Summary of Business Results for the Second Quarter Ended September 30, 2018
[Japan GAAP] (Consolidated)
November 14, 2018
Company
Akatsuki Corp.
Listed on the TSE
Stock Code 8737 URL http://www.akatsuki-fg.com/
Representative
Hideaki Shimane, President and Representative Director
Contact
Masahiro Kawanaka, Executive Officer, Head of President officeTEL
03-6821-0606
Expected date of filing of quarterly report: November 14,2018
Expected starting date of dividend payment: December 10, 2018
Preparation of quarterly supplementary financial document: None
Quarterly results briefing: None

（Rounded down to million yen）
1. Consolidated business results for the six months ended September 2018(April 1, 2018 through September 30, 2018)(1)Consolidated results of operations(% change from the previous corresponding period)
Net income
Net operating
Operating income
Ordinary income
attributable to owners
Operating revenues
revenuesof parent
Million yen％ Million yen％ Million yen％ Million yen％ Million yen％
Six months ended Sep. 201815,270
61.7
4,633
10.4
351
△68.4
184
△86.7
139
△87.5
Six months ended Sep. 2017
9,442
299.1
4,198
143.0
1,109
－
1,381
178.6
1,118
－
(Note) Comprehensive income:Six months ended Sep. 201839 Million yen （△94.4％）
Six months ended Sep. 2017709 Million yen （78.9％）
Net income per share Diluted net income per share
Yen
Yen
Six months ended Sep. 2018
6.18
5.73
Six months ended Sep. 2017
66.72
60.81
（2）Consolidated financial position
Total assets
As of Sep. 2018
As of Mar. 2018
(Reference) Shareholders’ equity:
As of Sep. 2018
As of Mar. 2018

Shareholders’ equity
ratio
Million yen％
13,63020.6
12,467
20.1

Net assets

Million yen
58,01453,649Net assets per
share
Yen
425.48500.13

11,950 Million yen
10,782 Million yen

2. Dividends
Annual dividend
End of 2Q

End of 1Q
Yen
Year ended Mar. 2018

End of3Q
Yen
10.00

－

Year-end
Yen

Yen
10.00

－

Year ending Mar. 2019
－
10.00
－
Year ending Mar. 2019－－
(forecast)(Note) Revisions to dividend forecast for the current quarter: None
Dividend forecasts for the fiscal year ending March 2019 have not yet been determined.

Total

－

－

－

－

3. Forecast of consolidated business results for the fiscal year ending March 2019(April 1, 2018 through March 31, 2019)(% change from the previous corresponding period)
Net income
Operating revenues
Operating income
Ordinary income
attributable to ownersof parent
Million yen％ Million yen％ Million yen％ Million yen％
Year ending Mar. 2019
37,00063.4
2,100(Note) Revisions to business forecast for the current quarter: None

29.9

－ 1 －

1,600

△ 10.4

Yen
20.00

1,000

△ 41.7

※ Notes（1）Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying changes in the scope of
consolidation): None
（2）Applications of simplified accounting procedures and specific accounting procedures:

None（3）Changes in accounting policies, accounting estimates and restatement① Changes in accounting policies associated with revision of accounting standards:② Changes in accounting policies other than ①:③ Changes in accounting estimates:④ Restatement:

Yes
None
None
None

（4）Shares outstanding (common stock)① Number of shares outstanding at the end of period (treasury stock included)
As of September 2018
As of March 2018
② Treasury stock at the end of period
As of September 2018
As of March 2018
③ Average number of stock during period (quarterly cumulative period)
Six months ended September 2018
Six months ended September 201730,082,576 shares
22,973,937 shares
2,233,801 shares
1,413,716 shares
22,646,289 shares
16,769,410 shares(Note) The number of treasury stock which is deducted for calculating the number of treasury stock during period and theaverage number of shares during the period includes the shares of the Company owned by the ESOP Trust Account and the
BBT Trust Account.
※ Quarterly financial summary is not subject to the quarterly review procedures by certified public accountants or auditing firms.
※ Explanation regarding appropriate use of business forecasts and other special instructions
Forecasts regarding future performance in this material are based on information currently available to the company and certain assumptions
that the company deems to be reasonable at the time this report was prepared. Actual results may differ significantly from the forecasts due
to various factors.

