Ichigo Preserves and Improves Real Estate[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

FY18/2 H1 Earnings
October 12, 2017
Ichigo Inc. (Tokyo Stock Exchange First Section, 2337)
Representative: Takuma Hasegawa, President
Inquiries:
Go Watanabe, Executive Managing Director
Telephone: +81-3-3502-4818
www.ichigo.gr.jp/en/
Submission of the Financial Report (Shihanki Hokokusho): October 13, 2017 (expected)
Dividend Payment: N/A
Supplemental Materials to Financial and Business Results: Yes
Financial and Business Results Briefing: Yes (for institutional investors and analysts)
1. FY18/2 H1 Consolidated Financial Results (March 1, 2017 to August 31, 2017)(1) Consolidated Financial Results
Revenue(JPY million) YOY
FY18/2 H133,386 -61.2%
FY17/2 H185,991 +488.7%

Note: Comprehensive income

Operating Profit(JPY million) YOY
12,650-15.6%
14,984 +205.0%

FY18/2 H1Net Income
per Share(diluted, JPY)
17.71

FY17/2 H1

23.79

23.67

(2) Consolidated Financial Condition
Total Assets(JPY million)
FY18/2 H1286,732
273,459

Note: Shareholders’ equity

13,834 +217.9%

11,935 +182.7%

FY18/2 H1: JPY 8,801 million (-22.2% YOY)
FY17/2 H1: JPY 11,308 million (+193.7% YOY)

Net Income
per Share(basic, JPY)
17.74

FY17/2(YOY = year-on-year % change)
Recurring Profit
Net Income(JPY million) YOY (JPY million) YOY
11,562 -16.4%
8,873 -25.7%

Net Assets(JPY million)
88,281Equity Ratio
(%)
29.7

Net Assets per
Share (JPY)170.57

83,44329.4

159.60FY18/2 H1: JPY 85,091 million FY17/2: JPY 80,339 million

2. Dividends

FY17/2
FY18/2(Forecast)First
Quarter––

Dividend per Share (JPY)
SecondThird
FourthQuarter Quarter Quarter
–
–
5
–

–

6

Total
5
6

Changes since the previously announced forecast: None
3. FY18/2 Full-Year Consolidated Forecast (March 1, 2017 to February 28, 2018)(YOY = year-on-year % change)
Revenue
Operating Profit
Recurring Profit(JPY million) YOY(JPY million) YOY(JPY million) YOY
75,500-30.9%
20,600-5.4%
18,300-7.4%
FY18/2

FY18/2Net Income(JPY million) YOY
13,500-9.4%

Net Income per Share
(JPY)
26.98

Changes since the previously announced forecast: None
Note: Ichigo provides a full-year earnings forecast, but not a half-year forecast, because Ichigo
believes the longer full-year forecast is more consistent with global best practice and thefocus of Japan’s Corporate Governance Code on growing long-term sustainable corporate
value.
4. Other(1) Changes in significant consolidated subsidiaries(material changes in scope of consolidation):Yes

New subsidiaries (2):SA3 GK Tokumei Kumiai,
Carpe Diem GK Tokumei Kumiai
None

Subsidiaries removed from consolidation (1):(2) Changes in accounting standards/principles, changes in accounting estimates, and revisions toprevious financial statements(i) Changes in accounting standards/principles:None(ii) Changes in accounting principles other than the above:Yes(iii) Changes in accounting estimates:None(iv) Revisions of previous financial statements:None2

(3) Number of outstanding common shares(i) Number of outstanding shares including treasury shares
FY18/2 H1:503,797,700
FY17/2:503,712,300(ii) Number of treasury shares
FY18/2 H1:
4,943,000
FY17/2:
329,600(iii) Average number of outstanding shares
FY18/2 H1:
FY17/2 H1:

