Consolidated Financial Results for the First Quarter of
the Fiscal Year Ending March 31, 2017
(Based on Japanese GAAP)(Translation of Japanese Financial Summary, Released on August 8, 2016)
Company name: Sun Frontier Fudousan Co., Ltd.
Stock listing: Tokyo Stock Exchange 1st Section
Code number: 8934
URL: http://www.sunfrt.co.jp
Address: 14F, Toho Hibiya Building, 2-2, Yurakucho 1-chome, Chiyoda-ku, Tokyo 100-0006
Representative: Tomoaki Horiguchi, President
Inquiries: Yasushi Yamada, Operating Officer and Chief of Management Planning Division(Phone: +81-3-5521-1301)*Amounts under one million yen have been rounded down.

1. Consolidated Performance in the First Quarter of the Fiscal Year Ending March 31, 2017
(1) Operating results*Percentage figures shown under net sales, operating income, ordinary income, and net income columns indicate year-on-year changes for
those items.
(Millions of yen, except for per share figures. The number in parentheses are increase rate)

1st Quarter of FY ending March 31, 2017
1st Quarter of FY ended March 31, 2016

Net Sales¥10,403 (71.7%)¥6,060 (30.0%)

Operating Income¥3,570 (150.9%)¥1,423 ( 38.7%)

Ordinary Income¥3,468 (153.7%)¥1,367 ( 42.8%)(Note) Comprehensive Income: 1st quarter of FY ending March 31 2017: ¥2,505 million (111.3%) 1st quarter of FY ended March 31
2016: ¥1,185 million (33.5%)¥2,525 (113.3%)¥1,183 ( 33.4%)

Net Income per Share(Yen)¥59.07¥27.68

Total Assets¥53,623¥54,084

Net Assets¥31,590¥30,144Net Income
1st Quarter of FY ending March 31, 2017
1st Quarter of FY ended March 31, 2016

Fully Diluted Net Income
per Share (Yen)¥ －¥ －(2) Financial Position (at end of the term)(Millions of yen)

1st Quarter of FY ending March 31, 2017
FY ended March 31, 2016

Equity Ratio (%)
58.9%
55.7%

(Reference) Shareholders’ Equity at term-end: 1st Quarter of FY ending March 31, 2017 (as of June 30, 2016): ¥31,576 million
FY ended March 31, 2016 (as of March 31, 2016): ¥30,139 million

2. Cash Dividends
1st Quarter-

Cash Dividends per Share
2nd Quarter
3rd Quarter
0.00-

FY Ended March 31, 2016
FY Ending March 31, 2017
FY Ending March, 2017 (Projections)(Note) Changes from the latest released dividend forecasts: None

0.00

-

(Yen)

Year-end
25.00

Annual total
25.00

28.00

28.00

3. Forecast for Consolidated Financial Results for the Fiscal Year Ending March 31, 2017
(From April 1, 2016 to March 31, 2017) *Percentage figures are indicated year-on year changes for those items.
(Millions of yen, except for per share figures. The number in parentheses are increase rate)
Net Income per
Net Sales
Operating Income
Ordinary Income
Net Income
Share (Yen)¥41,000 (33.9%)¥8,500 (15.1%)¥8,200 (16.7%)¥130.97
FY Ending March, 2017
¥5,600 (△31.3%)(Note) Changes from the latest released performance: None
The main reason for the decrease in net income is that the next FY (ended March 31, 2017) income before tax adjustments is expected
to put a complete end to tax loss carryforward from previous terms. As a result, ¥1,325 million reversal of loss included in thedeferred tax asset calculated at the end of FY ended March 31, 2016 would be added up to the corporate tax adjustment amount, whichleads to a heavier tax burden than the previous term.

