LEOPALACE21 : Consolidated Financial Statements (Japanese Accounting Standard, for the six months ended September 30, 2015)

Microsoft Word - Consolidated Financial Statements (Japanese Accoun Consolidated Financial Statements (Japanese Accounting Standard) November 6, 2015 (For the six months ended September 30, 2015)

Name of Company Listed: Leopalace21 Corporation Stock Listing: Tokyo Stock Exchange Code Number: 8848 URL: http://eg.leopalace21.com/ Location of Head Office: Tokyo Representative: Position: President and CEO Name: Eisei Miyama

Name of Contact Person: Position: Executive Officer Name: Bunya Miyao Telephone: +81-3-5350-0216 Scheduled Date of Filing of Securities Report (Japanese only): November 13, 2015

Scheduled Date of Commencement of Dividend Payments: - Supplemental Explanatory Material Prepared: Yes

Results Briefing Held: Yes

1. Results for the Six Months ended September 30, 2015 (April 1, 2015 through September 30, 2015)

2. Consolidated financial results (Amounts less than one million yen are omitted) (The percentage figures indicate rate of gain or loss compared with the same period last year)

   Net sales		Operating profit		Recurring profit		Net income attributable to shareholders of the parent
   Six months ended September 30, 2015	Million yen	%	Million yen 10,401 6,087	%	Million yen 9,645 5,546	%	Million yen 8,211 5,066	%
   	252,316	8.3		70.9		73.9		62.1
   Six months ended September 30, 2014	233,037	0.6		13.4		26.7		29.2

   (Note) Comprehensive income As of September 30, 2015: 8,940 million yen (146.8%); As of September 30, 2014: 3,622 million yen (-55.9%)

   
   

   Net income per share	Diluted net income per share
   Six months ended September 30, 2015 Six months ended September 30, 2014	Yen 31.24 19.27	Yen ― ―

   
   

3. Consolidated financial position

Total assets	Net assets	Equity ratio		Equity per share
As of September 30, 2015	Million yen	Million yen	%	Yen
	309,550	135,437	43.7	515.04
As of March 31, 2015	308,274	126,473	41.0	481.05

(Reference) Shareholders' equity As of September 30, 2015: 135,390 million yen; As of March 31, 2015: 126,455 million yen




4. Dividend Status

   Dividend per share
   End of Q1		End of Q2		End of Q3		End of Q4		Annual
   FY ended March 31, 2015	Yen	― ―	Yen	Yen	―	Yen	Yen
   			0.00			0.00	0.00
   FY ending March 31, 2016			0.00
   FY ending March 31, 2016 (Estimate)	―		10.00		10.00

   (Note) Restatement of most recent dividend forecast: Yes

   For details of the restatement, please refer to 'Notice Concerning Revision of Dividend Forecasts' disclosed on November 6, 2015.

   
   

5. Estimation of Business Results for the Fiscal Year ending March 31, 2016 (April 1, 2015 through March 31, 2016)

   (The percentage figures for full year indicate rate of gain or loss compared with the previous FY, while those for the interim

   period indicate rate of gain or loss compared with the same term in the previous FY)

   Net Sales		Operating profit		Recurring profit		Net income attributable to shareholders of the parent		Net income per share
   FY ending March 31, 2016	Million yen 525,000	% 8.7	Million yen 19,500	% 32.1	Million yen 18,000	% 34.1	Million yen 16,000	% 10.3	Yen 60.87

   (Note) Restatement of most recent consolidated business results forecast: None

6. Other

1. Changes in major subsidiaries during the subject period (change in specific subsidiaries resulting in a change in the scope of consolidation): None

   
   

2. Use of accounting procedures specific to the preparation of quarterly financial statements: Yes

   (Note) For details, please refer to P.6 '2. Matters Relating to Summary Information (2) Application of Accounting Methods Specific to the Preparation of Quarterly Consolidated Financial Statements.'

   
   

3. Changes in accounting principles, procedures or reporting methods used in preparation of financial statements (changes in important items concerning preparation of financial statements)

4. Changes in accounting policies accompanying revision of accounting standards, etc.: Yes

5. Changes in accounting policies other than (i) above: None

6. Changes in accounting estimates: None

7. Restatements: None

(Note) For details, please refer to P.6 '2. Matters Relating to Summary Information (3) Changes in Accounting Policy, Changes in Accounting Estimates, and Restatements.'




1. Total number of outstanding shares (common stock)

2. Total number of outstanding shares at term end (including treasury stock)

   As of September 30, 2015: 267,443,915 shares, As of March 31, 2015: 267,443,915 shares

3. Total treasury stock at term end

   As of September 30, 2015: 4,569,430 shares, As of March 31, 2015: 4,569,430 shares

4. Average number of outstanding shares during the period

As of September 30, 2015: 262,874,485 shares, As of September 30, 2014: 262,874,672 shares




*Indication regarding the status of auditing:

These financial statements are not subject to auditing under the Financial Instruments and Exchange Act.




