Risk of Unsold Real Estate and Inventory Write-Downs

「This was mainly due to cash and deposits increasing by ¥969.075 million, among other factors.」

「This was mainly due to property held for sale increasing by ¥74.915 million, among other factors.」

「Property held for sale ¥43.837 million ¥40.883 million」

「Property held for sale ¥43.837 million ¥42.360 million」

「This was mainly due to inventories decreasing by ¥306.635 million, among other factors.」

「Cash provided by operating activities was ¥269.730 million, compared with ¥353.979 million used in the same quarter of the previous year. This was mainly due to cash inflows of ¥179.931 million from a decrease in inventories and ¥99.124 million from a decrease in other assets, among other factors.」

「At the end of the third quarter of the current consolidated fiscal year, current assets had decreased by ¥963.760 million from the end of the previous fiscal year to ¥1,913.224 million. This was mainly due to property held for sale decreasing by ¥1,329.320 million, despite cash and deposits increasing by ¥525.572 million, among other factors.」

「During the cumulative second quarter, we sold 2 properties held for sale and recognized an inventory write-down of ¥45,374 thousand for properties held for sale in Asahikawa and Mobara for which sale and purchase agreements had already been signed.」

「This was mainly due to property held for sale decreasing by ¥1,196.260 million, despite cash and deposits increasing by ¥666.325 million, among other factors.」

「Because the impact of the spread of COVID-19 remained uncertain, the company reviewed the planned selling prices of some property held for sale during the first quarter and recognized inventory valuation losses in order to recover invested capital early. As that property had been sold by the end of the second quarter, the company prepared its accounting estimates on the assumption that any further impact on the valuation of property held for sale and other assets would be immaterial. However, the impact of the spread of COVID-19 remains subject to many uncertainties, and if real estate market conditions deteriorate, this could materially affect the financial position, operating results and cash flows of the group from the following quarter's consolidated accounting period onward, including through the recognition of valuation losses on property held for sale and other assets.」

「Because the impact of the spread of COVID-19 remained uncertain, we revised the planned sale prices of some properties held for sale during the first quarter to accelerate recovery of invested capital and recognized an inventory write-down. These properties had been sold by the end of the second quarter, and we prepared the accounting estimates on the assumption that any further impact on the valuation of properties held for sale and other assets would be minor.」

「Because the impact of the spread of COVID-19 remained uncertain, we revised the planned sale prices of some properties held for sale to accelerate the recovery of invested capital. This led to several sale and purchase agreements being signed from July 2020 onward and the recognition of an inventory write-down totaling ¥84,397 thousand.」

「In the principal investment business, the company continued its efforts to sell the property held for sale, but completed only 2 sales. In addition, it recognized an inventory valuation loss of ¥116.765 million on property held for sale following a review of the selling prices.」

「This was mainly due to property held for sale increasing by ¥1,013.087 million and other current assets increasing by ¥342.457 million, despite cash and deposits decreasing by ¥1,114.344 million and operating investments decreasing by ¥98 million, among other factors.」

「This was mainly due to property held for sale increasing by ¥1,068.977 million, despite cash and deposits decreasing by ¥981.434 million, among other factors.」

「This was mainly due to a ¥661.478 million increase in real estate held for sale and a ¥337.895 million increase in other current assets, despite a ¥547.954 million decrease in cash and deposits, among other factors.」

「At the end of the current fiscal year, current assets decreased by ¥403.641 million from the end of the previous fiscal year to ¥4,917.992 million. This was mainly due to a ¥609.705 million decrease in real estate held for sale, despite a ¥366.128 million increase in cash and deposits, among other factors.」

「At the end of the third quarter of the current fiscal year, current assets increased by ¥57.777 million from the end of the previous fiscal year to ¥5,379.411 million. This was mainly due to a ¥594.861 million increase in cash and deposits, despite a ¥603.564 million decrease in real estate held for sale, among other factors.」

「At the end of the second quarter of the current fiscal year, current assets increased by ¥114.424 million from the end of the previous fiscal year to ¥5,436.058 million. This was mainly due to an ¥874.636 million increase in cash and deposits, despite a ¥798.187 million decrease in real estate held for sale, among other factors.」

「However, because the real estate held for sale by the Company was not sold during the cumulative first quarter of the current fiscal year, revenue was ¥184.833 million, down 7.6% from the same quarter of the previous year; operating loss was ¥56.079 million, compared with an operating loss of ¥44.265 million in the same quarter of the previous year; ordinary loss was ¥68.755 million, compared with an ordinary loss of ¥52.030 million; and net loss attributable to owners of the parent was ¥81.093 million, compared with a net loss attributable to owners of the parent of ¥33.066 million.」

「This was mainly due to a ¥1,189.853 million decrease in real estate held for sale, despite a ¥514.587 million increase in cash and deposits, among other factors.」

「This was mainly due to a ¥1,178.286 million decrease in real estate held for sale and a ¥123.779 million decrease in operating investment securities, despite a ¥613.706 million increase in cash and deposits, among other factors.」

「This was mainly due to the recognition of quarterly profit before income taxes and other adjustments of ¥112.754 million, a ¥123.779 million decrease in operating investment securities, and an ¥827.778 million decrease in inventories, among other factors.」

「However, because we did not sell any of the properties held for sale during the cumulative first quarter, revenue was ¥200,059 thousand, down 90.2% year on year; operating loss was ¥44,265 thousand, compared with operating profit of ¥659,734 thousand in the same period of the previous year; ordinary loss was ¥52,030 thousand, compared with ordinary profit of ¥638,537 thousand; and net loss attributable to owners of the parent was ¥33,066 thousand, compared with net income attributable to owners of the parent of ¥440,868 thousand.」

「This was mainly due to a ¥670.000 million decrease in operating investments related to completed development projects, together with a ¥1,386.692 million increase in real estate held for sale, among other factors.」

「This was mainly due to a ¥670.000 million decrease in operating investments following the completion of part of a development project, together with a ¥472.364 million increase in cash and deposits and a ¥1,385.215 million increase in real estate held for sale, among other factors.」

「This was mainly due to the recognition of quarterly profit before income taxes and other adjustments of ¥542.433 million and a ¥670.000 million decrease in operating investments, despite a ¥1,340.879 million increase in inventories, among other factors.」

「After acquisition, we generally work toward selling properties within 1 year in accordance with our plans. However, if sales do not proceed as planned and properties remain in inventory for reasons such as sudden market changes, or if an inventory write-down is recognized following a review of inventory valuations, this may affect the group's operating results and financial position.」