1

4. Others(1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in changes in scope of
consolidation): None
New companies: —Excluded companies: —(2) Adoption of special accounting practices in the preparation of quarterly consolidated financial statements: None
(3) Changes in accounting principles, procedures and presentation methods
1) Changes caused by revision of accounting standards: Yes
2) Changes of accompanying revisions other than 1) above: None
3) Changes in accounting estimates: None
4) Restatement of corrections: None
(4) Number of outstanding shares (common stocks)
1) Number of outstanding shares at the end of the period (including treasury stock):
1st Quarter of FY ending March 31, 2017: 42,755,500 shares
FY ended March 31, 2016: 42,755,500 shares
2) Number of treasury stock at the end of period:
1st Quarter of FY ending March 31, 2017: 143 shares
FY ended March 31, 2016: 143 shares
3) Average number of shares for the period:
1st Quarter of FY ending March 31, 2017: 42,755,357 shares
1st Quarter of FY ended March 31, 2016: 42,755,357shares※Implementation status of quarterly review processes
This Summary of Consolidated Financial Results is not subject to quarterly review processes under the
Financial Products and Exchange Law. At the time of this document’s release, review of the quarterly
financial statements under the Financial Products and Exchange Law had not been completed.
※Appropriate use of business forecasts; other special items
Business forecasts contained in this report are based on information available to the Company on the date of this report’s
announcement and on assumptions pertaining to uncertain factors that may affect the Company’s future results. Therefore,
the company has no intention to promise the accomplishment of the forecasts. Due to unforeseen circumstances, however,actual results may differ significantly from such forecasts.

2

Table of Contents of Appendix
1. Qualitative Information Concerning Consolidated Business Performance for the Quarter Under Review ............... 4(1) Qualitative information on consolidated operating results ..................................................................................... 4(2) Qualitative information on consolidated financial position .................................................................................... 5
2. Consolidated Financial Statements............................................................................................................................. 6(1) Quarterly consolidated balance sheets .................................................................................................................... 6(2) Consolidated Quarterly Statements of Income and Consolidated Quarterly Statements ofcomprehensive income ......................................................................................................................................... 8(3) Notes to quarterly financial statements ................................................................................................................. 10(Notes regarding the conditions of going business) ............................................................................................. 10(Notes in the case of major changes in shareholders’ equity)............................................................................... 10(Segment information, etc.) .................................................................................................................................. 103

