Summary of Accounts for First Two Quarters of Fiscal Year Ending December 2019
(Japanese GAAP) (Consolidated)
August 8, 2019
Listing exchange: Tokyo Stock Exchange
URL: https://www.es-conjapan.co.jp
President & Representative Director
Senior Managing Director TEL: 06 (6223) 8055
August 8, 2019－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 fiscal year ending December 2019(from January 1, 2019 to June 30, 2019)(1) Consolidated operating results(% figures show the rate of increase (decrease) compared with the same period of the previous year)

Net sales
million yen

Operating income%

million yen

First two quarters of fiscal
30,22822.7
6,788
year ending Dec. 2019
First two quarters of fiscal
24,636110.5
3,685
year ended Dec. 2018
Note:
Comprehensive income
First two quarters of fiscal
year ending Dec. 2019:
4,355 million yen [103.5%]

million yen%

million yen

%

84.2

6,197

95.0

4,293

99.9

55.5

3,178

69.2

2,148

14.3

First two quarters of fiscal
year ended Dec. 2018:
2,139 million yen [14.1%]

Dilutedearnings per share

yen

yen

62.75

62.61

31.55

31.37

(2) Consolidated financial position
Total assets
First two quarters of fiscal
year ending Dec. 2019
Fiscal year ended Dec.
2018
Reference: Equity
First two quarters of fiscal
year ending Dec. 2019:
2.

%

Basic
earnings per shareFirst two quarters of fiscal
year ending Dec. 2019
First two quarters of fiscal
year ended Dec. 2018

Profit attributable toowners of parent

Ordinary income

Net assets

Equity ratio

Book value per share

million yen

million yen%

yen

120,191

29,53024.6

431.26

109,747

27,35924.9400.4729,528 million yen

Fiscal year ended Dec.
2018:

27,358 million yen

Dividends
End ofsecond quarter

Annual dividend
End ofthird quarter

yen

yen

yen

yen

yen

Fiscal year ended Dec. 2018－－
Fiscal year ending Dec. 2019
Fiscal year ending Dec. 2019
(Forecast)(Note) Revisions from latest dividends forecast: None

0.00
0.00

－

32.00

32.00

－

35.00

35.00

End offirst quarter

3.

Year-end

Total

Consolidated earnings forecast for fiscal year ending December 2019 (from January 1, 2019 to December 31, 2019)(% figures for the full fiscal year show the rate of increase (decrease) compared with the previous period.)

Net sales
million yen%

Operating income

Ordinary income

Profit attributable to
Basicowners of parent earnings per share

million yen%

million yen%

million yen

%

yen

8.1

11,200

6.7

7,800

7.9

113.95Full fiscal year
74,80037.7
12,500(Note) Revisions from latest earnings forecast: None*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 quarters
1) Number of shares issued and outstanding
71,806,887 Fiscal year ended 71,649,387
of fiscal year(including treasury shares) at end of period
shares Dec. 2018
sharesending Dec. 2019
First two quarters
3,334,900 Fiscal year ended 3,334,900
2) Number of treasury shares at end of period of fiscal year
shares Dec. 2018
sharesending Dec. 2019
First two quarters
First two quarters
68,435,343
68,107,551
3) Average number of shares during periodof fiscal yearof fiscal year
sharessharesending Dec. 2019
ended Dec. 2018
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 fiscal year ending December 2019: 487,200 shares in the share-based payment benefits trust for directors
and 234,300 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 fiscal year ending
December 2019: 721,500 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; (3) Explanation of Consolidated
Earnings Forecast and Other Forward-Looking Information” on page 4.

