FJ Next : (Delayed)Summary of Financial Results for the First Quarter 2022

August 2, 2021

Summary of Financial Results for the First Quarter of Fiscal Year Ending March 31, 2022

[Japanese Standards] (Consolidated)

Company name:	FJ Next Co., Ltd.	Stock listing: Tokyo Stock Exchange
Securities code:	8935	URL: https://www.fjnext.com
Representative:	Atsushi Nagai, President and CEO
Inquiries:	Tatsumi Yamamoto, Executive officer / Headquarters, Administration Division
Date of filing of quarterly report:	August 4, 2021	Date of commencement
of dividend payment

The supplementary explanation document for the	No
first-quarter of accounts is created.
The briefing for the first-quarter of accounts is	No
held.

TEL: [phone]

－

(Millions of yen rounded down)

1. Consolidated Operating Results for the First Quarter of Fiscal Year Ending March 31, 2022 (From April 1, 2021 to June 30, 2021)

(1) Consolidated Operating Results (Cumulative)

(% figures represent year-on-year increase or decrease)

Net Income Attributable

Net Sales

Operating Income

Ordinary Income

to Shareholders of

Parental Company

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

1Q/ FY ending March 31, 2022

18,303

49.3

1,633

91.8

1,633

97.5

1,108

115.4

1Q/ FY ended March 31, 2021

12,256

(44.9)

851

(68.3)

827

(69.4)

514

(71.7)

(Note)

Comprehensive income:

1Q/ FY ending March 31, 2022:

¥1,117 million (117.9%)

1Q/ FY ended March 31, 2021:

¥512 million (-72.0%)

Net Income Per

Net Income Per

Share

Share After Dilution

Yen

Yen

1Q/ FY ending March 31, 2022

33.91

－

1Q/ FY ended March 31, 2021

15.74

－

(2) Consolidated Financial Position

Total Assets

Net Assets

Equity Ratio

Net Assets Per Share

Millions of yen

Millions of yen

%

Yen

As of June 30, 2021

84,638

54,484

64.4

1,666.93

As of March 31, 2021

84,375

53,869

63.8

1,648.14

(Reference)

Shareholders' equity:

As of June 30, 2021: ¥54,484 million

As of March 31, 2021: ¥53,869 million

2. Dividends

Dividends Per Share

End of 1Q

End of 2Q

End of 3Q

End of 4Q

Annual

Yen

Yen

Yen

Yen

Yen

FY ended March 31, 2021

－

22.00

－

22.00

44.00

FY ending March 31, 2022

－

FY ending March 31, 2022 (Forecast)

24.00

－

24.00

48.00

(Note) Revision to the latest forecast of

dividends: No

3. Forecasts of Consolidated Operating Results for the Fiscal Year Ending March 31, 2022 (From April 1, 2021 to March 31, 2022)

					(% figures represent year-on-year increase or decrease)
							Net Income Attributable	Net Income
	Net Sales		Operating Income	Ordinary Income	to Shareholders of
		Per Share
							Parental Company
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	81,000	11.0	8,000	8.8	8,000	9.1	5,500	10.4	168.27

(Note) Revision of forecasts on the consolidated operating results: No

*Notes

1. Changes in major subsidiaries during this three-month period ended June 30, 2021 (changes in specific subsidiaries affecting the scope of consolidation): No

New: － (Company name: － ), Excluded:

－ (Company name: － )

1. Application of accounting methods specific to the preparation of quarterly consolidated financial statements: No
2. Changes in accounting principles, changes in accounting estimates and restatements
3. 1. Changes due to revisions to accounting standards, etc.: Yes
   2. Changes other than 1): No
   3. Changes in accounting estimates: No
   4. Restatements: No
4. Number of outstanding shares (common stock)

1. Number of shares outstanding at term- end (including treasury stock)
2. Amount of treasury stock at term-end
3. Amount of average stock during term (Quarter accumulation)

Three months ended	34,646,500 shares	FY ended March 31,	34,646,500 shares
June 30, 2021	2021
Three months ended	1,961,157 shares	FY ended March 31,	1,961,157 shares
June 30, 2021	2021
Three months ended	32,685,343 shares	Three months ended	32,685,343 shares
June 30, 2021	June 30, 2020

• This quarterly summary of consolidated financial results is excluded from the quarterly review by a certified public accountant or audit corporations.
• Explanation and other special notes regarding the appropriate use of the earnings forecast

(Notes on forward-looking statements)

The forward-looking statements such as result forecasts included in this document are based on the information available to the Company at the time of the announcement and on certain assumptions considered reasonable, and the Company makes no representations as to their achievability. Actual results may differ materially from the forecast depending on a range of factors.

