Financial Results for the Third Quarter
From June 1, 2020 to February 28, 2021
ERI Holdings Co., Ltd.
March 30, 2021
Impact of coronavirus (COVID-19)
Year-on-year changes of the number of main services
Number of Housing Design Performance Evaluation of detached houses nationwide 30%
Number of Building Confirmation by ERI group
Number of Housing Design Performance Evaluation of detached houses of ERI groupNumber of Building Confirmations nationwide
Consumption tax expansion(8%→10%)
20%
COVID-19
-10%
-20%
10%
-30%
Jun. 2019
Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb.
2020
2021
Summary
Decrease in revenue and earnings year-on-year
Both ordinary income and net income returned to profit by a bottoming out of orders and continual cost reduction efforts.
The third quarter result has been back on the recovery track in line with our initial expectations.
Partly due to an influence by the second issuance of the state of emergency declaration, our client's operational restraint still have persisted by COVID-19.
Both new housing and non-housing starts were still sluggish, however a shrink of new housing starts became more moderate.
Both Building Confirmation and Inspection and Housing Performance Evaluation services revenue decreased due to new housing and non-housing starts slowdown.
Solution and Other services revenue also decreased.
Consolidated financial results
(Millions of yen) | 3Q previous fiscal year (Jun. 2019- Feb. 2020) | 3Q reporting fiscal year (Jun. 2020- Feb. 2021) | Change | |
Amounts | Ratio | |||
Net Sales Operating Profit Operating Profit Ratio Ordinary Profit Ordinary Profit Ratio Profit Attributable to Owners of Parent Profit per Share (Yen) | 11,102 320 2.9% 382 3.4% 211 27.62 | 10,363 22 0.2% 86 0.8% 29 3.83 | ▲738 ▲298 - ▲296 - ▲181 ▲23.79 | ▲6.7% ▲93.1% - ▲77.4% - ▲85.9% ▲86.1% |
* 3Q reporting includes P/L numbers of Sakoken Co., Ltd. third quarter, from Oct. 2020 to Dec. 2020.
Consolidated financial results by segment
(Millions of yen) | 3Q previous fiscal year (Jun. 2019- Feb. 2020) | 3Q reporting fiscal year (Jun. 2020- Feb. 2021) | Change | Segment Profit | Change | |
Amounts | Ratio | |||||
Building Confirmation and Inspection and its related services Housing Performance Evaluation and its related services Solution Services Others | 5,958 [53.7%] 2,899 [26.1%] 978 [8.8%] 1,266 [11.4%] | 5,741 [55.4%] 2,608 [25.2%] 837 [8.1%] 1,177 [11.3%] | ▲217 ▲291 ▲141 ▲88 | ▲3.6% ▲10.1% ▲14.4% ▲7.0% | 106 47 ▲37 ▲46 | ▲106 ▲82 ▲105 ▲2 |
Net Sales Total | 11,102 [100.0%] | 10,363 [100.0%] | ▲738 | ▲6.7% | 70 | ▲297 |
▲106
▲105
▲2
* 3Q reporting includes P/L numbers of Sakoken Co., Ltd. third quarter, from Oct. 2020 to Dec. 2020.
▲297
Main operating figures | Consolidated
3Q previous fiscal year (Jun. 2019 - Feb. 2020) | 3Q reporting fiscal year (Jun. 2020 -Feb. 2021) | Change | |||||
Cases | Amounts (Millions of Yen) | Cases | Amounts (Millions of Yen) | Cases | Amounts (Millions of Yen) | ||
Building Confirmations Final Inspections | 58,132 54,859 | 2,450 2,260 | 51,154 51,642 | 2,286 2,217 | ▲6,978 ▲3,217 | ▲164 ▲43 | |
Housing Design Performance Evaluations | Detached Houses Collective Houses | 28,338 20,008 | 752 201 | 22,964 16,228 | 698 183 | ▲5,374 ▲3,780 | ▲54 ▲18 |
Housing Construction Performance Evaluations | Detached Houses Collective Houses | 24,390 15,429 | 1,375 240 | 22,372 15,302 | 1,212 238 | ▲2,018 ▲127 | ▲163 ▲2 |
* 3Q reporting includes numbers of Sakoken Co., Ltd. third quarter, from Oct. 2020 to Dec. 2020.