○Contents of Attachment
1. Qualitative Information on Quarterly Results ................................................................................................................... 2(1) Explanation of Operating Results ............................................................................................................................... 2(2) Explanation of Financial Position ................................................................................................................................ 4(3) Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information ......................................... 5
2. Quarterly Consolidated Financial Statements and Key Notes ........................................................................................... 6(1) Quarterly Consolidated Balance Sheet ........................................................................................................................ 6(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income ...... 8(Quarterly Consolidated Statement of Income) .............................................................................................................. 8(Quarterly Consolidated Statement of Comprehensive Income) .................................................................................... 9(3) Quarterly Consolidated Statement of Cash Flows ...................................................................................................... 10(4) 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.) ......................................................................................................................................... 12(Significant Subsequent Events) .................................................................................................................................. 13
3. Other ............................................................................................................................................................................... 15
Status of Contracts and Sales ...................................................................................................................................... 15-1-

Attachment
1. Qualitative Information on Quarterly Results(1) Explanation of Operating Results
In the first two quarters, the Japanese economy showed potential to maintain a moderate recovery despite someweakness seen in exports and production, due in part to various governmental measures proving effective amid
ongoing improvement in the employment and income situation. The economic outlook remains clouded, however, as
the situation calls for attention to the impact of the U.S.-China trade friction on the world economy as well as
uncertainties in overseas economies, including downside risk in the Chinese economy in addition to the effects of theconsumption tax hike and fluctuation in the financial and capital markets, among other factors.
The real estate industry in which the ES-CON JAPAN Group operates held firm due in part to low interest rates
from monetary easing policies, yet the situation warrants no optimism because of such factors as a rise in land prices,intensified competition in acquiring land and construction costs remaining high.
In the business environment described above, we are proactively developing multifaceted businesses in the current
fiscal period (fiscal period ending December 2019) as the final fiscal year of the second medium-term management
plan “IDEAL to REAL 2019” that started from the fiscal year ended December 2017.
1) Listing of ESCON JAPAN REIT Investment Corporation
Investment units issued by ESCON JAPAN REIT Investment Corporation (hereinafter “ESCON REIT”), of whichasset management is entrusted to ES-CON Asset Management Ltd., a consolidated subsidiary of ES-CON
JAPAN, listed on the Tokyo Stock Exchange Real Estate Investment Trust Securities Market in February 2019.
ESCON REIT is a diversified J-REIT that mainly invests in “everyday life-based” commercial facilities closely
associated with the local community and in land with leasehold interest for such commercial facilities.
ES-CON JAPAN Group intends to fully support enhancement of earnings and stable growth of ESCON REIT asa sponsor and aims for further growth. In addition, Chubu Electric Power Co., Inc. (hereinafter “Chubu ElectricPower”) is a support company of ESCON REIT.
2) Business Development in the Chubu Region
ES-CON JAPAN concluded a business partnership agreement with Chubu Electric Power in August 2018 toposition the Chubu region as a core business area comparable to the Tokyo metropolitan area and the Kansai
region, and established a Nagoya branch in March 2019. ES-CON JAPAN acquired a site for a condominium in
Higashi Ward, Nagoya City in June 2019, the first such case in the Chubu region, and intends to develop thebusiness to contribute to regional revitalization.
3) Opening of Community-based Shopping Center, “tonarie Toga-Mikita”“tonarie Toga-Mikita,” a community-based commercial facility developed by ES-CON JAPAN in Sakai City,
Osaka, opened in April 2019. Serving as a terminal of “bustle and interaction” for the residents of the Toga-Mikita
area, it provides a place where a wide range of generations, from small children to the elderly, can enjoy
themselves, and supports their everyday life. ES-CON JAPAN will continue to develop community-based
commercial facilities such as this and contribute to society through regional revitalization and community
development.
4) Acquisition of Shares of Detached House Business Companies
In July 2019, ES-CON JAPAN acquired shares of two companies operating mainly in Saitama Prefecture—
One's Own House Co., Ltd., which sells detached houses, and Rise Home Co., Ltd., which builds detachedhouses—making them fully-owned subsidiaries.
Saitama is an attractive market in the metropolitan area where steady growth is expected as a commuter region
for central Tokyo and is believed to contribute to greater business expansion in the metropolitan area. Based on
this idea, ES-CON JAPAN seeks to strengthen its real estate development business centering on condominiums
and detached houses in Saitama.
5) Overseas Investment Business
In March 2019, ES-CON JAPAN made a commitment to a Hawaii-focused closed-end real estate investment-2-

