Consolidated Results for the year ended November 30, 2021

Consolidated Operating results

Net sales

90,460 Millions of yen

year-on-year increase/ (decrease)
(10.5%)

Operating income

9,461 Millions of yen

year-on-year increase/ (decrease)
(45.5%)

Ordinary income

8,105 Millions of yen

year-on-year increase/(decrease)

(46.8%)

Profit attributable to owners of parent

10,012Millions of yen

year-on-year increase/ (decrease)
(5.7%)

Net income per share

242.52yen

year-on-year increase/ (decrease)

Explanation of Business Results

During the subject fiscal year, the Japanese economy continued to face an uncertain outlook as a result of the spread of coronavirus infections and outbreaks of coronavirus variants as well as soaring energy resource prices. Including the declaration of emergency that had been issued and applied from January 2021 and quasi-emergency measures to prevent the spread of infections, priority measures were lifted at the end of September 2021. In addition, the vaccination rate stood at around 80%, and the sense of expectation for a normalization of socio-economic activities was raised by the third round of vaccinations having been started. However, infections have spread again due to the highly contagious omicron variant, and the timing of when the coronavirus pandemic would subside remained unclear.
    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 remained favorable, because they are not easily affected by economic trends or the effects of the COVID-19 pandemic. Also, in the hotel industry, the flow of people that had been stagnant was slowly returning to normal and on a recovery trend due to the lifting of the state of emergency.
    Under such conditions, the Group completed its S-RESIDENCE series of rental condominiums, which comprises approximately 2,600 units in 41 buildings, and proceeded to build a stable profit base. In addition, believing that the hotel industry is a field where significant growth can be expected in the years to come, we predict that consumption on accommodation and tourism will gradually increase and have thus implemented initiatives in anticipation of the post-COVID era. As a hotel investment initiative in the subject fiscal year, in May 2021 we entered into a capital and business alliance with Wealth Management, Inc. (WM), which is listed on the Second Section of the Tokyo Stock Exchange, for joint investments in a hotel REIT and hotel development funds. From the subject fiscal year, WM has been an equity-method affiliate. In October, we decided to conduct same-boat investment as a sponsor of Samty Japan Hotel REIT, Inc., a hotel-focused real estate investment corporation, and are currently advancing preparations for its listing on the Tokyo Stock Exchange. In November, the special-purpose company in the hotel development project with the tentative name Shangri-La Kyoto Nijojo was made an equity-method affiliate.
    As a result, for the subject fiscal year, net sales amounted to \90.4 billion (down 10.5% from the previous fiscal year), with operating income of \9.4 billion (down 45.5%), ordinary income of \8.1 billion (down 46.8%), and profit attributable to owners of parent of \10.0 billion (down 5.7%).

Consolidated Financial condition

Total assets

349,194 Millions of yen

YOY

139.2%

Net assets

103,028 Millions of yen

YOY
132.6%

Equity ratio

27.0

YOY
-3.7point

Summary of Financial Position for the Subject Period

Assets
Total assets at the end of the subject fiscal year amounted to ¥349.1 billion, an increase of ¥98.3 billion compared with the end of the previous fiscal year. Intending to maximize income gain in accordance with the Samty Toughening Plan (Post-COVID Version) Medium-Term Management Plan announced in January 2021, the Group has a policy of holding completed properties for a certain period of time. In addition, properties such as Meiji-dori Business Center Main Building, Annex (Hakata-ku, Fukuoka-shi), S-RESIDENCE Temma Gracis (Kita-ku, Osaka-shi), and S-RESIDENCE Maruyama Omotesando (Chuo-ku, Sapporo-shi) have been successfully acquired and progress made toward completion. As a result, real estate for sale, real estate for sale under construction, and net property and equipment (income properties, etc.) increased by ¥97.5 billion, and cash and deposits decreased by ¥0.8 billion.
Liabilities
Total liabilities at the end of the subject fiscal year amounted to ¥246.1 billion, an increase of ¥73 billion compared with the end of the previous fiscal year. The main factors contributing to the increase/decrease were an increase of ¥62.2 billion in borrowings accompanying the acquisition of more than 100 properties (combined total of sites for development and of income properties) and the issuance of ¥12 billion of bonds with share acquisition rights.
Net Assets
Total net assets at the end of the subject fiscal year amounted to ¥103 billion, an increase of ¥25.3 billion compared with the end of the previous fiscal year. The main contributory factors for the increase/decrease were: an increase in capital and capital surplus of ¥8.8 billion from the conversion of the 1st Unsecured Convertible Bonds with Stock Acquisition Rights; a decrease in treasury stock (at cost) of ¥1.2 billion; retained earnings of ¥10 billion from the posting of profit attributable to owners of parent; and an increase of ¥8 billion in non-controlling interests due to two companies—S-VIN VIETNAM REAL ESTATE TRADING JOINT STOCK COMPANY (a company engaged in a smart city, for-sale housing project in Hanoi, Vietnam) and R&K Limited (a special purpose company that holds Aloft Osaka Dojima)—having been made consolidated subsidiaries.