－ 2 －１．Qualitative Information from the Recent Quarterly Closing（１）Explanation of Business Results
In the first half of the current fiscal year (April 1 to September 30, 2018), the group has taken
following initiatives.
In the securities and related business, Akatsuki Securities has been expanding the customer basethrough our branch offices and independent financial advisor (IFA) channels. We also strengthened
staff members and improved the wholesale business with an aim to increase the number ofunderwritings of initial public offerings (IPO). In the securities and related business segment,
despite commission income decreasing because of the reduction in individual investors’ trading
activities in the domestic market, trading profit was expanded by the increase of the US stock
trading in the OTC market . As a result, operating revenue increased slightly. However, thissegment’s profit decreased due to higher costs associated with various marketing campaigns topromote trading.
(Operating revenue and segment profit of the securities-related business)(one million yen)

Operating revenue
Segment profit

Six months ended Sep.
2017

Six months ended Sep.
2018

1,877

1,892

0.8％

234

144

▲38.5％

Rate of change

In the real estate related business segment, Total Estate, Inc. has been selling renovatedcondominiums mainly to first-time home buyers. In addition to our focus of buying vacantcondominiums, we are strengthening our medium-to-long-term revenue base by the purchase of secondhand condominiums with existing lessees. The purchase of second-hand condominiums with lessees has
been increasing steadily. In order to support the continuing purchase of condominiums, the Company
launched a rights issue to stockholders. At the end of September, we have raised 1,407 million yen(representing 61.09% of rights issued). At the end of October, the corresponding numbers were 1,554
million yen and 67.47% respectively.
EW Asset Management Co., Ltd., a subsidiary company operating a healthcare fund, has commenced
development of a senior housing project in Uraga (in Kanagawa pref.) and completion is expected in
October 2019. EW Asset Management also owns 6 senior housing facilities where operation has alreadystarted .
In the real estate and related business segment, operating revenue contribution from second-handcondominiums sales by Total Estate Inc. was significant and the segment’s operating revenues weresteady. On the other hand, the segment profit decreased due to the sale of Wealth Management, Inc.
last year which led to a decrease of 1,100 million yen in segment profit.
(Operating revenue and segment profit of the real estate related business)(one million yen)Six months ended Sep.
2017

Six months ended Sep.
2018

Operating revenue

7,721

13,55275.5％

Segment profit

1,422

870

▲38.8％－ 3 －Rate of change

Based on these results, the Company’s consolidated operating results in the first half of thecurrent fiscal year are shown below.
(one million yen)Six months ended Sep.
2017

Six months ended Sep.
2018

Operating revenues

9,442

15,27061.7％

Operating income

1,109

351

▲68.4％

Ordinary income

1,381

184

▲86.7％Net
incomeattributabletoowners of parent

1,118

139

▲87.5％

Rate of change

The Company is expecting the sale of some large-scale projects in the real estate business segment in
the remainder of the fiscal year. However, we are not amending the consolidated financial forecasts
announced in June 2018.
(The consolidated financial forecasts for March 2019)(one million yen)
Operating revenues

Operating income

37,0002,100Year ending
Mar. 2019

Net income
attributable toowners of parent

Ordinary income

1,600

1,000

Total Estate, Inc.’s business result significantly affects the whole
performance. Therefore, we disclose the supplementary information below.

consolidated

business(Supplementary Information)
Total Estate, Inc. has been selling renovated condominiums to first-time buyers in the Tokyo
metropolitan area around Tokyo and Kanagawa.
Total Estate has two main sources to acquirecondominiums.
① Existing vacant condominiums - we renovate and sell these as soon as possible. (Type A) and② Existing occupied condominiums with lessees - we enjoy rental income during the lease term
and after the tenant moves out, we renovate and sell (Type B).
(one million yen)
Year ended Mar. 2018Year ending Mar. 2018

1Ｑ
2Ｑ
3Ｑ
4Ｑ
1Ｑ
2Ｑ
(Apr.～Jun.) (Jul.～Sep.) (Oct.～Dec) (Jan.～Mar.) (Apr.～Jun.) (Jul.～Sep.)
Sales

(*)

6,118

5,270

5,208

5,777

6,797

Ordinary income

(*)

268

285

184

334

385

Net income

(*)

192

383

115

336

261

（*）We do not disclose results for the 1Q of the fiscal year ending Mar.2018 because they cannot becompared due to changes in accounting policy, etc., due to the joining of our consolidated
group.

－ 4 －(b) Number of units purchased(units)Year ended Mar. 2018

Type Ａ
Type Ｂ
Total

Year ending Mar. 2018

1Ｑ
2Ｑ
3Ｑ
4Ｑ
1Ｑ
2Ｑ
(Apr.～Jun.) (Jul.～Sep.) (Oct.～Dec) (Jan.～Mar.) (Apr.～Jun.) (Jul.～Sep.)
156
161
166
175
159
147
（+3）
（△14）
29
52
105
51
46
50
（+17）
（△2）
185
213
271
226
205
197
（+20）
（△16）

(c) Number of units sold(units)Year ended Mar. 2018

Sales units

Year ending Mar. 2018

1Ｑ
2Ｑ
3Ｑ
4Ｑ
1Ｑ
2Ｑ
(Apr.～Jun.) (Jul.～Sep.) (Oct.～Dec) (Jan.～Mar.) (Apr.～Jun.) (Jul.～Sep.)
114
170
137
147
162
170
（+48）
（－）