fund as its new business. In addition, ES-CON JAPAN established its subsidiary ESCON JAPAN (Thailand) CO.,LTD. in Thailand in July, participating in a condominium joint development project while jointly investing in a
Thailand fund through mezzanine finance. As such, ES-CON JAPAN has embarked on development of its
overseas business.
6) Business Development by Segmenta. 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.
In the real estate sales business, sales of new projects “Le JADE Toyoda Master Hills (Hino City, Tokyo; 63 units
in total),” “Le JADE Utsukushigaoka (Aoba Ward, Yokohama City; 90 units in total),” “Le JADE Nishinomiya
Kitaguchi Hinokuchi-cho (Nishinomiya City, Hyogo Prefecture; 94 units in total)” and “Le JADE Takatsuki Miyanocho(Takatsuki City, Osaka Prefecture; 99 units in total)” etc. started while “Le JADE Sumakaihin Koen (Suma Ward,
Kobe City; 30 units in total),” “Le JADE Shinkanaoka Park Fields (Kita Ward, Sakai City; 204 units in total)” and“Grand Le JADE Takatsuki Tenjin (Takatsuki City, Osaka Prefecture; 28 units in total)” scheduled for completion in
the current fiscal year and “Le JADE Kuzuha (Hirakata City, Osaka Prefecture; 78 units in total)” scheduled forcompletion in the next fiscal year are contracted to sell out.
Furthermore, for the hotel development projects incorporating inbound tourism needs, sales of 2 projects
developed in Chuo Ward, Osaka City have completed.
In the commercial development business, ES-CON JAPAN acquired “Tsukuba Q’t” and “Tsukuba MOG” in
December 2018 and “Tsukuba Creo” in March 2019, which are commercial facilities in Tsukuba City, Ibaraki
Prefecture. Utilizing multifaceted real estate development expertise accumulated to date, ES-CON JAPAN will
promote Tsukuba Station-front development through utilizing the three facilities that can contribute to the local area
in an integrated manner.
Furthermore, in the logistics development business, ES-CON JAPAN is steadily promoting diversification of its
business including endeavors on developing new business fields with an eye on the next era and globalization, withthe launch of a new logistics facility brand “LOGITRES.”
As such, ES-CON JAPAN conducted business operations in a steady and proactive manner, acquiring new
business sites and a commercial facility for 2 projects in the Tokyo metropolitan area, 5 projects in the Kinki region,
2 projects in the Chubu region and 1 project in other areas in the first two quarters, to be used as the site for forsale, commercial and other multifaceted development.
b.

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.

c.

In the real estate planning agency and consulting business, focus is placed on being 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, ES-CON JAPAN achieved net sales of 30,228 million yen (up 22.7%), operating income of 6,788 million
yen (up 84.2%), ordinary income of 6,197 million yen (up 95.0%) and profit attributable to owners of parent of 4,293
million yen (up 99.9%) for the first two 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 promoting condominium sales and selling real estate for salesuch as commercial facilities and hotels, resulting in net sales of 27,763 million yen (up 21.8%) and segment incomeof 6,992 million yen (up 79.8%).

-3-

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 2,392 million yen (up 56.8% compared with the same period of the previous year) andsegment income of 1,536 million yen (up 64.9% compared with the same period of the previous year).
3)

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 72 million yen (down 77.7%) and segment income of 60 million
yen (down 80.3%).
(2) Explanation of Financial Position
ES-CON JAPAN has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (AccountingStandards Board of Japan “ASBJ” Statement No. 28; February 16, 2018) since the beginning of the consolidated
accounting period for the first quarter, and the status of its financial position is analyzed through comparison with theprevious consolidated accounting fiscal year based on figures arrived at through retroactive application of theaccounting standard, etc.
1)

Financial position

Assets at the end of the first two quarters increased by 10,444 million yen compared with the end of the previous
fiscal year to 120,191 million yen. This was mainly attributable to cash and deposits increasing by 1,624 million yen
and inventories increasing by 7,677 million yen while part of real estate for sale in process (8,410 million yen) wastransferred to buildings and structures (504 million yen) and land (7,905 million yen) due to a change in the purposeof holding the real estate.
Liabilities increased by 8,273 million yen compared with the end of the previous term to 90,661 million yen. Thiswas mainly attributable to long-term loans payable, short-term loans payable and bonds payable increasing by 8,281
million yen.
Net assets increased by 2,170 million yen compared with the end of the previous fiscal year to 29,530 million yen.
This was attributable to cash dividends paid of 2,209 million yen, while recording profit attributable to owners of parentof 4,293 million yen. As a result, the equity ratio was 24.6% (24.9% at the end of the previous fiscal year).
2)

