Summary of Accounts for First Quarter of Fiscal Year Ending December 2021
(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:April 26, 2021
Listing exchange: Tokyo Stock Exchange
URL:
https://www.es-conjapan.co.jp/english/
President & Representative Director
Senior Managing Director TEL: 06 (6223) 8055
April 26, 2021－
No
No
(Amounts are rounded down to the nearest million yen)

1.

Consolidated results for first quarter of fiscal year ending December 2021
(from January 1, 2021 to March 31, 2021)(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%

million yen

First quarter of
12,436(70.5)
1,207
fiscal year ending Dec. 2021
First quarter of
42,196116.6
9,678
fiscal year ended Dec. 2020
Note: Comprehensive income
First quarter offiscal year ending Dec. 2021:
688 million yen [-88.7%]

First quarter offiscal year ending Dec. 2021
First quarter offiscal year ended Dec. 2020%

million yen%

million yen%(87.5)

920(90.1)

647(89.9)

198.1

9,329

220.1

6,439

220.0

First quarter offiscal year ended Dec. 2020: 6,091 million yen [201.8%]

Basic
earnings per share

Dilutedearnings per share

yen

yen

9.45

9.42

94.08

93.94

(2) Consolidated financial position
Total assets

Profit attributable toowners of parent

Ordinary income

Net assets

Equity ratio

Book value per share

million yen

million yen%

yenFirst quarter offiscal year ending Dec. 2021

162,110

36,67022.6

535.54

Fiscal year ended Dec. 2020

149,423

38,62725.8

563.07

Reference: Equity
First quarter offiscal year ending Dec. 2021: 36,702 million yen
2.

Fiscal year ended Dec. 2020:

38,589 million yen

Dividends
End offirst quarter

Fiscal year ended Dec. 2020
Fiscal year ending Dec. 2021
Fiscal year ending Dec. 2021 (Forecast)(Note) Revisions from latest dividends forecast: None

Annual dividend
End of
End ofsecond quarter third quarter

Year-end

Total

yen

yen

yen

yen

yen

－
－

0.00

－

38.00

38.00

0.00

－

38.00

38.00

3.

Consolidated earnings forecast for fiscal year ending December 2021 (from January 1, 2021 to December 31, 2021)(% figures for the full fiscal year show the rate of increase (decrease) compared with the previous fiscal year, and% figures for the first two quarters show the rate of increase (decrease) compared with the same period of the previous year)

Net sales

Operating income

Ordinary income

Profit attributable to
Basicowners of parent earnings per share

million yen%

million yen%

million yen%

yenmillion yen%

First two quarters

29,400(46.5)

3,900(63.2)

3,300(67.2)

2,100(70.0)

25.82

Full fiscal year

80,0003.5

10,800(11.5)

9,400(15.8)

6,200(19.1)

70.22(Note) Revisions from latest earnings forecast: None
ES-CON JAPAN issued new shares through third-party allotment on April 5, 2021. “Basic earnings per share” in the
consolidated earnings forecast factors for the impact of the issuance of new shares. For details, please refer to“Attachment; 2. Quarterly Consolidated Financial Statements and Key Notes; (3) Notes to Quarterly Consolidated
Financial Statements (Significant Subsequent Events)” on page 15.
* Explanatory notes(1) Changes in significant subsidiaries during the first quarter(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 quarter of1) Number of shares issued and outstanding
71,961,887 Fiscal year ended 71,961,887
fiscal year ending(including treasury shares) at end of period
shares Dec. 2020
sharesDec. 2021
First quarter of
3,427,900 Fiscal year ended
3,428,400
2) Number of treasury shares at end of period fiscal year ending
shares Dec. 2020
sharesDec. 2021
First quarter ofFirst quarter of
68,533,745
68,447,187
3) Average number of shares during period
fiscal year ending
fiscal year ended
sharessharesDec. 2021
Dec. 2020
Note: The number of treasury shares at end of period includes shares of ES-CON JAPAN held in a board benefit
trust for executives and a share-based payment benefits-type ESOP trust (first quarter of fiscal year ending
December 2021: 851,000 shares in the board benefit trust for executives and 232,500 shares in the sharebased payment benefits-type ESOP trust). In the calculation of the average number of shares during period,
the treasury shares to be subtracted in that calculation includes shares of ES-CON JAPAN held in the board
benefit trust for executives and the share-based payment benefits-type ESOP trust (first quarter of fiscal year
ending December 2021: 1,083,741 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 7.