1. Qualitative Information Concerning Consolidated Business Performance for the Quarter under Review(1) Qualitative information on consolidated operating results
With regard to the Japanese economy during the first quarter of consolidated fiscal year, thanks to the government’s
economic stimulus measures and monetary easing by the Bank of Japan, the employment situation have been showing
improvement, but corporation earnings were affected by sensitive currency movement and weakened personal consumption.
Moreover, in the meantime, significant increase of foreign visitors to Japan is also contributable to moderate economic
recovery. On the other hand, as the economic downside risk of China including the emerging countries has increased, theeconomic outlook is still uncertain.
In the real estate industry to which our company and our consolidated subsidiaries (hereinafter, "our corporate group")
belong, there has been a long-term improvement in the vacancy rate in the office market in urban center, and the averagerent is also showing moderate improvement in the same period. On the other hand, under the unpredictable economic
situation, investors retain a wait-and-see attitude to the real estate market, so the volume of trades decreased.
In such an environment, our corporate group focuses on the utilization and distribution of small to medium-sizedcommercial properties in the urban center of Tokyo, and has helped building owners solve various troubles regarding realestate. We create multifaceted earning opportunities by providing each customer with one-stop services with philosophybased business model, including proposal and order receipt for the rental, brokerage, sale, management, maintenance,
remodeling, and renovation of buildings; consultation regarding inheritance, tax affairs, etc. in collaboration with specialists
and rent guarantee service, etc.
By linking up unrivalled knowhow and experience gained through the process of providing the above mentioned various
services, we have been proactively developing real estate revitalization projects that deliver substantial value added to
stakeholders and society. Focusing mainly on commercial properties in 5 central wards (Chiyoda, Chuo, Minato, Shinjuku,
and Shibuya), we change the layout of rental rooms, creating green lush terraces on building roofs, preparing setup offices,
redesigning the interior to make sure everything fit to every customer’s deepest needs. Hence, the buildings sold by ourcompany possess not only great attractiveness but also deliver high quality. Moreover, our leasing management team withhigh expertise and deep understanding of local needs are always there to help property owners fulfill any vacancies.
We exert our strength in office building operation business model by hotel developing, operating and revitalization
business, and through that, we are able to build another core business second to our office business. To response to theincreasing number of foreign tourists visiting Japan, we have agreed to make a business alliance with Shanghai Spring Groupfor the development of inbound city-tourism hotel chain, and in April, “SPRINGSUNNY Hotel Nagoya Tokoname” opened
as the first hotel of our collaborative brand. In addition, we started the projects of the high-rise condominium in Da Nang,
the largest city of central Vietnam, and urban residential houses in Jakarta, the capital of Indonesia.
As a result, our consolidated results for the first quarter ending June 2016 were as follows:
Sales ¥10,403 million (up by 71.7% year on year), operating income ¥ 3,570 million (up by 150.9% year on year), ordinary
income ¥3,468 million (up by 153.7% year on year), and net income ¥2,525 million (up by 113.3% year on year).
The performance of each segment is as follows.
Real Estate Revitalization
From the procurement stage, our corporate group starts a “production” process through which we aim to put the property
to the best use possible. By carefully researching real estate leasing market on a daily basis to collect knowledge and linking
each section’s experience in technologies, planning, building management and construction, we draw up feasibly creative
business plans. In addition, we emphasize the fact that the more satisfied the tenants, the more satisfied the owner. Throughfrequent interactions with tenants, we look for all possible ways to make the property more comfortable and convenient forthem to use, and address any challenges quickly, and thereby achieve high rates of tenant retention and utilization.
We have been successful in maximizing the profitability of real estate by renovating real estate, especially those with low
rate of utilization. Concretely, we renew properties so that they can meet the needs of society and owners, and therefore,
turning them into profitable real estate investment before selling them to individuals and corporation customers.
By continuing to provide reliable aftersales service (including property management, pro-active response to faults, solving
owner difficulties and responding to new demands), we deliver the property as a composite package of added value that evenextends to post-sale follow-up service.
As for the Revitalization business, we determine target buyers at the stages of procurement and commercialization,
pursuing not only the rate of return, but also “true values” suited for target clients such as location, rarity, yield stability andtaxation merits. Notably, in this first quarter, we supposed the buyer who will appreciate the charm and value of the property,
and innovated a way to limited sales, spend much time to create high-value added property.
Through these efforts, both sales and profits increased from the previous year.
As for the property leasing business, we purchase and retain properties according to our well-selected criteria. With a
combination of valuable knowledge and skills in rental brokerage, property management, construction solutions and rent
guarantee services, we have been succeeding in maintaining a high rate of utilization and securing stable rental income. But
by the disposition of high- earning property, both sales and profits decreased from the previous year.
As a result of the above activities, sales were ¥9,357 million (up by 81.2% year on year) and segment income was ¥3,869
million (up by 156.8% year on year).
Real Estate Brokerage
Our sales intermediation business has been focusing on customer referrals from other departments such as property
4management and leasing brokerage. By providing high value added and satisfaction to customers, the business flourishes
through a good circulation of referrals and repeaters. Besides that, with our ability in solving customers’ problems, real estate
consulting and foreign language corresponding service for overseas investors (mainly those from Taiwan), our customer
base has expanded.
By Chinese economic slowdown and Brexit issue, the economic outlook is still uncertain, both sales and profits of thesales brokerage business decreased from the previous year. But the number of inquiry is increasing, so we will set the mattersto close them.
In the leasing brokerage business, while occupancy rate continuously improves, not only are we active in finding tenants,
but also in solving property owners’ various problems. Through these efforts, both sales and profits increased from theprevious year. Furthermore, the leasing management team is also contributing to the whole group’s profit by engaging in
recruiting tenants for properties of revitalization business, and bringing in new customers entrusting their buildings toproperty management department.
As a result of the above activities, sales were ¥226 million (down by 44.1% year on year) and segment income was ¥182
million (down by 50.3% year on year).
Property Management
In the property management business, we practiced the profit improvement by the contract changes to appropriate rent
level providing meticulous and careful leasing management services backed by good sense of locality, which contributed tothe income recovery and maintain of the stable occupancy rate in the building management. Backed by these activities, we
could receive repeated orders for property management from the same customer. At the end of the first quarter of this fiscal
year we were newly managing 53 buildings (18.2% increase year on year), as can be seen in the table below.
In addition, by trying to grasp clients’ asset background and by offering appropriate solutions for them, we created thebusiness opportunities for brokerage and construction order entrusted by the client who had purchased the revitalized
property.
Such combined real estate services with keeping the viewpoint of customers are creating much added-value by making
creativity and improvement.
As a result of the above activities, both sales and profits increased.