Cash flows
Cash and cash equivalents (“net cash”) at the end of the first two quarters increased by 1,593 million yen comparedwith the beginning of the fiscal year to 18,156 million yen (13,489 million yen at the end of the same period of theprevious fiscal year).
The following outlines the cash flows and the factors of change in cash flows in the first two quarters.
(Cash flows from operating activities)
Cash flows from operating activities decreased by 3,650 million yen (net cash used in operating activities of 10,465
million yen in the same period of the previous fiscal year). This was mainly attributable to profit before income taxes of
6,197 million yen, increase in inventories of 8,229 million yen and income taxes paid of 1,379 million yen.
(Cash flows from investing activities)
Cash flows from investing activities decreased by 839 million yen (134 million yen used in investing activities in thesame period of the previous fiscal year). This was mainly attributable to purchase of investment securities of 1,073
million yen.
(Cash flows from financing activities)
Cash flows from financing activities increased by 6,083 million yen (13,175 million yen provided by financing
activities in the same period of the previous fiscal year). This was mainly attributable to proceeds from andrepayments of long-term loans payable and short-term loans payable amounting to net proceeds of 8,301 million yen
and payment of cash dividends of 2,205 million yen.

-4-(3) Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information
The consolidated earnings forecast remains unchanged from the forecast announced on February 8, 2019.

-5-

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

Fiscal year ended
Dec. 2018(as of Dec. 31, 2018)
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
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-(Unit: million yen)First two quarters offiscal year ending
Dec. 2019(as of Jun. 30, 2019)16,598491
15,30865,8906,353
104,642

18,223525
2,909
77,556
6,874
106,089

1,459
(462)
997
623
151
(113)
38
1,658

1,989
(489)
1,499
8,528
184
(125)
59
10,087

30
30

31
31

3,453
(37)
3,415
5,104
109,747

4,020
(37)
3,982
14,101
120,191

Fiscal year ended
Dec. 2018(as of Dec. 31, 2018)
Liabilities
Current liabilities
Short-term loans payable
Current portion of long-term loans payable
Current portion of bonds
Income taxes payable
Asset retirement obligations
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 offiscal year ending
Dec. 2019(as of Jun. 30, 2019)

1,720
23,993
40
1,448
33
9,973
37,2102,009
33,529
40
2,007
33
9,136
46,756

270
44,5689730
77
132
45,17682,387250
43,045
109
30
83
385
43,904
90,661

6,259
1,988
20,310(1,207)27,3526,272
2,001
22,395(1,207)
29,4616
6
127,359109,747

67
67
129,530120,191

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income(Quarterly Consolidated Statement of Income)First two quarters offiscal year ended
Dec. 2018(from Jan. 1, 2018
to Jun. 30, 2018)
24,636
18,299
6,336
2,651
3,685

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
Other
Total non-operating expenses
Ordinary income
Extraordinary income
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-8-(Unit: million yen)First two quarters offiscal year ending
Dec. 2019(from Jan. 1, 2019
to Jun. 30, 2019)30,22820,896
9,331
2,543
6,788

0
2
6
1
9

0
2
6
0
9

492
24
516
3,178

596
3
600
6,197

0
0

0
0

4
4
3,174
14
1,011
1,026
2,148
2,148

－
－
6,197
1,912
(8)
1,903
4,293
4,293

(Quarterly Consolidated Statement of Comprehensive Income)

ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Share of other comprehensive income of entities accounted forusing equity method
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 offiscal year ended
Dec. 2018(from Jan. 1, 2018
to Jun. 30, 2018)
2,148(Unit: million yen)First two quarters offiscal year ending
Dec. 2019(from Jan. 1, 2019
to Jun. 30, 2019)
4,293

(8)

40

－

20

(8)
2,139

61
4,355

2,139
－

4,355
－

(3) Quarterly Consolidated Statement of Cash FlowsFirst two quarters offiscal year ended
Dec. 2018(from Jan. 1, 2018
to Jun. 30, 2018)
Cash flows from operating activities
Profit before income taxes
Depreciation
Increase (decrease) in provision for directors’ share-based
benefits
Increase (decrease) in provision for share-based benefits
Interest and dividend income
Interest expenses
Loss on retirement of non-current assets
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
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
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 -(Unit: million yen)First two quarters offiscal year ending
Dec. 2019(from Jan. 1, 2019
to Jun. 30, 2019)