○ 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 ............................................................................................................................... 7(4) Explanation of Consolidated Earnings Forecast and Other Forward-Looking Information......................................... 7
2. Quarterly Consolidated Financial Statements and Key Notes ......................................................................................... 8(1) Quarterly Consolidated Balance Sheet ...................................................................................................................... 8(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income .. 10(Quarterly Consolidated Statement of Income) ............................................................................................................ 10(Quarterly Consolidated Statement of Comprehensive Income) .................................................................................. 11(3) Notes to Quarterly Consolidated Financial Statements ........................................................................................... 12(Notes on Going Concern Assumption)........................................................................................................................ 12(Notes on Substantial Changes in the Amount of Shareholders’ Equity) ..................................................................... 12(Additional Information) ................................................................................................................................................ 12(Segment Information, Etc.) ......................................................................................................................................... 14(Significant Subsequent Events) .................................................................................................................................. 15
3. Other ............................................................................................................................................................................. 16
Status of Contracts and Sales ....................................................................................................................................... 16- 1 -Attachment
1.

Qualitative Information on Quarterly Results(1) Business Risks
There are no business risks that newly arose in the first quarter.
In addition, there are no significant changes in the business risks stated in the previous fiscal year’s securities
report.
(2)

Explanation of Operating Results

In the first quarter, the Japanese economy remained in an unpredictable situation due to the spread of COVID-19 as it
is still unforeseeable when the pandemic will end even though the declaration of a state of emergency that wasissued again in January 2021 was lifted in March 2021.
In the real estate industry in which the ES-CON JAPAN Group operates, the real estate market showed relatively
stable performance with no substantial deterioration as the policies and measures related to tackling COVID-19 andmonetary easing measures continued. However, how the COVID-19 developments as social and economic activities
are resumed in phases while taking preventive measures against the spread of COVID-19 will impact the Japaneseand overseas economies and the real estate market is extremely difficult to predict.
Despite the difficult business environment described above, we made strategic moves towards expansion of new
business fields and sustainable growth by taking the current situation as an opportunity to develop our business.
We concluded a new capital and business partnership agreement with Chubu Electric Power Co., Inc. (hereinafter“Chubu Electric Power”) in February 2021 for purposes of which include promoting further strengthening of thepartnership, and issuance of new shares through third-party allotment to Chubu Electric Power (hereinafter “capitalincrease through third-party allotment”) was approved at the 26th Regular General Meeting of Shareholders held inMarch 2021. With the implementation of the capital increase through third-party allotment (payment completed on
April 5, 2021) resulting in Chubu Electric Power owning 51.54% of the voting rights, ES-CON JAPAN is now aconsolidated subsidiary of Chubu Electric Power.
We assessed that becoming a consolidated subsidiary of Chubu Electric Power, which boasts strong corporate
credit standing, through the capital increase through third-party allotment will allow diversification of fundraising
methods and reduce fundraising costs by improving our creditworthiness. The move will also enable participation inlarge-scale urban-development projects through further business partnerships with the Chubu Electric Power Group.
This will make it possible for us to increase our corporate value still further by stabilizing and expanding our earnings
base, enhancing management stability, and so forth.
In conjunction, we formulated “IDEAL to REAL 2023,” the fourth medium-term management plan, for the three-year
period from the fiscal year ending December 2021 through the fiscal year ending December 2023. The new mediumterm management plan sets “Establishing business foundations able to withstand unexpected changes in economic
conditions” and “Simultaneously changing the revenue structure and expanding business domains” as management
strategies.
1)