No. of entrusted buildings
Occupancy rate

End of June 2014
242
97.3%

End of June 2015
292
96.1%

End of June 2016
345
95.3%

As for the building maintenance business, by demonstration of our strength in property maintenance, especially in cleaning
and repairing walls of high-rise buildings, we have been able to increase the number of orders received and consequently
generate more revenue for the fiscal year ended March 2016, both sales and profits increased.
As a result of the above activities, sales were ¥430 million (up by 20.2% year on year) and segment income was ¥202
million (up by 21.4%).
Other Businesses
In the rent guarantee business, concentration on new client acquisition and enhancement of cooperation with affiliatedcompanies has helped improve the bottom line.
As for the construction solution business, due to specialize in revitalization business, both sales and profits decreased.
“Space Rental”, our new business established the previous term. We continued to expand this business by taking over new
rental conference rooms as well as offices.
As for the hotel business, “SPRINGSUNNY Hotel Nagoya Tokoname” opened in April as the first hotel of thecollaborative brand with Shanghai Spring Group. Aiming at becoming “heart-warming” hotel which is attractive to foreigngroup tourists and independent travelers, occupancy rate and average daily room rate are improved remarkably.
As a result of the above activities, sales were ¥388 million (up by 191.4% year on year) and segment income was ¥195
million (up by 211.8% year on year).
(2) Qualitative information on consolidated financial position
As of the end of the first quarter of this consolidated fiscal year, total assets were 53,623 million yen (down by 0.9% fromthe end of the previous consolidated fiscal year) and liabilities were 22,033 million yen (down by 8.0%). The main reasonsfor the decrease in total assets were that cash increased 1,247 million yen and inventory assets decreased 1,317 million yen.
The main reason for decrease in liabilities was that long-term loans payable decreased 1,114 million yen and tax payable
decreased 538 million yen.
Net assets were 31,590 million yen (up by 4.8%). The main reason for the increase in net assets was posting 2,525 million
yen in quarterly net income, despite 1,068 million yen being paid out for year-end dividends.

5

2. Consolidated Financial Statements(1) Consolidated Quarterly Balance Sheets
FY ended March 31, 2016
(As of March 31,2016)(Thousands of yen)
End of 1Q of FY ending
March 31, 2017(as of June 30, 2016)

ASSETS
Current assets
Cash and deposits

15,413,97816,661,961

Accounts receivable-trade
Real estate for sale344,832
6,047,465

345,160
2,994,186

Real estate for sale in process
Supplies

26,664,726
2,096

28,401,260
1,299

Deferred tax assets
Other

1,736,749
1,174,601

1,164,672
1,349,862

Allowance for doubtful accounts
Total current assets△18,977△15,43151,365,472

50,902,972

702,298
1,172,832

701,630
1,172,832

44,72347,669Noncurrent assets
Property, plant and equipment
Buildings, net
Land
Other, net

1,919,854

1,922,132

Intangible assets

Total property, plant and equipment

278,208

273,182

Investments and other assets
Other

525,166

529,570△4,381△4,380Allowance for doubtful accounts
Total investments and other assets
Total noncurrent assets
Total assets

6

520,784

525,189

2,718,847

2,720,504

54,084,319

53,623,477

FY ended March 31, 2016
(As of March 31,2016)(Thousands of yen)
End of 1Q of FY ending
March 31, 2017(as of June 30, 2016)

LIABILITIESCurrent liabilities
Accounts payable-trade
Short-term loans payable

599,139
1,248,500

995,698
1,088,000

Current portion of bonds
Current portion of long-term loans payable

101,200
2,004,184

1,199,200
1,712,884

Income taxes payable
Provision for bonuses

973,017
134,643434,057
74,810

Provision for directors' bonuses
Construction warranty reserve

41,1506,800

12,0005,100Provision for loss on guarantees for rent
Other

41,7392,491,110

44,6182,097,483

Total current liabilities

7,641,484

7,663,851

1,413,300

280,000

13,642,252
578

12,818,856
312

Noncurrent liabilities
Bonds payable
Long-term loans payable
Deferred tax liabilities
Other

1,242,048

1,270,140

Total noncurrent liabilities

16,298,179

14,369,309

23,939,663

22,033,161

Capital stock
Capital surplus

8,387,211
2,871,767

8,387,211
2,871,767

Retained earnings
Treasury stock

18,885,910

20,342,702

△174

△174

Total shareholders' equity

30,144,715

31,601,508

Total liabilities
NET ASSETS
Shareholders' equity

Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment

2,951

2,668

△8,331△27,777

Total accumulated other comprehensive income△5,379△25,108

Minority interests
Total net assets
Total liabilities and net assets

7

5,320

13,91630,144,656

31,590,315

54,084,319

53,623,477

(2) Consolidated Quarterly Statements of Income and Consolidated Quarterly Statements of comprehensive
incomeConsolidated Quarterly Statements of Income

Net sales
Cost of sales

First Quarter of FY ended
March 31, 2016
(April 1,2015- June 30, 2015)
6,060,541
3,868,709(Thousands of yen)First Quarter of FY ended
March 31, 2017
(April 1,2016- June 30, 2016)
10,403,395
5,745,660