3,174
39

6,197
43

15

11

2
(2)
492
4
131
(13,528)
(139)
(577)
(208)
1,513
(171)
(231)
(68)
(9,555)
2
(508)
(404)
(10,465)

－
(2)
596
－
(33)
(8,229)
(616)
(418)
(182)
229
(2)
656
59
(1,690)2(583)(1,379)(3,650)

(9)
(110)
8
(45)
73
0
336
(101)
(17)
134

(9)
(1,073)
513
(75)
17
0
617
(830)
－
(839)

6,461
(1,989)21,113(11,270)
200
(20)
(0)
(16)
67
(131)
(1,236)
13,175
2,844
10,644
13,4893,270(2,981)
24,879(16,866)
－
(20)
(0)
(16)
24
－
(2,205)
6,083
1,593
16,56318,156

(4) 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)(Application of “Partial Amendments to Accounting Standard for Tax Effect Accounting”
ES-CON JAPAN has applied “Partial Amendments to Accounting Standard for Tax Effect Accounting” (AccountingStandards Board of Japan “ASBJ” Statement No. 28; February 16, 2018) since the beginning of the consolidated
accounting period for the first quarter, and deferred tax assets is indicated under the classification of investments andother assets and deferred tax liabilities under non-current liabilities.
(Change in the purpose of hold)In the first two quarters, part of real estate for sale in process (8,410 million yen) was transferred to buildings andstructures (504 million yen) and land (7,905 million yen) due to a change in the purpose of holding the real estate.

- 11 -

(Segment Information, etc.)[Segment Information]
I. First Two Quarters of Fiscal Year Ended December 2018 (from January 1, 2018 to June 30, 2018)
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

22,786

1,525

324

24,636－

24,636

－

－

－

－

－

－

22,786

1,525

324

24,636－

24,636

3,889

932

308

5,130

(1,445)

3,685

Total

Net sales
Net sales toexternal customers
Intersegment net
sales or transfers
Total
Segment income(Note 1) The reconciliation of segment income of -1,445 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 Fiscal Year Ending December 2019 (from January 1, 2019 to June 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
Real estate
Real estate
Total(Note 1)statement ofplanning agency
sales
leasingand consulting
incomebusinessbusinessbusiness(Note 2)
Net sales
Net sales toexternal customers
Intersegment net
sales or transfers
Total
Segment income

27,7632,392

72

30,228－30,228

－

－

－

－

－

－

27,7632,392

72

30,228－30,228

6,992

1,536

60

8,589

(1,801)

6,788(Note 1) The reconciliation of segment income of -1,801 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.

- 12 -

(Significant Subsequent Events)(Business Combination through Acquisition)
ES-CON JAPAN resolved at the board of directors’ meeting held on June 26, 2019, to acquire all shares ofOne's Own House Co., Ltd. and Rise Home Co., Ltd., making them subsidiaries, and concluded an agreementon the transfer of shares on the same day. The shares were acquired on July 1, 2019.
1. Overview of Business Combination(1) Name and Business Description of Acquired Companies
Name of acquired company

One's Own House Co., Ltd.
Sale of detached houses, resale

Business descriptionof used houses, etc.

Rise Home Co., Ltd.
Construction of houses, etc.

(2) Main Reason for Business Combination
One's Own House Co., Ltd. engages in sale of detached houses and Rise Home Co., Ltd. engages inconstruction of detached houses, mainly in Saitama Prefecture.
Saitama is an attractive market in the metropolitan area where steady growth is expected as a commuter
region for central Tokyo and is believed to contribute to greater business expansion in the metropolitan area.
Based on this idea, ES-CON JAPAN decided to acquire the shares (make the companies subsidiaries) withan aim to strengthen its real estate development business centering on condominiums and detachedhouses in Saitama.
(3) Date of Business Combination
July 1, 2019(4) Legal Framework of Business Combination
Acquisition of shares with cash as consideration(5) Names of the Companies after Business Combination
There are no changes to the names of the companies after business combination.
(6) Percentage of voting rights acquired
100%(7) Main Reasons for Determining Acquisition
ES-CON JAPAN’s acquisition of shares with cash as consideration
2. Breakdown of Acquisition Cost and Consideration for Acquired Companies (Total for Aforementioned Two
Companies)
Acquisition consideration