Formulation of Fourth Medium-Term Management Plan
1. Basic Management Strategy Policies(1) Establishing business foundations able to withstand unexpected changes in economic conditions
Establishing business and financial standings that would be sound and enable us to maintain our fundraising abilities under any economic conditions(2) Simultaneously changing the revenue structure and expanding business domains
Transforming the revenue structure from one based on flows to one based on stock by strengthening thereal estate leasing business while at the same time realizing business diversification and expanding
business territories
2. Basic Policy: Transformation and Rapid ProgressTransformation
・Proactive investment in long-term revenue-generating real estate and improving the structure of thebalance sheet
・Transforming the focus of management from flows to stock- 2 -Rapid Progress・Demonstrating synergies in the Chubu Electric Power Group・Achieving net sales of 110 billion yen and operating income of 16 billion yen (in the final fiscal year of themedium-term management plan)
3. Management Strategies(1) Transformation to a structure of sustained and stable revenues(2) Stable growth in existing core businesses through business diversification and area strategies(3) Growing new businesses into core businesses through business diversification and area strategies(4) Taking on the challenges of new business domains(5) Enhancing synergies within the ES-CON JAPAN Group(6) Expanding facilities, primarily in the five largest urban areas(7) Enhancing synergies within the Chubu Electric Power Group(8) Promoting ESG initiatives
4. Performance Plan
(Unit: million yen)
Fiscal year ending
Dec. 2023
Plan

Fiscal year ended
Dec. 2020
ActualFiscal year ending
Dec. 2021
Plan

Fiscal year ending
Dec. 2022
Plan

Net sales

77,30880,00098,000110,000

Operating income

12,202

10,80014,00016,0005. Management Targets
Fiscal year
ended
Dec. 2020
ActualFiscal year
endingDec. 2021
Plan

Fiscal year
endingDec. 2022
Plan

Fiscal year
endingDec. 2023
Plan

Share of profits from leasing *2

14.2%

23.0%

24.0%

26.0%

Return on equity (ROE)

21.2%

12.0%

13.0%

13.0%

Return on invested capital (ROIC) *1

6.6%

4.0%

4.0%

4.0%

Equity ratio

25.8%

29.0%

26.0%

23.0%

Share of long-term earnings from real estate *3

9.5%

12.0%

14.0%

18.0%

Net assets

38.6 billion yen 61.0 billion yen 66.0 billion yen 72.0 billion yen*1

Return on invested capital (ROIC):*2

After-tax operating income ÷ (Shareholders’ equity + Interest-bearing liabilities)
Share of profits from leasing:*3

Leasing segment profits ÷ Segment total profits (not including adjustments)
Share of long-term earnings from real estate:
Real estate generating leasing revenues recorded as non-current assets ÷ Net assets

6. Investment Plan
(Unit: million yen)
3-yearcumulative
total
Plan

Fiscal year
endingDec. 2021
Plan

Fiscal year
endingDec. 2022
Plan

Fiscal year
endingDec. 2023
Plan

Investment in revenue-generating real estate

30,00040,00060,000130,000

Investment in other development

25,00030,00035,00090,000Gross investment

55,00070,00095,000220,000

- 3 -

2)

Status of Demonstration of Synergy Effect with the Chubu Electric Power GroupWe concluded a capital and 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. Since the establishment, we have already acquired land
for nine new projects in the Chubu Region.
Furthermore, as joint projects with Chuden Real Estate Co., Inc. (hereinafter “Chuden Real Estate”), welaunched condominium/commercial development projects in Shirakabe, Higashi Ward, Nagoya City; Ichinomiya
City, Aichi Prefecture; Kakegawa City, Shizuoka Prefecture; and Suita City, Osaka Prefecture.
Now a consolidated subsidiary of Chubu Electric Power, we intend to proactively work on large-scale urban
development and realization of “New Norm Neighborhoods” not only in the Chubu region but expanding to acrossJapan by strengthening the partnership with the Chubu Electric Power Group.