500,323,426
501,785,169

Note on Appropriate Use of Forecasts
Forward-looking statements contained in these materials are based on judgments regarding informationthat was available to Ichigo as of the announcement date. However, these statements involve risk anduncertainties, and actual earnings may differ significantly from the indicated forecasts.
5. Segment Information
Asset Management generates fee income via the management of Ichigo Office REIT (8975), Ichigo
Hotel REIT (3463), Ichigo Green Infrastructure Investment Corporation (“Ichigo Green,” 9282), andproviding real estate services related to real estate acquisition, operations, and disposition.
Value-Add preserves and improves real estate. Ichigo receives rental income during the period it iscarrying out its value-add, along with earning profits on sale that reflect the real estate’s higher value
after the value-add is complete.
Clean Energy is utility-scale solar power production that supplies clean energy and brings productive
use to idle land.
Other is primarily legacy securities investments that are not related to the above three segments.

3Consolidated Balance Sheet (FY18/2 H1)(JPY million)
FY17/2(Feb 28, 2017)
AssetsCurrent Assets
Cash and cash equivalents
Trade notes and accounts receivable
Operational loan investments
Operational securities investments
Real estate for sale
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Current Assets
Fixed Assets
Property, Plant, and Equipment
Buildings and structures (net)
Solar power plant equipment (net)Land
Buildings under construction
Solar power plants under construction
Other (net)Total Property, Plant, and Equipment
Intangible Assets
Goodwill
Leasehold rights
Other
Total Intangible Assets
Investments and Other Assets
Securities investments
Long-term loans receivable
Deferred tax assets
Other
Less: allowance for doubtful accounts
Total Investments and Other Assets
Total Fixed Assets
Total Assets

4

FY18/2 H1(August 31, 2017)

47,678
913
1,324
1,433
167,805
516
3,125
-453
222,344

55,491790
1,324
30
170,243
491
1,365
-30
229,707

7,375
7,246
18,627912,30885
45,6549,614
6,753
22,808190
12,609110
52,087

1,864
62
29
1,956

1,276
135
98
1,509

1,426
10
339
1,820
‐92
3,504
51,115
273,459

1,407
10
355
1,747
-91
3,428
57,024
286,732

(JPY million)
FY18/2 H1(Aug 31, 2017)

FY17/2(Feb 28, 2017)
Liabilities
Current Liabilities
Trade notes and accounts payable
Short-term loans
Short-term non-recourse loans
Bonds (due within one year)
Long-term loans (due within one year)
Long-term non-recourse loans (due within
one year)
Income taxes payable
Deferred tax liabilities
Accrued bonuses
Other current liabilities
Total Current Liabilities
Long-Term Liabilities
Bonds
Non-recourse bonds
Long-term loans
Long-term non-recourse loans
Deferred tax liabilities
Long-term security deposits received
Other long-term liabilities
Total Long-Term Liabilities
Total Liabilities
Net Assets
Shareholders’ Equity
CapitalCapital reserve
Retained earnings
Treasury shares
Total Shareholders’ Equity
Accumulated Other Comprehensive
IncomeValuation gain (loss) on other securities
Deferred gain (loss) on long-term interest rate
hedgesForeign currency translation adjustment
Total Accumulated Other Comprehensive
IncomeStock Options
Minority Interests
Total Net Assets
Total Liabilities and Net Assets

5

110
805
611
112
5,209

－
2,436
－
112
4,726

6,825

7,160

1,655
62
36
4,119
19,548

3,082
107
150
3,799
21,575632
100
91,60468,319
1,147
8,038
624
170,467
190,015576
100
110,865
54,548
1,752
8,182
849
176,874
198,450

26,65011,05642,840-15
80,532

26,655
11,05849,189-1,511
85,392

117

81

-365

-382

55

－

-192

-300

491
2,612
83,443
273,459598
2,591
88,281
286,732

Consolidated Income Statement (FY18/2 H1)(JPY million)

Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Income
Interest income
Dividend income
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expense
Mark-to-market loss on long-term interest
rate hedges
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
Gain on sale of securities investments
Gain on sale of shares in affiliates
Total Extraordinary Gains
Extraordinary Losses
Loss on disposal of fixed assets
Earthquake-related damages
Total Extraordinary Losses
Pre-Tax Net Income
Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority
Interests
Net Income

6

FY17/2 H1(Mar 1, 2016
to Aug 31, 2016)
85,991
68,522
17,4682,484
14,984

FY18/2 H1(Mar 1, 2017
to Aug 31, 2017)33,386
18,37315,013
2,362
12,650

－
11
14
26

3
26
29
59

722

596

－

305

346
107
1,175
13,834

156
87
1,146
11,562

2,427
－
2,427

－
1,221
1,221

－
242
242
16,0193,812
12,20611－
11
12,772
3,862
8,910

271

36

11,9358,873

Consolidated Income Statement (FY18/2 Q2 Stand-Alone)(JPY million)

Revenue
Cost of Goods Sold
Gross Profit
SG&A
Operating Profit
Non-Operating Income
Interest income
Dividend income
Other
Total Non-Operating Income
Non-Operating Expenses
Interest expense
Mark-to-market loss on long-term interest
rate hedges
Debt financing-related fees
Other
Total Non-Operating Expenses
Recurring Profit
Extraordinary Gains
Gain on sale of shares in affiliates
Total Extraordinary Gains
Extraordinary Losses
Loss on disposal of fixed assets
Total Extraordinary Losses
Pre-Tax Net Income
Income Taxes
Pre-Minority Interest Net Income
Net Income Attributable to Minority
Interests
Net Income

7

FY17/2 Q2(Jun 1, 2016
to Aug 31, 2016)
39,57528,71910,8561,284
9,571

FY18/2 Q2(Jun 1, 2017
to Aug 31, 2017)
20,4709,459
11,011
1,171
9,839

－
8
8
17

3
6
11
21

340

307

－

48

143
76
560
9,028

－
39
395
9,465

－
－

86
86

－
－
9,028
2,709
6,319

11
11
9,539
2,860
6,678

-30

42

6,350

6,635

Consolidated Statement of Comprehensive Income (FY18/2 H1)(JPY million)

Net Income
Other Comprehensive Income
Valuation gain (loss) on other securities
Deferred gain (loss) on long-term interest rate
hedgesForeign currency translation adjustment
Total Other Comprehensive Income
Comprehensive Income
Comprehensive income attributable toshareholders
Comprehensive income attributable to minority
interests

8

FY17/2 H1(Mar 1, 2016
to Aug 31, 2016)
12,206

FY18/2 H1(Mar 1, 2017
to Aug 31, 2017)
8,910

-589

-46

-283

-16

-25
-898
11,308

-45
-108
8,801

11,052

8,513

255

287

Consolidated Statement of Comprehensive Income (FY18/2 Q2 Stand-Alone)(JPY million)

Net Income
Other Comprehensive Income
Valuation gain (loss) on other securities
Deferred gain (loss) on long-term interest rate
hedgesForeign currency translation adjustment
Total Other Comprehensive Income
Comprehensive Income
Comprehensive income attributable toshareholders
Comprehensive income attributable to minority
interests

9

FY17/2 Q2(Jun 1, 2016
to Aug 31, 2016)
6,319

FY18/2 Q2(Jun 1, 2017
to Aug 31, 2017)
6,678

-326

-8

-71

19

-17
-415
5,903

-23
-13
6,665

5,917

6,359

-13

306

Consolidated Cash Flow Statement (FY18/2 H1)Cash Flows from Operations:Pre-tax net income
Depreciation
Share-based compensation expenses
Amortization of goodwill
Increase (decrease) in accrued bonuses
Increase (decrease) in allowance for doubtful
accounts
Interest and dividend income
Interest expense
Loss (gain) on sale of shares in affiliates
Loss (gain) on sale of securities investments
Decrease (increase) in trading notes andreceivables
Decrease (increase) in operational securities
investments
Decrease (increase) in real estate for sale
Decrease (increase) in solar power plants for sale
Decrease (increase) in advances paid
Decrease (increase) in prepaid expenses
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in security deposits received
Other
Sub-TotalInterest and dividend income received
Interest expense paid
Income taxes paid
Income taxes refunded
Net Cash from (Used for) Operations