(d) Inventory(units)Year ended Mar. 2018

Type Ａ

Year ending Mar. 2018

1Ｑ
2Ｑ
3Ｑ
4Ｑ
1Ｑ
2Ｑ
(end of Jun) (end of Sep) (end of Dec) (end of Mar) (end of Jun) (end of Sep)
356
353
386
421
426
418

Type B

187

233

334

378

416

451

Total

543

586

720

799

842

869

－ 5 －

Quarterly consolidated balance sheet(Thousands of yen)
As of March 31, 2018
AssetsCurrent assets
Cash and deposits
Cash segregated as deposits
Trading products
Margin transaction assets
Loans on margin transactions
Cash collateral pledged for
securities borrowing on margintransactions
Guarantee deposits
Real estate for sale
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures
Land
Construction in progress
Other
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets－ 6 －As of September 30, 2018

7,908,050
5,700,000
1,449,274
5,166,609
5,127,261

13,451,492
5,000,000
625,201
4,189,031
4,066,781

39,347122,249

330,458
21,044,583
735,600
42,334,578

330,452
22,403,868
802,467
46,802,513

3,945,925
2,512,914
558,086
193,286
7,210,213

4,980,581
2,316,524
51,289253,088
7,601,483

2,230,632
263,017
2,493,649

2,126,407
184,504
2,310,912

483,691
1,182,970△206,689
1,459,972
11,163,834
53,498,412

408,105
1,097,593△206,369
1,299,328
11,211,724
58,014,238

(Thousands of yen)
As of March 31, 2018
Liabilities
Current liabilities
Trading products
Trade date accrual
Margin transaction liabilities
Borrowings on margin transactions
Cash received for securities lendingon margin transactions
Deposits received
Guarantee deposits received
Short-term bonds payable
Short-term loans payable
Current portion of long-term loans
payableCurrent portion of long-term nonrecourse loans payable
Income taxes payable
Other
Total current liabilities
Non-current liabilities
Bonds payableNon-recourse Bond
Long-term loans payableNon-recourse Long-term loans payable
Net defined benefit liability
Exective Share benefit reserve
Other
Total non-current liabilities
Reserves under special laws
Reserve for financial products
transaction liabilities
Total reserves under special laws
Total liabilities
Net assets
Shareholders' equity
Capital stock
Deposit for subscriptions to shares
Capital surplus
Retained earnings
Treasury shares
Total shareholders' equity
Accumulated other comprehensive income
Valuation difference on available-forsale securities
Foreign currency translation adjustment
Total accumulated other comprehensive
incomeShare acquisition rights
Non-controlling interests
Total net assets
Total liabilities and net assets－ 7 －As of September 30, 2018－
970,292
2,052,195
1,977,525

58,312
397,421
1,569,144
1,419,297

74,670149,846

5,180,429
470,482
4,000,000
13,670,917

5,282,311
464,692
3,000,000
13,490,233

465,632

652,921

101,720

109,220

421,429
1,631,863
28,964,963

164,624
1,919,147
27,108,027

1,000,000
100,000
6,451,040
3,354,035
219,201
429,832
492,464
12,046,573

3,000,000
99,0009,019,557
3,836,425
217,913558,452
525,051
17,256,400

19,28819,28819,28841,030,825

19,28844,383,716

4,560,012－
2,775,515
4,052,873△674,389
10,714,011

5,273,359
101,991
3,495,919
3,963,074△856,698
11,977,646

62,593△33,725

6,227

7,076

68,821△26,649

21,647
1,663,106
12,467,587
53,498,412

20,901
1,658,624
13,630,522
58,014,238

Quarterly consolidated statement of income (cumulative)(Thousands of yen)Six months ended
September 30, 2017
Operating revenue
Commission received
Net trading income
Financial revenue
Sales on real estate business
Other
Total operating revenue
Financial expenses
Cost of sales
Cost of sales on real estate businessTotal cost of sales
Net operating revenue
Selling, general and administrative expenses
Trading related expenses
Personnel expenses
Real estate expenses
Office cost
Depreciation
Taxes and dues
Sales commission
Other
Total selling, general and administrative
expenses
Operating profit
Non-operating income
Gain on sales of investment securities
Foreign exchange gains
Penalty income
Share of profit of entities accounted forusing equity method
Other
Total non-operating income
Non-operating expenses
Interest expenses
Commission fee
Other
Total non-operating expenses
Ordinary profit－ 8 －Six months ended
September 30, 2018

1,007,857
656,392
55,595
7,721,278
1,161
9,442,285
28,019814,635
842,937
47,363
13,547,356
18,687
15,270,980
8,648