*Explanation on the proper use of the business forecasts, and other special notices: (Note on the business forecasts and other forward-looking statements)

The business forecasts and other forward-looking statements contained in this report are based on information currently available to the Company and on certain assumptions that Leopalace21 has judged to be reasonable. Readers should be aware that a variety of factors might cause actual results to differ significantly from these forecasts.

For assumptions of business forecasts and notes on the proper use of these forecasts, please refer to P.6 '1. Business Results (3) Explanation Concerning Business Forecasts and Other Forward-looking Statements.'




(Method for the acquisition of supplemental explanatory material)

Supplemental Explanatory Material on quarterly financial statements is scheduled to be posted on the Company's web site on November 6, 2015.

【Table of Contents】

1. Business Results 4

2. Analysis of Business Results 4

3. Analysis of Consolidated Financial Position 5

4. Explanation Concerning Business Forecasts and Other Forward-looking Statements 6

5. Matters Relating to Summary Information 6

6. Changes in Significant Subsidiaries during the Second Quarter under Review 6

7. Application of Accounting Methods Specific to the Preparation of Quarterly Consolidated Financial Statements 6

8. Changes in Accounting Policy, Changes in Accounting Estimates, and Restatements 6

9. Consolidated Financial Statements 7

10. Consolidated Balance Sheets 7

11. Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income 9

    Consolidated Statements of Operations 9

    Consolidated Statements of Comprehensive Income 10

12. Consolidated Cash Flow 11

13. Notes Regarding Consolidated Financial Statements 12

(Notes Regarding the Premise of the Company as a Going Concern) 12

(Note Regarding Significant Changes in Shareholders' Equity) 12

(Segment Information) 13

1. Business Results (1) Analysis of Business Results

(Million yen)

Net sales	Operating profit	Recurring profit	Net income attributable to shareholders of the parent
Six months ended September 30, 2015	252,316	10,401	9,645	8,211
Six months ended September 30, 2014	233,037	6,087	5,546	5,066
Difference	19,279	4,314	4,098	3,145




During the subject six months, the domestic economy showed gradual progression, such as signs of recovery in individual consumption, due to an improvement in corporate earnings, employment, and income.

In the rental housing industry, negative effects of the rush demand from the increase in consumption tax began to fade, and as apartment construction continues to be an ideal inheritance tax-reduction strategy, new housing starts of leased units trended at a steady pace. On the other hand, as the number of vacant houses increases due to oversupply, achieving stable occupancy rates requires constructing apartments in areas with high demand, as well as providing high-quality housing and services are required.

Under these conditions, the Leopalace21 Group (the 'Group') aims to achieve targets of the Medium-term Management Plan 'EXPANDING VALUE,' which is in its second year, by building a solid management structure focusing on the core businesses, made up of Leasing and Construction. In addition, the Group aims to establish new businesses that will contribute to future growth.

As a result, net sales for the first half were ¥252,316 million (up 8.3% year-on-year). Operating profit was ¥10,401 million (up 70.9% year-on-year), recurring profit was ¥9,645 million (up 73.9% year-on-year), and net income attributable to shareholders of the parent was ¥8,211 million (up 62.1% year-on-year).

The Group's Construction Business has many building construction contracts stipulating completion in the fourth quarter, which is when demand for apartments is highest. In the Leasing Business, the number of apartments under management will increase as apartments are completed, so seasonal fluctuations put a preponderance of earnings into the fourth quarter.




(Actual figures by segment) (Million yen)

Net sales			Operating profit
Six months ended September 30, 2014	Six months ended September 30, 2015	Difference	Six months ended September 30, 2014	Six months ended September 30, 2015	Difference
Leasing Business	197,432	203,597	6,164	9,561	12,212	2,650
Construction Business	24,650	35,344	10,693	(1,374)	391	1,766
Elderly Care Business	5,275	5,371	95	(237)	(576)	(338)
Hotels & Resort Business	4,258	5,538	1,280	(130)	(301)	(171)
Others	1,418	2,464	1,045	262	510	248
Adjustments	－	－	－	(1,994)	(1,835)	158
Total	233,037	252,316	19,279	6,087	10,401	4,314




(i) Leasing Business

The occupancy rate at the end of the second quarter was 87.70% (up 1.37 points from the end of the same quarter last year) and the average occupancy rate for the period was 87.56% (up 1.60 points year-on-year).

In the Leasing Business, to establish stable profits led by occupancy improvement, the Group implemented measures such as tenant recruitment utilizing direct leasing offices, franchises, and local real estate brokers, as well as expanding tenant services including 'Room Customize' and security system installations. In addition, the Group further strengthened sales against corporate and foreign customers as well as reduced costs by reviewing routine property management tasks.

The number of units under management at the end of the second quarter was 558,000 (increasing 3,000 from the end of the last fiscal year), the number of direct offices was 188 (no change from the end of the last fiscal year), and the number of franchise offices was 132 (decreasing 9 from the end of the last fiscal year).

As a result, net sales amounted to ¥203,597 million (up 3.1% year-on-year), and operating profit was ¥12,212 million (up 27.7% year-on-year).