Cash

1,154 million yen

Acquisition cost

1,154 million yen

3. Major Acquisition-Related Expenses and Amount
Advisory fee/charge, etc.

46 million yen

4. Amount, Reason, Amortization Method and Amortization Period for Goodwill
Yet to be determined.
5. Breakdown of Assets Acquired and Liabilities Assumed on the Date of Business Combination
Yet to be determined.

- 13 -

(Participation in For-Sale Housing Development Project in Thailand)
ES-CON JAPAN resolved at the board of directors’ meeting held on June 28, 2019, to participate in a for-salehousing development project in Thailand, established its local consolidated subsidiary ESCON JAPAN (Thailand)CO., LTD. on July 9, 2019, and through this subsidiary acquired equity interest in ORIGIN KNIGHTSBRIDGE
THEPHARAK CO., LTD., an equity-method affiliate engaged in condominium development projects jointly withORIGIN PROPERTY PUBLIC COMPANY LIMITED, a real estate developer in Thailand (425 million yen in total.)
Furthermore, parallel to the project mentioned above, on July 12, 2019, ES-CON JAPAN invested in the Gate
City Bangkok Mezzanine Fund (business person: GCB Mezzanine GK), a silent partnership investing incondominium development projects in Bangkok, Thailand, in which Mercuria Investment Co., Ltd. has invested.
1. Establishment of Significant Subsidiary, etc.
(1) Name, business description and size of thecompany to be established

ESCON JAPAN (Thailand) CO., LTD.

(2) Date of establishment

July 9, 2019(3) Number of shares to be acquired

49,000 common shares(4) Acquisition price

490,000 THB(5) Equity ratio after acquisition

49% (effective control)

2. Acquisition of Shares(1) Name of the counterparty in the shareacquisition

ORIGIN PROPERTY PUBLIC COMPANY
LIMITED(2) Name of company whose shares are to beacquired

ORIGIN KNIGHTSBRIDGE THEPHARAK
CO., LTD.
For-sale housing development project in(3) Business description

ThailandFor-sale condominium development(4) Size of project (scheduled)(36F/B1 Residential units: 474, Shop: 1)(5) Date of share acquisition

July 31, 2019(6) Number of shares to be acquired

7,228,420 common shares(7) Acquisition price121,684,800 THB(8) Equity ratio after acquisition49%

3. Conclusion of Significant Contract, etc.
(1) Name of the counterparty of the contract

Business person: GCB Mezzanine GK(2) Date of contract conclusion

July 9, 2019
Investment in a silent partnership Gate City
Bangkok Mezzanine Fund
Committed capital: 500 million yen(3) Contract description(Invested amount: 9 million yen)
(4) Significant impact on operating activities- 14 -

Impact of the conclusion of contract is minor.

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:First two quarters of fiscal year ending Dec. 2019(from Apr. 1, 2019
to Jun. 30, 2019)
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.

183

8,145

751

31,246

Other

－

2,825

－

11,155

183

10,970751

42,401

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 fiscal year ending Dec. 2019(from Jan. 1, 2019
to Jun. 30, 2019)

Name of segment

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

Condominiums

98

5,114

Minamisenba I, Chuo-ku

－

6,580

Kita-Nagoya Pare Marche
Nishiharu

－

4,610

Asumigaoka Brand-New Mall

－

3,200

K’s Denki Oyumino shop

－

2,710

Nagahoribashi Ekimae

－

2,100

Kobe-shi Nishi-ku Mitani

－

1,430

－

946

Nishishiroi Ekimae－

451

Fukuoka Kasuga－

401

Nakano-ku Nakano－

220

Subtotal

98

27,763

Real estate sales business
Daisen-nishi Commercial II,
Sakai-shi

Real estate leasing business

2,392Real estate planning agency
and consulting business

72
Total

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

- 15 -

30,228