5,215,324
5,215,324
4,198,940

10,628,686
10,628,686
4,633,645

12,902
1,502,362
164,207250,041
61,546150,363
195,209753,263

12,097
1,742,931
192,191
242,01286,650382,095
463,885
1,160,770

3,089,896

4,282,635

1,109,044

351,010

390,5123,653－－
47,07345,754207

154

69,706
464,079

42,829135,811

128,775
42,80319,925191,504
1,381,619

240,829
40,30921,482
302,621
184,200(Thousands of yen)Six months ended
September 30, 2017
Extraordinary income
Gain on sales of non-current assets
Other
Total extraordinary income
Extraordinary losses
Loss on liquidation of subsidiaries andassociates
Other
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitLoss attributable to non-controllinginterests
Profit attributable to owners of parent－ 9 －Six months ended
September 30, 2018

－
500
500

176,408
7,191
183,600

－

7,874

837
837
1,381,282
268,727
15,744284,472
1,096,810

0
7,874
359,926
207,596
16,940224,537
135,389△22,072△4,486

1,118,882

139,875

Quarterly consolidated statement of comprehensive income (cumulative)(Thousands of yen)Six months ended
September 30, 2017
ProfitOther comprehensive income
Valuation difference on available-forsale securities
Share of other comprehensive income ofentities accounted for using equity
methodTotal other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable toowners of parent
Comprehensive income attributable to noncontrolling interests－ 10 －

Six months ended
September 30, 2018

1,096,810

135,389△387,560△96,315107848△387,453
709,356△95,466
39,922

731,424

44,409△22,067△4,486

Quarterly consolidated statement of cash flows(Thousands of yen)Six months ended
September 30, 2017
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Increase (decrease) in provision forbonuses
Increase or decrease the amount ofofficers stock benefit allowance
Increase (decrease) in net defined
benefit liability
Interest and dividend income
Interest expenses
Loss (gain) on sales of property, plantand equipment
Decrease (increase) in real estate forsale
Decrease (increase) in trading products assets (liabilities)
Decrease (increase) in trade dateaccruals
Decrease (increase) in cash segregated as
deposits
Decrease/increase in assets/liabilities
for margin transaction
Decrease/increase in advancepaid/deposits received
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes (paid) refund
Net cash provided by (used in) operating
activities－ 11 －

Six months ended
September 30, 2018

1,381,282
116,368
59,487359,926
207,012104,224

34,979△7,02087,375

128,620

12,530△1,287△46,021
128,775△5,456
241,006－△176,408△939,852△1,697,343

18,596882,385

72,107△572,870

200,000

700,000△193,229

494,526

732,386

96,398△421,929
1,242,855
45,450△111,204
122,588631,724
1,385,438
17,503△220,836△619,973

1,299,689

562,131(Thousands of yen)Six months ended
September 30, 2017
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plantand equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment
securities
Proceeds from redemption of investment
securities
Purchase of shares of subsidiaries
resulting in change in scope of
consolidation
Payments of loans receivableCollection of loans receivable
Other, net
Net cash provided by (used in) investing
activities
Cash flows from financing activities
Proceeds from loans payable
Repayments of loans payable
Proceeds from long-term non recourse
loans payable
Repayment of long-term non recourse loans
payableProceeds from issuance of bonds
Redemption of bonds
Proceeds from issuance of common shares
Proceeds from payment of new stock
application margin
Proceeds from issuance of shareacquisition rights
Proceeds from share issuance to noncontrolling shareholders
Purchase of treasury shares
Cash dividends paid
Payments from changes in ownershipinterests in subsidiaries that do not
result in change in scope of
consolidation
Other, net
Net cash provided by (used in) financing
activities
Effect of exchange rate change on cash andcash equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of
periodCash and cash equivalents at end of period－ 12 －

Six months ended
September 30, 2018

△35,000－△1,076,003△55,000
10,006△779,895－

649,556△30,651△2,074,705△2,690△50,000

532,969

2,049

6,005

－

△4,644,240△3,744△1,0001,255,136△48,492△38,804
21,934
209△6,115,982△246,379

14,872,863△11,063,982

12,669,044△10,093,922

730,000

550,000△26,660△60,110

4,991,172△4,000,000
1,256,257

4,990,150△4,000,000
1,425,881

34,487

101,991

21,525－

345,600－△1,659△63,547△203,797△229,674△15,225－△11,211△14,556

7,069,619

5,135,004

047,0732,253,326

5,497,830

6,571,534

6,567,542※１ 8,824,861※１ 12,065,372

disclaimer

This material is an English translation of Japanese announcement made on the date above. Although
the Company intended to faithfully translate Japanese document into English, the accuracy andcorrectness of this English translation is not guaranteed and thus you are encouraged to refer tothe original Japanese document. This translation does not constitute, nor is it intended to be anoffer to sell, or an invitation to subscribe for, or purchase, any securities in the Company.

－ 13 －