3)

Progress of Projects under Hokkaido Ballpark Concept
With regard to the naming rights for “ES CON FIELD HOKKAIDO,” the new ballpark of the Hokkaido Nippon-Ham
Fighters planned to be established and opened in 2023 in Kitahiroshima City, Hokkaido, we concluded a ballpark
naming rights agreement with Hokkaido Nippon-Ham Fighters Baseball Club Co., Ltd. and Fighters Sports &Entertainment Co., Ltd. in January 2020.
The area surrounding the new ballpark is a large-scale development area for HOKKAIDO BALLPARK F
VILLAGE (total development area: approx. 36.7 ha) with construction of a new station also planned. We areparticipating in Japan’s first ballpark development, engaging in the development of various real estate in the areasuch as a hotel on the land of approximately 9,400 m 2 adjoining the ballpark.
In addition, we concluded a partnership agreement for the JR Kitahiroshima Station “West Exit Area
Revitalization Project” in Kitahiroshima City, Hokkaido, with the City of Kitahiroshima on March 30, 2021.
Expectations are increasingly building for JR Kitahiroshima Station as a key access point to the ballpark being
situated between JR Sapporo Station and New Chitose Airport Station in a highly convenient location
approximately 20 minutes from the airport and approximately 16 minutes from Sapporo by train. Leveraging suchlocation and our development expertise such as from the for-sale condominium and commercial facility
development conducted in the station vicinity to date, we will engage in not only development of the ballpark area
but also development of the area surrounding Kitahiroshima Station, the gateway to such, and thereby promote
community-based urban development that would create bustle throughout Kitahiroshima City.
Continuing to also support sports, cultural promotion, etc., we will contribute to revitalization and development of
the entire Hokkaido region for the happiness of its residents.

4)

Status of Implementation of Growth Strategy of ESCON JAPAN REIT Investment Corporation
ESCON JAPAN REIT Investment Corporation (hereinafter “EJR”), which entrusts asset management to ES-CON
Asset Management Ltd. (hereinafter “EAM”), a consolidated subsidiary of ES-CON JAPAN, conducted a public
offering, its first since listing, in February 2020 and increased its asset size from 41.6 billion yen upon listing to51.9 billion yen after the public offering, steadily expanding the asset size.
The ES-CON JAPAN Group fully supports enhancement of earnings and stable growth of EJR as its sponsor
and aims for further growth.

5)

Initiatives for Formation of Private REIT
We intend to form and commence operation of a private real estate investment corporation (private REIT) with
EAM as the company entrusted with asset management in fiscal 2021. To that end, we formed private funds
operating rental apartments in Higashiyamato City, Tokyo, and Fujisawa City, Kanagawa Prefecture, and Inagi City,
Tokyo, in 2020 in cooperation with NISSHIN FUDOSAN Company, Limited. We then formed the fourth, operatingin Isehara City, Kanagawa Prefecture, in January 2021.

6)

Launch of Sale of Permanent Use Rights and Management of Columbarium
We launched management of an urban columbarium in Minato Ward, Tokyo, in October 2020 to solve issues inmodern society, such as a shortage of burial grounds due to a large number of deaths resulting from aging
population, the situation in which there will be nobody to look after graves due to small families with fewer children,and particularly the situation in which having a grave in central Tokyo is extremely difficult. We launched sale ofpermanent use rights of the columbarium in March 2021.
- 4 -

7)

Status of ESG Initiatives
We have set “Address social issues through promotion of ESG initiatives” as one of our key corporate strategies.