10

FY17/2 H1(Mar 1, 2016
to Aug 31, 2016)(JPY million)
FY18/2 H1(Mar 1, 2017
to Aug 31, 2017)

16,019
460
114
70
110

12,772
359
110
50
148

‐33

‐353

‐11
722
－
-2,427‐29
596-1,221
－

‐330

‐161

2,571

1,594

37,642
－
10
399
‐318
‐581
17
‐2,466‐202
51,767
11
-634
-549
1,153
51,748‐1,638
996
980
‐25
21
‐542
‐177
‐135
1,138
14,48229-513-2,356
14
11,657

(JPY million)

Cash Flows from Investments:
Payments into time deposits
Redemptions of time deposits
Payments for securities investments
Proceeds from sale of securities investments
Acquisition of property, plant, and equipment
Acquisition of intangible assets
Payments of SPC capital contributions
Payments of security deposits
Redemptions of security deposits
Acquisition of subsidiary shares resulting inchange of consolidation scope
Sale of subsidiary shares resulting in change ofconsolidation scope
Other
Net Cash from (Used for) Investments
Cash Flows from Financing:
Net increase (decrease) in short-term loans
Net increase (decrease) in short-term
non-recourse loans
Proceeds from bond issuance
Redemption of bonds
Proceeds from long-term loans
Repayment of long-term loans
Proceeds from long-term non-recourse loans
Repayment of long-term non-recourse loans
Proceeds from employee exercise of stock options
Share buyback
Dividends paid
Repayments to minority interests
Dividends paid to minority interests
Net Cash from (Used for) Financing
Effect of Exchange Rate Changes
on Cash and Cash Equivalents
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents Resulting from
Exclusion from Consolidation
Cash and Cash Equivalents at End of Period

11

FY17/2 H1(Mar 1, 2016
to Aug 31, 2016)

FY18/2 H1(Mar 1, 2017
to Aug 31, 2017)-3,000
201
-300
6,021
-4,541
－
-2
－
5

－
－
-29
－
-1,117
-7
-18
-10
－

-93

-1,453－

2,096－-1,708

-16
-556

-778

1,087

－

-611

785
－
32,277‐51,323
4,350‐14,99429－-1,499-2,000-39‐33,193－-56
22,263-7,692
2,200-15,736
7-1,499-2,506
－
－

-11

-2

16,83528,368

8,553
41,369-1,939-781

43,264

49,141-2,544

Consolidated Cash Flow Statement (FY18/2 Q2 Stand-Alone)

Cash Flows from Operations:Pre-tax net income
Depreciation
Share-based compensation expenses
Amortization of goodwill
Increase (decrease) in accrued bonuses
Increase (decrease) in allowance for doubtful
accounts
Interest and dividend income
Interest expense
Loss (gain) on sale of shares in affiliates
Decrease (increase) in trading notes andreceivables
Decrease (increase) in operational securities
investments
Decrease (increase) in real estate for sale
Decrease (increase) in solar power plants for sale
Decrease (increase) in advances paid
Decrease (increase) in prepaid expenses
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses
Increase (decrease) in security deposits received
Other
Sub-TotalInterest and dividend income received
Interest expense paid
Income taxes paid
Income taxes refunded
Net Cash from (Used for) Operations

12

FY17/2 Q2(Jun 1, 2016
to Aug 31, 2016)(JPY million)
FY18/2 Q2(Jun 1, 2017
to Aug 31, 2017)

