexternal customers
Intersegment net
sales or transfers
Total
Segment income(Note 1) The reconciliation of segment income of -1,256 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－ 11 －

Not applicable.

－

12 －

3. Other
Status of Contracts and Sales
The performance of contracts in the real estate sales business for the first two quarters is as follows:
Second quarter of term ending Dec. 2017(from Apr. 1, 2017
to June 30, 2017)Classification
Contract amount during the period
Number of units(units)Amount(million yen)

Balance of contracts at the end of the period
Number of units(units)Amount(million yen)

Mid- to high-risehousing, etc.

209

8,987

529

21,750

Other

－

1,909

－

10,876

209

10,897529

32,627

Total(Note)

The above amounts do not include consumption tax, etc.

The main performance of sales by segment for the first two quarters is as follows:First two quarters of term ending Dec. 2017(from Jan. 1, 2017
to June 30, 2017)

Name of segment

Number of units(units)Property nameAmount(million yen)

Condominiums

41

1,987

Tonarie Seiwadai

－

3,290

Nihonbashi-kayabacho

－

2,200

Nihonbashi-bakurocho

－

1,520

2-chome, Kawaguchi, Nishi-ku－

389

Fukuoka Kasuga－

231

Detached housing

3

169

Fukuoka Kasuga District 7

－

46

Other

－

59

44

9,895

Real estate sales business

Subtotal
Real estate leasing business

1,768Real estate planning agency
and consulting business

37
Total

(Note 1) There are no transactions between segments.
(Note 2) The above amounts do not include consumption tax, etc.

－

13 －

11,701