Key service figures | Consolidated
3Q previous fiscal year (Jun. 2019 - Feb. 2020) | 3Q reporting fiscal year (Jun. 2020 -Feb. 2021) | Change | |||||
Cases | Amounts (Millions of Yen) | Cases | Amounts (Millions of Yen) | Cases | Amounts (Millions of Yen) | ||
Building Confirmations for medium to large size buildings (over 500 sqm) Technical Assessments for Long-life Quality Housings Inspections for Housing Defect Liability Insurance Evaluation for Compliance with Energy Consumption Performance of Buildings | 3,727 21,757 30,335 1,219 | 1,088 298 279 196 | 3,447 18,068 28,177 1,166 | 1,036 254 247 183 | ▲280 ▲3,689 ▲2,158 ▲53 | ▲52 ▲44 ▲32 ▲13 | |
BELS Certifications | Non-housings Housings | 130 4,294 | 26 79 | 160 5,838 | 33 103 | 30 1,544 | 7 24 |
* 3Q reporting includes numbers of Sakoken Co., Ltd. third quarter, from Oct. 2020 to Dec. 2020.
* "Building Confirmations for medium to large size buildings (over 500 sqm)" includes the numbers of plan change.
* "Technical Assessments for Long-life Quality Housings" represents the numbers and amounts of conformance certificate, which includes the numbers and amounts of extension and renovation. The numbers of plan change is included.
* Counting rules of "Inspections for Housing Defect Liability Insurance" is as follows. 1) Including Defect Insurance but excluding inspection for insurance firm and Housing Performance Certification, 2) Including insurance brokerage, and 3) Including the data of all housing defect liability insurance companies.
* From FY 5/2020 report, "Evaluation for Compliance with Energy Consumption Performance of Buildings" excludes the numbers of plan change.
Changes of quarterly results | Consolidated
(Millions of yen) | FY 5/2020 (Jun. 2019 - May 2020) | FY 5/2021 (Jun. 2020 - May 2021) | Change | |
Amounts | Ratio | |||
Net Sales Operating Profit Operating Profit Ratio Ordinary Profit Ordinary Profit Ratio Profit Attributable to Owners of Parent Profit per Share (Yen) | 14,842 517 3.5% 598 4.0% 258 33.69 | 14,546 273 1.9% 300 2.1% 157 20.31 | ▲296 ▲244 - ▲297 - ▲101 ▲13.38 | ▲2.0% ▲47.2% - ▲49.7% - ▲39.2% ▲39.7% |
Although the state of emergency declaration issued again, our clients' business operation, especially in severely depressed housing sector, have been resuming evidently.
However, we should pay close attention watch on the COVID-19 disruption whether it will successfully shake down without further infection rebounds.
So far, our business has been going in line with the earlier assumption and we have kept an initial forecast.
Quarterly results and fiscal year end forecast
Digitalization 1 : Fire department's consent
Japan ERI carried out the industry-first online fire department's consent※ in Building Confirmation procedure.
So far, fire authorities have requested a paper design document for their consent procedure. With this case as a start, we expect a spread of online fire department's consent, which is beneficial to work efficiency.
E-filling flow
* If a building is the one prescribed in article 93 of the Building Code, a Designated Confirmation and Inspection Body may not make a Building Confirmation without the consent by the competent fire department. Fire authorities conducted 230 thousand fire department's consent in 2019 (2020 White Paper on Fire Service).
Digitalization 2 : Periodic Refresher Courses for Licensed Architects
ERI Academy started Online Periodic Refresher Courses for Licensed Architects in place of seminars gathered at the venue.