a. Environment (E)・EcoAction 21 Certification
In May 2020, we 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 such activities
also bring benefits to management, such as cost reduction and improved productivity, and contribute to theenhancement of corporate value.
・Green Buildings
In July 2020, “tonarie Yamato-Takada” and “tonarie Toga-Mikita,” which are commercial facilities developed by
ES-CON JAPAN and owned by EJR, obtained DBJ Green Building Certification (a certification system created by
Development Bank of Japan Inc. (hereinafter “DBJ”) in April 2011 to support real estate properties withenvironmental and social awareness (“Green Buildings”)) from DBJ. These were followed also by “tonarie
Minamisenri” and “tonarie Seiwadai” in February 2021.
・“Rank S” Certification for CASBEE for Real Estate
In July 2020, “Soyoca Fujimino,” a commercial facility owned by ES-CON JAPAN, obtained “Rank S,” the highest
rank of the Certification for CASBEE (*) for Real Estate from a CASBEE accreditation body authorized by theInstitute for Building Environment and Energy Conservation.
* CASBEE (Comprehensive Assessment System for Built Environment Efficiency) is a system to comprehensively assess the qualityof 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 environmentally-friendly materials, but also comfort in the building,and its visual impact on the area.

・ZEH Builder
In November 2020, ES-CON Home Co., Ltd. and ES-CON Craft Co., Ltd., which are consolidated subsidiaries of
ES-CON JAPAN, were registered for ZEH Builder Certification.
・Received Award for Excellence in the Environmental Human Resource Development Corporate Awards
In March 2021, we received the Award for Excellence in the Environmental Human Resource Development
Corporate Awards 2020 (recognizing companies leading the way in developing environment-related humanresources) hosted by the Ministry of the Environment and the Environmental Consortium for Leadership
Development (EcoLeaD). The Awards were created in a fiscal 2014 project by the Ministry of the Environment
with an aim to encourage Japanese companies to engage in and train human resources for environmentallyfriendly business management and increase the number of companies contributing to comprehensive
improvement of the environment, economy and society, considering the situation where efforts toward asustainable society have become essential.
b. Social (S)・Contributing to Healthcare
We have been providing monetary donations since 2020 to Kyoto University’s “iPS Cell Research Fund” tosupport activities realizing provision of early and inexpensive treatment using iPS cells for many people sufferingfrom diseases and accidents.
We have also been providing monetary donations since 2019 to Osaka University’s Graduate School of
Medicine as support for clinical trials of cancer vaccines showing promise for the treatment of cancer.
c. Governance (G)・Establishment of Voluntary Committee on Nomination and Remuneration of Directors
In January 2020, we established the “Nomination and Remuneration Advisory Committee” with an aim tostrengthen the independence and objectivity of functions as well as the accountability of the board of directors
with regard to nomination and remuneration of directors and other matters.
・Nurturing Successors
We also launched initiatives for a succession plan called the candidate successor system. In January 2021, wenewly appointed seven employed executive officers.
- 5 -・Diversity of the Board of Directors
In order to secure diversity of the board of directors, two independent directors, of which one is experienced incorporate management and one is a female securities analyst, were appointed at the 26th Regular General
Meeting of Shareholders held on March 26, 2021, for a diverse board composition.
In addition, the skills matrix for directors is disclosed in the corporate governance report.
d. Other
In March 2020 and December 2020, we procured funds through “ESG/SDG assessment-based loans” provided by
Sumitomo Mitsui Banking Corporation. Deemed to be “implementing good ESG and SDG initiatives andinformation disclosure,” each earned an overall ranking that is the third-best ranking out of seven. Combined, 6.5
billion yen was procured for two projects.
8)