9,028
236
57
34
‐31

9,539
169
57
25
10

‐26

‐348

‐8
340
－

‐9
307
‐86

472

462

1,756

1,520

24,191
－
－
248
75
291
‐27
‐726
‐10
35,901
8
‐307
‐1
1,153
36,754

1,353
996
780
68
‐5
234
‐8
‐83
922
15,907
9
‐297
‐608
14
15,025

(JPY million)

Cash Flows from Investments:
Payments into time deposits
Redemptions of time deposits
Payments for securities investments
Acquisition of property, plant, and equipment
Acquisition of intangible assets
Payments of SPC capital contributions
Payments of security deposits
Redemptions of security deposits
Acquisition of subsidiary shares resulting inchange of consolidation scope
Sale of subsidiary shares resulting in change ofconsolidation scope
Other
Net Cash from (Used for) Investments
Cash Flows from Financing:
Net increase (decrease) in short-term loans
Net increase (decrease) in short-term
non-recourse loans
Proceeds from bond issuance
Redemption of bonds
Proceeds from long-term loans
Repayment of long-term loans
Proceeds from long-term non-recourse loans
Repayment of long-term non-recourse loans
Proceeds from employee exercise of stock options
Dividends paid
Net Cash from (Used for) Financing
Effect of Exchange Rate Changes
on Cash and Cash Equivalents
Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents Resulting from
Exclusion from Consolidation
Cash and Cash Equivalents at End of Period

13

FY17/2 Q2(Jun 1, 2016
to Aug 31, 2016)

FY18/2 Q2(Jun 1, 2017
to Aug 31, 2017)‐3,000201‐300‐3,496
－
－
－
5

－
－
－
‐237
‐5
‐18
－
－

‐3

‐1,453－430－‐6,593－‐1,283

‐15

507

－

‐611

785
－
6,407
‐23,819－‐4,854
7‐73‐21,562

－
‐56
3,633
‐2,5992,200-6,7131‐104‐3,742

-6

－

8,593
34,772

10,00039,232-101-91

43,264

49,141

Revenue, P&L, and Assets by Segment (Current FY18/2 H1)(March 1, 2017 to Aug 31, 2017)
Segment
Asset
Management Value-Add
Revenue
Revenue from
External
Customers
Inter-Segment
Activities or
Reclassifications
Total
Segment P&L
Segment Assets
Other
Depreciation
Increase in
Property, Plant,
and Equipment
and Intangible
Assets1
2

Clean
Energy

Other

Total

(JPY million)

AmountRecorded in
Adjustment2 Consolidated
Financial
Statements1

1,229

29,8092,241

105

33,386－33,386

566

－

－

－

566

‐566

－

1,795
999
1,385

29,81011,092
231,3252,241
596
21,864

105
‐44
1,408

33,953
12,644
255,985‐566
530,74633,386
12,650286,732

－

151

195

－

346

12

359

－

6,598

1,288

－

7,886

79

7,966

Segment P&L is on an Operating Profit basis.
The Adjustment to Segment P&L (JPY 5 million) reflects transaction eliminations and corporate expenses thatwere not allocated to the segments. The Adjustment to Segment Assets (JPY 30,746 million) reflects
corporate assets, such as cash and reserves, that were not allocated to the segments. The Adjustment toDepreciation (JPY 12 million) reflects depreciation of corporate assets that were not allocated to the segments.
The Adjustment to Increase in Property, Plant, and Equipment and Intangible Assets (JPY 79 million) reflects
corporate assets that were not allocated to the segments.