Gross profit

2,191,832

4,657,735

Selling, general and administrative expenses

768,440

1,086,827

1,423,391

3,570,908

Non-operating income
Interest income

2,560

3,492

Dividends income
Subsidy income

182
720

181
720

Other

197

667

3,659

5,062

Interest expenses
foreign currency transaction loss

52,0193,835

53,43046,654

Other

3,876

7,668

Operating income

Total non-operating income
Non-operating expenses

Total non-operating expenses
Ordinary income
Extraordinary loss
Loss on litigation
Total extraordinary losses

59,731

107,753

1,367,320

3,468,217

10,850-10,850-1,356,470

3,468,217

Income taxes-current

152,851

370,713

Income taxes-deferred

19,730571,935

Total income taxes

172,582

942,649

1,183,888

2,525,568

Income before income taxes and minority interests

Income before minority interests
Minority interests in income (loss)
Net income

8

-

△108

1,183,888

2,525,676

Consolidated Quarterly Statements of comprehensive income

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total other comprehensive income

First Quarter of FY ended
March 31, 2016
(April 1,2015- June 30, 2015)
1,183,888(Thousands of yen)First Quarter of FY ended
March 31, 2017
(April 1,2016- June 30, 2016)
2,525,568

△437
2,189

△19,446

△283

1,752

△19,729

Comprehensive income

1,185,640

2,505,839

Comprehensive income attributable toComprehensive income attributable to owners of the parent

1,185,640

2,505,947-△108

Comprehensive income attributable to minority interests9(3) Notes to quarterly financial statements(Notes regarding the conditions of going business)
Not applicable.
(Notes in the case of major changes in shareholders’ equity)
Not applicable.
(Segment information, etc.)
I First Quarter of Fiscal Year Ended March 31, 2016 (April 1, 2015 - June 30, 2015)
1. Information concerning sales and income or loss amount by reporting segment
Reporting segment

Total

Total

Other
business(Note 1)(Thousands of yen)
Quarterly consolidated
Adjustment
income/loss statement
amounts
amount(Note 2)
(Note 3)

Real Estate
Revitalization

Real Estate
Brokerage

Property
Management

Sales

5,162,828

405,971358,481

5,927,282

133,259

6,060,541―

6,060,541

Segment
income(loss)

1,506,643

366,132

166,6932,039,469

62,8402,102,310△678,918

1,423,391

Notes: 1. The classification “other business” refers to business segments that are not included in reporting segments, and includes
construction solution business and delinquent rent guarantee business and space rental business, etc.
2. The segment income adjustments amount, △678,918 thousand yen, includes △730,937 thousand yen in companywide expenses that are not allocated to reporting segments and 52,019 thousand yen in adjustment amounts for interest
expense. The company-wide expenses are mainly selling, general and administrative expenses that are not allocated toreporting segments.
3. Segment income (loss) is adjusted with operating incomes calculated in consolidated quarterly statements of income.

2. Information on impairment of non-current assets and goodwill etc. for each reporting segment
Not applicable.
II First Quarter of Fiscal Year Ending March 31, 2017 (April 1, 2016 - June 30, 2016)
1. Information concerning sales and income or loss amount by reporting segment
Reporting segment
Property
Management

Other
business(Note 1)

Total

Real Estate
Revitalization

Real Estate
Brokerage

Sales

9,357,287

226,796

430,975 10,015,059

388,336 10,403,395

Segment
income(loss)

3,869,109

182,092

202,383

195,936

Total

4,253,585

4,449,522(Thousands of yen)
Quarterly consolidated
Adjustment
income/loss statement
amounts
amount(Note 2)
(Note 3)―

10,403,395△878,613

3,570,908

Notes: 1. The classification “other business” refers to business segments that are not included in reporting segments, andincludes construction solution business and delinquent rent guarantee business and space rental business and hotel
operation business, etc.
2. The segment income adjustments amount, △878,613 thousand yen, includes △932,044 thousand yen in companywide expenses that are not allocated to reporting segments and 53,430 thousand yen in adjustment amounts for interest
expense. The company-wide expenses are mainly selling, general and administrative expenses that are not allocated toreporting segments.
3. Segment income (loss) is adjusted with operating incomes calculated in consolidated quarterly statements of income.

2. Information on impairment of non-current assets and goodwill etc. for each reporting segment
Not applicable.

10