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 condominium sales business, we commenced selling new sales projects, including “Le JADE Hirano”(Hirano Ward, Osaka City; 58 units in total), “Le JADE Uehonmachi” (Tennoji Ward, Osaka City; 56 units in total)and “Le JADE Tsukuba Station Front” (Tsukuba City, Ibaraki Prefecture; 218 units in total). “Le JADE
Nagaikoendori” (Sumiyoshi Ward, Osaka City; 108 units in total) is contracted to sell out.
In the Kyushu area as well, we acquired land for a new sales project (Minami Ward, Fukuoka City), our first in
the area, and “Suroy Mall Nagamine” (a commercial facility in Kumamoto City, Kumamoto Prefecture).
In the real estate leasing business, efforts are being made to secure stable rental income from commercial
facilities owned by ES-CON JAPAN and to enhance their asset value. Such efforts included newly acquiring“tonarie Yokkaichi” (a community-based shopping center in Yokkaichi City, Mie Prefecture) and “Fuji Grand
Natalie” (a commercial facility in Hatsukaichi City, Hiroshima Prefecture).
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, operating results for the first quarter were net sales of 12,436 million yen (down 70.5%), operating incomeof 1,207 million yen (down 87.5%), ordinary income of 920 million yen (down 90.1%) and profit attributable to ownersof parent of 647 million yen (down 89.9%), all compared with the same period of the previous year.
The following describes the operating results by each segment (comparisons are with the same period of the previousyear).
1)

Real estate sales businessIn the real estate sales business, activities included selling condominiums and revenue-generating real estate, but
resulted in net sales of 10,723 million yen (down 73.7%) and segment income of 1,750 million yen (down 83.4%).

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 realestate, resulting in net sales of 1,599 million yen (up 23.0%) and segment income of 687 million yen (up 47.8%).

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 the best use of planning and multifacetedbusiness building abilities, but resulted in net sales of 113 million yen (up 65.3%) and segment loss of 6 million
yen (segment income of 44 million yen in the same period of the previous year).

- 6 -

(3)

Explanation of Financial Position

Assets at the end of the first quarter increased by 12,687 million yen compared with the end of the previous fiscal
year to 162,110 million yen. This was mainly attributable to cash and deposits decreasing by 2,531 million yen, andinventories and non-current assets increasing by 11,122 million yen and 2,144 million yen, respectively.
Liabilities increased by 14,644 million yen compared with the end of the previous fiscal year to 125,440 million yen.
This was mainly attributable to long-term loans payable, short-term loans payable and bonds payable increasing by
13,348 million yen.
Net assets decreased by 1,957 million yen compared with the end of the previous fiscal year to 36,670 million yen.
This was mainly attributable to cash dividends paid of 2,645 million yen, while recording profit attributable to ownersof parent of 647 million yen. As a result, the equity ratio was 22.6% (25.8% 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 February 24, 2021.
In addition, as mentioned earlier in this document, we announced the fourth medium-term management plan, which
is for the three-year period from the fiscal year ending December 2021 through the fiscal year ending December 2023.
Details are as presented earlier in this document.

- 7 -

2.

Quarterly Consolidated Financial Statements and Key Notes(1) Quarterly Consolidated Balance Sheet(Unit: million yen)First quarter offiscal year ending
Dec. 2021(as of Mar. 31, 2021)

Fiscal year ended
Dec. 2020(as of Dec. 31, 2020)
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Real estate for sale
Real estate for sale in process
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
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- 8 -23,870927
6,262
82,3168,739(0)122,117

21,338
1,061
10,322
89,37810,558(0)132,659

4,359
(889)
3,470
11,262
335
(191)
143
14,876

5,549
(993)
4,556
12,326
336
(203)
133
17,015

339
63
403

315
61
376

12,064(37)
12,02627,306
149,423

12,096(37)
12,05829,450162,110(Unit: million yen)First quarter offiscal year ending
Dec. 2021(as of Mar. 31, 2021)

Fiscal year ended
Dec. 2020(as of Dec. 31, 2020)
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
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

- 9 -

2,907
26,093
230
1,460
9,121
39,813

5,373
31,24610244
11,03247,906

69,274
135
46
260
1,265
70,982
110,795

75,225
135
49
260
1,862
77,533
125,440

6,284
2,088
31,429(1,348)38,454

6,284
2,088
29,432(1,348)36,456

153

258

(18)

