May 15, 2017

DAIKYO INCORPORATED

Summary of Consolidated Financial Results For the Year Ended March 31, 2017

DAIKYO INCORPORATED announces financial results for the year ended March 31, 2017. For more details, please refer to Full Year Financial Results and Fact Sheets.

Consolidated Statements of OperationsMillions of yen

2016 2017 Change Forecast

Year ended March 31

334,853

325,360

9,492

340,000

18,318

20,523

2,204

20,000

17,093

19,967

2,874

19,000

12,628

14,044

1,416

14,000

Net sales Operating income Ordinary income

Profit attributable to

owners of parent

2017

Consolidated Financial Results Summary

During the fiscal year under review, net sales decreased ¥9,492 million, or 2.8% year on year, to ¥325,360 million, operating income increased ¥2,204 million, or 12.0%, to ¥20,523 million, and ordinary income increased ¥2,874 million, or 16.8%, to ¥19,967 million. Profit attributable to owners of parent increased ¥1,416 million, or 11.2%, to

¥14,044 million.

Sales in the real estate development business declined due to fewer plans for completed condominiums than in the previous fiscal year. However, this was offset by an increase in income due to a higher condominium gross profit margin over the previous fiscal year, and in addition, higher income and profit in both the real estate management segment and real estate brokerage segment.

Results by Segment

Real Estate Management

Net sales

Operating income

(Millions of yen

Year ended

2016

2017

Year-on-year

2016

2017

Year-on-year

March 31

162,821 163,339 518 9,664 10,684 1,020 Segment Summary
  • In the real estate management segment, net sales increased ¥986 million year on year, due to gains in the number of management contracts for buildings and other facilities.

  • Although sales of planned repair and maintenance work and small-scale contract work on condominiums increased, in work related to buildings and facilities, sales fell for work related to solar power generation plants. As a result, contract work sales decreased by ¥690 million year on year.

  • As a result of these factors, net sales rose by ¥518 million and operating income increased by ¥1,020 million thanks to the success of cost-saving initiatives in each business.

  • The number of condominium units managed totaled 531,957 units (530,095 units at the end of the previous fiscal

    year).

  • The volume of contract work orders received as of the end of the fiscal year was ¥28,339 million (compared with ¥

Real Estate Brokerage

Net sales

Operating income

(Millions of yen

Year ended March 31

2016

2017

Year-on-year

2016

2017

Year-on-year

54,904

62,249

7,345

3,233

3,449

216

Segment Summary

  • Brokerage transactions increased over the previous fiscal year, and the unit price for sales also rose. As a result,

  • Exsisting real estate sales increased ¥6,744 million year on year, as a result of the number of renovated condominium units sold having gained year on year, in conjunction with an increase in the average unit price.

  • As a result, net sales increased ¥7,345 million year on year, and operating income increased ¥216 million.

  • The number of brokerage transactions increased by 264 to 6,828 transactions. In addition, the number of renovated condominium units sold increased by 229 to 1,465 units, increasing for the fifth straight fiscal year and reaching a record-high number of units sold.

  • The number of brokerage offices was 70 as of the end of the fiscal year (compared with 67 offices as of the end of

real estate brokerage income increased ¥358 million over the previous fiscal year.

the previous fiscal year).

Real Estate Development and Sales

Net sales

Operating income

(Millions of yen

Year ended March 31

2016

2017

Year-on-year

2016

2017

Year-on-year

122,211

104,684

17,526

8,667

8,987

320

Segment Summary

The number of completed condominiums fell from 44 (2,830 units) in the previous fiscal year to 38 (2,601 units) in

this fiscal year due to a rigorous property acquisition process in three metropolitan areas. As a result, the number of condominiums sold decreased by 415 over the previous fiscal year to 2,565. Net sales fell ¥14,105 million to ¥ 93,969 million.

The condominium gross profit margin rose 2.8 pp year on year to 25.7% as a result of appropriate profit levels

being made the top priority in sales activities, in parallel with monitoring market trends.

As a result, net sales decreased ¥17,526 million year on year, and operating income increased ¥320 million.

The number of completed new condominiums in inventory fell from 450 units as of the end of the previous fiscal year to 294 units at the end of the fiscal year under review.

In condominium sales, the number of contracted units decreased by 306 units year on year to 2,169 units. Progress

made in contracts as of the end of the fiscal year amounts to 45% of the full-year forecast of condominium sales for the fiscal year ending March 31, 2018.

State of Dividends

The Company has decided to pay a year-end dividend of ¥6 per share, as announced on October 26, 2016.

Outlook for the Fiscal Year Ending March 31, 2018

(Millions of yen

Year ended March 31

2017 Forecast 2018 Change Percentage

change

Net sales

325,360

340,000

14,640

4.5%

Operating income

20,523

19,000

1,523

7.4%

Ordinary income

19,967

18,000

1,967

9.9%

Net income attributable

to parent company

14,044

12,000

2,044

14.6%

shareholders

Performance Forecast by Segment (Millions of yen

Year ended March 31

2017

Forecast 2018

Change

Net sales

Operating income

Net sales

Operating income

Net sales

Operating income

Real Estate Development and Sales

163,339

10,684

177,000

11,300

13,660

615

Real Estate Management

62,249

3,449

65,000

3,900

2,750

450

Real Estate Brokerage

104,684

8,987

102,000

7,100

2,684

1,887

Adjustments (Eliminations or Corporate Assets/Expenses)

4,913

2,598

4,000

3,300

913

701

Total

325,360

20,523

340,000

19,000

14,639

1,523

In the fiscal year ending in March 2018, we expect gains in sales and income in both the real estate management segment and the real estate brokerage segment, but forecast lower sales and income primarily due to a reduction in the number of completed condominiums in the real estate development and sales segment. As a result, we expect consolidated net sales to increase ¥14,639 million to ¥340,000 million and operating income to decrease ¥1,523 million to ¥19,000 million.

We are making steady progress in acquiring sites, primarily in key outlying cities, and expect the number of

completed new condominiums at the end of the fiscal year ending in March 2019 to total about 2,650, exceeding levels in the fiscal years ended in March 2017 and ending in March 20182,256 units as planned).

Based on our basic policies for shareholder returns-stability, continuity and enhancing sustainable returns-we have taken into account earnings forecasts as well as the balance between dividends and investments for profit growth and plan to pay dividends of ¥60 per share. (*1)

(*1) At the meeting of the Board of Directors held on May 15, 2017, a decision was reached to submit proposals to the 93rd Ordinary General Meeting of Shareholders of the Company, to be held on June 22, 2017, with respect to share consolidation. Shares will be consolidated at the ratio of 10 shares to 1 share and this change will be subject to approval at the 93rd Ordinary General Meeting of Shareholders, and will take effect on October 1, 2017. As a result, the dividends per share in the next fiscal year, taking into account this share consolidation, is noted here. We forecast dividends of ¥6 per share in the next fiscal year when not taking into account the share consolidation.

Reference: Percentage of completed new condominium units in each quarter in fiscal 2017 and fiscal 2018 (*2)

Percentage of completed condominium units in fiscal 2017

Percentage of completed condominium units in fiscal 2018 (forecast)

42%

57%

70%

60%

50%

40%

22%

17%

12% 8%

24%

18%

30%

20%

10%

0%

1Q 2Q 3Q 4Q

(*2) The percentage of completed new condominium units is calculated based on the first day of residence.

Daikyo Inc. published this content on 15 May 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 16 May 2017 01:37:08 UTC.

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