Watching online video education
At any | At any | About one |
hours | Places | hour test |
Easy online signupSelecting a venue, date and time of the course completion test
For one of the COVID-19 countermeasures, MLIT eased the procedure requirements of periodic refresher courses and accepted online course implementation.
Responding quickly, ERI Academy started Online Periodic Refresher Courses from Jan. 2021. It has been well-received by many course participants currently working from home.
From April 2021, an enhancement of Mandatory Energy Saving Standards starts
1. Minimum bldg. volume of the mandatory requirement is expanded from 2,000 sqm to 300 sqm
2. Tightening of supervision for larger than 300 sqm housings and utilization of Housing Performance Evaluation and BELS
3. Regarding smaller than 300 sqm bldgs./housings, architects are required to explain energy efficiency condition to the contractees
*1 source: Number of bldgs. is FY 3/2018 data from MLIT 2021 publication
New requirements (Apr. 2021~) | ||
Non-housing | Housing | |
Large scale floor area ≥ 2,000 sqm | Mandatory compliance 【prerequisite for Building Confirmation】 | Filing required 【tightening of supervision and rationalization of filing with Housing Performance Evaluation/BELS】 |
Medium scale floor area 300 sqm - 2,000 sqm | Mandatory compliance 【prerequisite for Building Confirmation】 | |
Small scale Floor area < 300 sqm | Explain required | Explain required |
Expected volume of filing required units 366,000 units per year*2
Most of mid/large scale housings are collective housings
Penetration rate of Housing Performance Evaluation in Collective houses is 20~25% Penetration rate of BELS in Collective houses is roughly 1%
Expecting expansion of Housing Performance Evaluation/BELS needs
*2 source: Number of units is FY 3/2016 data from MLIT 2018 publication
From FY 3/2026, mandatory energy saving standards will cover all buildings include housings
April 2021, committee will start discussion and conclude a plan around this summer (by Nikkei newspaper, March 5, 2021)
New requirements (FY 3/2026~) | ||
Non-housing | Housing | |
Large scale floor area ≥ 2,000 sqm | Mandatory compliance 【from 2019】 | Mandatory compliance |
Medium scale floor area 300 sqm - 2,000 sqm | Mandatory compliance 【from 2021】 | |
Small scale Floor area < 300 sqm | Mandatory compliance | Mandatory compliance |
Expected volume of filing
required bldgs.
493,000 bldgs. per year*
* source: Number of bldgs. is FY 3/2018 data from MLIT 2021 publication
Certified as a "Health and Productivity Management Organization 2021"
March 4, 2021, Japan ERI was certified as a "Health and Productivity Management Organization 2021 (large corporate category)" in the Health and Productivity Management Organization Certification System, which has established by METI as a way to commend companies that carry out particularly excellent health and productivity management.
Certification by Nippon Kenko Kaigi (Japan Health Council)
December 2019, under the philosophy of "employees and their family health is the core of sustainable business growth", Japan ERI declared "Health Management Manifesto", and developed a health management promotion plan to make employees and their family life vibrant though their daily work. In the plan, we set quantitative targets against major health concerns and have been proactively engaged in promotion of employees' health awareness, prevention of lifestyle-related diseases, constant review of work style, etc.
Contact
ERI Holdings Co., Ltd.
Investor Relations and Public Relations Group E-Mail |info@h-eri.co.jphttps://www.h-eri.co.jp/
This release contains forward-looking statements
about ERI Holdings Co., Ltd.'s future plans,
strategies, beliefs and performance that are not
historical facts. Such statements are based on the
company's assumptions and risks, uncertainties and
assumptions that, without limitation, relate to
economic conditions. Accordingly, ERI Holdings Co.,
Ltd. wishes to caution readers that actual results
may differ materially from those projected in this
release and ERI Holdings Co., Ltd. bear no
responsibility for any negative impact caused by the
use of this release.
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ERI Holdings Co. Ltd. published this content on 30 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 March 2021 06:02:08 UTC.