(13)

134

245

1
37
38,627
149,423

1(32)
36,670162,110

(2) Quarterly Consolidated Statement of Income and Quarterly Consolidated Statement of Comprehensive Income(Quarterly Consolidated Statement of Income)First quarter of fiscal year ending December 2021

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Penalty income
Foreign exchange gains
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 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
ProfitLoss attributable to non-controlling interests
Profit attributable to owners of parent

First quarter offiscal year ended
Dec. 2020(from Jan. 1, 2020
to Mar. 31, 2020)
42,19630,281
11,914
2,235
9,678(Unit: million yen)First quarter offiscal year ending
Dec. 2021(from Jan. 1, 2021
to Mar. 31, 2021)
12,436
9,080
3,356
2,149
1,207

4
0
3
－
0
8

3
0
6
53
2
65

293

309

27

23

37
357
9,329

20
352
920

0
0

0
0

0
0
9,329
2,772
118
2,890
6,439
－
6,439

－
－
920
226
116
342
577
(70)
647

- 10 -

(Quarterly Consolidated Statement of Comprehensive Income)First quarter of fiscal year ending December 2021

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 quarter offiscal year ended
Dec. 2020(from Jan. 1, 2020
to Mar. 31, 2020)
6,439(Unit: million yen)First quarter offiscal year ending
Dec. 2021(from Jan. 1, 2021
to Mar. 31, 2021)
577

(375)

105

16

(8)

10

13

(347)
6,091

110
688

6,091

758

－

(70)

- 11 -

(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)
There are no significant changes in the assumptions concerning the impact of the COVID-19 pandemic stated under
additional information in the previous fiscal year’s securities report.
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 the ES-CON
JAPAN Group may be materially impacted due to posting of appraisal loss of inventories and impairment loss on realestate owned, etc.
(Board Benefit Trust for Executives)(1) Overview of the Transaction
1) We passed a resolution to introduce a performance-based stock reward system (the “System”; the trust
established based on the trust agreement concluded with Resona Bank, Limited for the System is referred toas “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 directors (excluding auditor directors, external directors,
and non-executive directors) and (authorized) executive managing officers (the “Directors”; hereinafter referred
to as the same unless otherwise specified) of ES-CON JAPAN 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 fall in share price, thereby increasing awareness ofcontribution to the medium- to long-term improvement of operating results and enhancement of corporate
value. Furthermore, we passed a resolution for continuation and partial revision of performance-based stock
rewards for the Directors at the Regular General Meeting of Shareholders held on March 26, 2020, and theRegular General Meeting of Shareholders held on March 26, 2021.
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 said money as capital, and shares of ES-CON JAPANand money equivalent to the fair market value of shares of ES-CON JAPAN are granted to the Directors of ESCON JAPAN through the trust in accordance with the operating results achievement rate, etc., pursuant to theofficer 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 said Director retires from all positions of Director in principle.
Under the System, for a set period of three fiscal years from the fiscal year ending December 2021 to thefiscal year ending December 2023 as well as each subsequent period of three fiscal years, ES-CON JAPANwill contribute 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 ended December 2020
to the fiscal year ending December 2022 and each subsequent period of three fiscal years): 330 million yen
・Resolution passed at the Regular General Meeting of Shareholders held on March 26, 2021
Upper limit of funds for acquisition of shares (for the three fiscal years from the fiscal year ending December 2021
to the fiscal year ending December 2023 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- 12 -

ownership regulations.
(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 are 347 million yen and 851,000 shares for the fiscal year ended December 2020, and 347
million yen and 851,000 shares for the first quarter of the fiscal year ending December 2021.
(Share-Based Payment Benefits-Type ESOP Trust)(1) Overview of the Transaction
We passed a resolution to introduce a share-based payment benefits-type ESOP (the “System”; the trust
established based on the trust agreement concluded with Resona Bank, Limited for the System is referred to as“share-based payment benefits-type ESOP trust”) 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 motivationand 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 sharesof ES-CON JAPAN with said money as capital, and shares of ES-CON JAPAN are granted to the ES-CON
JAPAN Group’s employees who have satisfied certain requirements through the trust, pursuant to the stock
ownership regulations 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 are 59 million yen and 233,000 shares for the fiscal year ended December 2020, and 59
million yen and 232,500 shares for the first quarter of the fiscal year ending December 2021.