14

Revenue, P&L, and Assets by Segment (Previous FY17/2 H1)(March 1, 2016 to Aug 31, 2016)
Segment
Asset
Management Value-Add
Revenue
Revenue from
External
Customers
Inter-Segment
Activities or
Reclassifications
Total
Segment P&L
Segment Assets
Other
Depreciation
Increase in
Property, Plant,
and Equipment
and Intangible
Assets1
2

Clean
Energy

Other

Total

(JPY million)

AmountRecorded in
Adjustment2 Consolidated
Financial
Statements1

2,460

82,3051,214

1085,991－

85,991

911

2

－

－

913

‐913

－

3,372
1,473
2,599

82,307
13,092
167,756

1,214
351
24,328

10
‐135
2,011

86,904
14,781
196,695‐913
202
32,91785,991
14,984
229,612

3

119

326

－

449

11

460

－

26

5,434

－

5,461

1

5,462

Segment P&L is on an Operating Profit basis.
The Adjustment to Segment P&L (JPY 202 million) reflects transaction eliminations and corporate expenses
that were not allocated to the segments. The Adjustment to Segment Assets (JPY 32,917 million) reflects
corporate assets, such as cash and reserves, that were not allocated to the segments. The Adjustment toDepreciation (JPY 11 million) reflects depreciation of corporate assets that were not allocated to the segments.
The Adjustment to Increase in Property, Plant, and Equipment and Intangible Assets (JPY 1 million) reflects
corporate assets that were not allocated to the segments.

15

Revenue, P&L, and Assets by Segment (Current FY18/2 Q2 Stand-Alone)(Jun 1, 2017 to Aug 31, 2017)
Segment
Asset
Management Value-Add
Revenue
Revenue from
External
Customers
Inter-Segment
Activities or
Reclassifications
Total
Segment P&L
Segment Assets
Other
Depreciation
Increase in
Property, Plant,
and Equipment
and Intangible
Assets1
2

Clean
Energy

Other

Total

(JPY million)

AmountRecorded in
Adjustment2 Consolidated
Financial
Statements1

547

18,036

1,868

18

20,470－20,470

327

－

－

－

327

‐327

－

874
495
1,385

18,036
8,823
231,325

1,868
544
21,864

18
‐1
1,408

20,7989,862
255,985‐327-2230,746

20,4709,839
286,732

－

70

92

－

163

6

169

－

6,580

452

－

7,032

70

7,103

Segment P&L is on an Operating Profit basis.
The Adjustment to Segment P&L (-JPY 22 million) reflects transaction eliminations and corporate expenses
that were not allocated to the segments. The Adjustment to Segment Assets (JPY 30,746 million) reflects
corporate assets, such as cash and reserves, that were not allocated to the segments. The Adjustment toDepreciation (JPY 6 million) reflects depreciation of corporate assets that were not allocated to the segments.
The Adjustment to Increase in Property, Plant, and Equipment and Intangible Assets (JPY 70 million) reflects
corporate assets that were not allocated to the segments.

16

Revenue, P&L, and Assets by Segment (Previous FY17/2 Q2 Stand-Alone)(Jun 1, 2016 to Aug 31, 2016)
Segment
Asset
Management Value-Add
Revenue
Revenue from
External
Customers
Inter-Segment
Activities or
Reclassifications
Total
Segment P&L
Segment Assets
Other
Depreciation
Increase in
Property, Plant,
and Equipment
and Intangible
Assets1
2

Clean
Energy

Other

Total

(JPY million)

AmountRecorded in
Adjustment2 Consolidated
Financial
Statements1

1,274

37,637658

439,575－39,575

364

1

－

－

365

‐365

－

1,639
673
2,599

37,638
8,687
167,756658
207
24,328

4
‐121
2,011

39,941
9,447
196,695‐365
124
32,917

39,575
9,571
229,612

1

62

168

－

232

3

236

－

20

3,744

－

3,765

1

3,766

Segment P&L is on an Operating Profit basis.
The Adjustment to Segment P&L (JPY 124 million) reflects transaction eliminations and corporate expenses
that were not allocated to the segments. The Adjustment to Segment Assets (JPY 32,917 million) reflects
corporate assets, such as cash and reserves, that were not allocated to the segments. The Adjustment toDepreciation (JPY 3 million) reflects depreciation of corporate assets that were not allocated to the segments.
The Adjustment to Increase in Property, Plant, and Equipment and Intangible Assets (JPY 1 million) reflects
corporate assets that were not allocated to the segments.

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