Consolidated Results for the third quater of FY11/21

 

Consolidated Operating results

Net sales

55,607 Millions of yen

year-on-year increase/ (decrease)
17.3%

Operating income

5,466 Millions of yen

year-on-year increase/ (decrease)
(21.6%)

Ordinary income

6,466 Millions of yen

year-on-year increase/(decrease)

19.8%

Profit attributable to owners of parent

8,138 Millions of yen

year-on-year increase/ (decrease)
122.8%

Net income per share

202.31 yen

year-on-year increase/ (decrease)

Explanation of Business Results

During the subject third quarter cumulative period, in addition to the holding of the Tokyo Olympic and Paralympic Games, areas under the state of emergency expanded due to the spread of the Delta variant of COVID-19. Currently, socio-economic activities are returning to normal backed by the increasing vaccination rate and the decision by the government’s Digital Society Promotion Council to issue “vaccine passports (vaccination certificates)” online for overseas travels.

In the real estate industry, of which the Samty Group is a part, with regard to rental apartments, occupancy rates, rent levels, and property sales prices have remained favorable, because they are not easily affected by economic trends or the effects of the COVID-19 pandemic. Furthermore, according to the Land Value LOOK Report by the Ministry of Land, Infrastructure, Transport and Tourism, a greater number of areas saw land value increase for the third consecutive quarter, indicating no significant impact of COVID-19 on land value.

Under such conditions, the Samty Group launched initiatives designed to maximize income gain, such as the selling of a rental condominium in the latter half of the fiscal year, in accordance with the strategy of the medium-term management plan announced in January 2021. With regard to the purchase of properties, favorable progress was made with purchases of sites for development and of profitable properties. In May 2021, as a hotel investment initiative we entered into a capital and business alliance agreement with Wealth Management, Inc. (hereinafter “WM”), which is listed on the Second Section of the Tokyo Stock Exchange, and made WM an equity-method affiliate in the subject third quarter period. One of the basic policies under the medium-term management plan is to continue efforts to establish a hotel REIT with an eye toward the post-COVID hotel market. We will accelerate investment in carefully selected hotels by collaborating with WM, a developer that possesses strengths in hotel revitalization and development and information routes for investment projects. We are also moving ahead with procedures to establish a hotel REIT that we have been planning.

As a result, for the subject third quarter cumulative period, net sales amounted to \55,607 million (up 17.3% from the same period of the previous fiscal year), with operating income of \5,466 million (down 21.6%), ordinary income of \6,466 million (up 19.8%), and profit attributable to owners of parent of \8,138 million (up 122.8%).

Segment information

(Unit:Millions of yen)(cumulative total)

The performance of  each segment is as follows.

Real Estate Business

The Real Estate Business comprises the planning, development, and sales of real estate properties, including the Samty brand S-RESIDENCE series, as well as the planning, development, revitalization and sales of income properties and other real estate.

During the subject third quarter cumulative period, in addition to having sold 23 properties of real estate for sale located mainly in major cities across the nation to Samty Residential Investment Corporation (total sales price of around \25 billion), the Company sold “Agora Kyoto Shijo” (Shimogyo-ku, Kyoto-shi) and “Agora Kyoto Karasuma” (Shimogyo-ku, Kyoto-shi) as hotel assets.

As a result, net sales in the Real Estate Business segment amounted to \47,306 million (up 19.5% from the same period of the previous fiscal year), with operating income of \8,719 million (up 4.7%).

 

Property Leasing Business

The Property Leasing Business comprises the leasing and management of rental apartments, office buildings, commercial facilities, hotels, and other properties.

Aiming to maximize income gain, the Company conducted steady property acquisition during the subject third quarter cumulative period and acquired 46 income properties totaling around \39.9 billion. In addition, the Company completed development of 30 buildings.

As a result, net sales in the Property Leasing Business segment amounted to \6,111 million (up 0.6% from the same period of the previous fiscal year), with operating income of \2,606 million (down 4.2%).

Other Business

Other Business comprises the holding and operating of hotels as well as a condominium management business and construction/renovation business.

During the subject third quarter cumulative period, the number of hotels the Company holds/operates reached 17 as a result of opening and acquiring “S-PERIA HOTEL Fukuoka Nakasu” (Hakata-ku, Fukuoka-shi) and “Aloft Osaka Dojima” (Kita-ku, Osaka-shi). Although the hotels held/operated by the Samty Group have been impacted by the declaration of a state of emergency, demand is expected to return due to the increase in the vaccination rate. Furthermore, as an initiative for hotel investment, the Company has concluded a capital and business alliance agreement with WM and made WM an equity-method affiliate to press ahead with investment in carefully selected hotels.

As a result, net sales in the Other Business segment amounted to \2,189 million (up 26.2% from the same period of the previous fiscal year), with an operating loss of ¥2,348 million (operating loss of \602 million in the same period of the previous fiscal year).

Consolidated Financial condition

Total assets

332,925 Millions of yen

YOY

132.7%

Net assets

88,923 Millions of yen

YOY
114.4%

Equity ratio

24.7

YOY
-6.0point

Qualitative Information on the Consolidated Financial Position

Assets
Total assets at the end of the subject third quarter period amounted to \332,925 million, an increase of \82,061 million compared with the end of the previous fiscal year. The main factor for the increase/decrease was a decrease of \13,221 million in cash and deposits due to an increase of \100,571 million in real estate for sale, real estate for sale under construction and net property and equipment (income properties, etc.) in line with the steady progress in property acquisition. 

Liabilities
Total liabilities at the end of the subject third quarter period amounted to \244,001 million, an increase of \70,837 million compared with the end of the previous fiscal year. The main factor for the increase/decrease was an increase of \65,460 million in borrowings accompanying the acquisition of over 90 properties (combined total of sites for development and of income properties). 

Net Assets
Total net assets at the end of the subject third quarter period amounted to \88,923 million, an increase of \11,223 million compared with the end of the previous fiscal year. The main factors for the increase/decrease were increases of \8,138 million in retained earnings from posting of profit attributable to owners of parent; of \5,920 million in non-controlling interests from making S-VIN VIETNAM REAL ESTATE TRADING JOINT STOCK COMPANY (a company engaged in smart-city for-sale housing project in Hanoi City, Vietnam)and R&K Limited (a special purpose company that holds Aloft Osaka Dojima) consolidated subsidiaries, and such.