- 13 -

(Segment Information, Etc.)[Segment Information]
I. First quarter of fiscal year ended December 2020 (from January 1, 2020 to March 31, 2020)
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

40,8271,300

68

42,196－42,196

－

－

－

－

－

－

40,8271,300

68

42,196－42,196

10,522464

44

11,031(1,352)

9,678

Total

Net sales
Net sales toexternal customers
Intersegment net
sales or transfers
Total
Segment income(Note 1) The reconciliation of segment income of -1,352 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 quarter of fiscal year ending December 2021 (from January 1, 2021 to March 31, 2021)
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

10,723

1,599

113

12,436－

12,436

－

－

－

－

－

－

Total

10,723

1,599

113

12,436－

12,436

Segment income (loss)

1,750

687

(6)

2,430

(1,223)

1,207

Total

Net sales
Net sales toexternal customers
Intersegment net
sales or transfers(Note 1) The reconciliation of segment income or segment loss of -1,223 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 or segment loss is reconciled with operating income on the quarterly consolidated statementof income.
2. Information on Impairment Loss on Non-Current Assets or Goodwill, Etc. by Reporting Segment
Not applicable.

- 14 -

(Significant Subsequent Events)(Issuance of New Shares Through Third-Party Allotment)
Based on resolution passed at the meeting of the board of directors held on February 24, 2021, and approval at the26th Regular General Meeting of Shareholders held on March 26, 2021, ES-CON JAPAN issued new shares throughthird-party allotment with Chubu Electric Power Co., Inc. (hereinafter “Chubu Electric Power”) as the allottee(hereinafter “capital increase through third-party allotment”), payment for which was completed on April 5, 2021. This
resulted in ES-CON JAPAN becoming a consolidated subsidiary of Chubu Electric Power.
(1) Purpose and Reason
The capital increase through third-party allotment issued new shares to Chubu Electric Power for the purpose ofstrengthening business and financial standings, implemented as part of the capital and business partnershipagreement newly concluded with Chubu Electric Power on February 24, 2021.
(2) Outline of Issuance
1)

Type and number of shares offered

26,619,000 shares of common stock2)

Paid-in amount

769 yen per share

3)

Total paid-in amount

20,470 million yen

4)5)

Of total paid-in amount,amount of provision to capital
Method of offering

10,235 million yen
Capital increase through third-party allotment
To cover a portion of the cost of acquisition of real estate for the6)

Use of funds

development of new revenue-generating real estate and holding
in ownership- 15 -

3.

Other
Status of Contracts and Sales
The performance of contracts in the real estate sales business for the first quarter is as follows:First quarter of fiscal year ending Dec. 2021
(from Jan. 1, 2021 to Mar. 31, 2021)
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.

338

17,373665

31,375

Other

－

573

－

1,257

338

17,946665

32,633

Total(Note)

The above amounts do not include consumption tax, etc.

The main performance of sales by segment for the first quarter is as follows:First quarter of fiscal year ending Dec. 2021
(from Jan. 1, 2021 to Mar. 31, 2021)

Name of segment

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

Condominiums

189

8,191

Genboen, Koga-shi

－

1,874

3-chome, Aoyamadai, Suita-shi－

226

Matsukazecho, Hiratsuka-shi

－

71

Other

－

358

189

10,723

Real estate sales business

Subtotal
Real estate leasing business

1,599Real estate planning agency and113

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

- 16 -

12,436