Table of Contents of the appendix

1. Qualitative Information Regarding the Consolidated Financial Results in the First Quarter ....................................	- 2 -
(1)	Explanation of Operating Results..........................................................................................................................	- 2 -
(2)	Explanation of Financial Position .........................................................................................................................	- 3 -
(3)	Explanation of Future Forecasts Such as the Forecast of Consolidated Operating Results ..................................	- 3 -
2. Consolidated Financial Statements and Important Notes ..........................................................................................	- 4 -
(1)	Consolidated Balance Sheets in the First Quarter .................................................................................................	- 4 -
(2)	Quarterly Consolidated Statements of Income and Comprehensive Income ........................................................	- 6 -
Quarterly Consolidated Statement of Income ..........................................................................................................	- 6 -
	(For the Three-Month Consolidation Period)........................................................................................................	- 6 -
Quarterly Consolidated Statement of Comprehensive Income ................................................................................	- 7 -
	(For the Three-Month Consolidation Period)........................................................................................................	- 7 -
(3) Notes Regarding Quarterly Consolidated Financial Statements ..............................................................................	- 8 -
(Notes Regarding Going Concern)...........................................................................................................................	- 8 -
(Changes to the Scope of Consolidation and Application of the Equity Method) ...................................................	- 8 -
(Changes in Accounting Policies) ............................................................................................................................	- 8 -
(Notes in Event of Significant Changes in Shareholders' Equity) ...........................................................................	- 8 -
(Segment Information) .............................................................................................................................................	- 9 -

1. Qualitative Information Regarding the Consolidated Financial Results in the First Quarter

(1) Explanation of Operating Results

During this three-month consolidation period (1Q for the fiscal year ending March 31, 2022), extremely tough conditions continued in the Japanese economy due to the spread of COVID-19. Although trends towards recovery can be seen in some areas due to the effect of various measures by the Japanese government and the recovery of overseas economies, it is necessary to continue to focus on the impact of factors such as the spread of COVID-19 in Japan and overseas, as well as fluctuations in the financial capital market.

Regarding the condominium marketplace in the Tokyo metropolitan area, the number of new condominiums offered in the Tokyo metropolitan area in the first half of 2021 (from January to June) increased by 77.3% from the same period last year to 13,277 units. This is the first time in three years (since 2018) that the number of new condominiums offered in the first half increased. Also, the average ratio of the first month contracts consummated during the same period was 72.5%; that is, above 70%, which is said to be a rough indication of good sales performance. This indicates that the market is headed towards improvement from the adjustment phase (according to a survey by Real Estate Economic Institute Co., LTD.).

In the market for investment-type condominiums which compose our corporate group's main business area, lease demand remained strong in the Tokyo metropolitan area centering on singles. Purchase demand for investment-type condominiums is solid, supported by low interest rates and by increasing recognition as income-earning properties that can be expected to provide steady earnings. However, we must remain vigilant in terms of watching the long-term effects of COVID-19.

Under this business environment, our corporate group has been striving to enhance the customer support system, strengthen our brand name and expand the development and sales of the "Gala Condominium series" which provide various advantages for asset management mainly in the Tokyo metropolitan area, and "Gala Residence series" which are condominiums designed for families under our own brand. Furthermore, we are fully committed to improving the value of the corporate group. Additionally, in spite of the continuing impacts of the COVID-19 pandemic, we have worked to promote our business while implementing various measures to prevent the spread of infectious diseases such as utilization of IT for handling of important explanatory meetings, web seminars, and other sales functions without meeting in person.

As a result, net sales were ¥18,303 million (an increase of 49.3% compared with the same period last year), operating income amounted ¥1,633 million (an increase of 91.8% compared with the same period last year), and ordinary income was ¥1,633 million (an increase of 97.5% compared with the same period last year). Furthermore, net income attributable to shareholders of parental company totaled ¥1,108 million (an increase of 115.4% compared with the same period last year).

The operating results for each business segment are as follows:

(Real estate development segment)

During the consolidated cumulative first quarter under review, we focused on the sales of new properties such as Gala Parkside Kiba, Gala Shin-Yokohama Grand Stage, and Gala Residence Yokohama Kami-Ooka, and also actively conducted sales of pre- owned condominiums.

As a result, net sales were ¥8,809 million for newly built condominiums (336 units), ¥5,086 million for pre-owned condominiums (208 units), and ¥1,888 million from other income sources. Therefore, the total net sales in the segment reached ¥15,784 million (an increase of 58.6% compared with the same period last year) and the segment profit was ¥1,259 million (an increase of 114.7% compared with the same period last year).

Breakdown of net sales, etc.

	Three-month consolidation period	Three-month consolidation period
	ended June 30, 2020		ended June 30, 2021
Classification	(Apr. 1, 2020 - June 30, 2020)	(Apr. 1, 2021 - June 30, 2021)
No. of	Amount		No. of	Amount
	(millions of		YOY	(millions of		YOY
	Units		Units
	yen)		(%)	yen)		(%)
Gala Condominium series	153	4,012		78.2%	324	8,219		204.9%
Gala Residence series	0	－		－	12	589		－
Pre-owned condominiums	174	4,181		36.6%	208	5,086		121.6%
Other income	－	1,761		107.1%	－	1,888		107.3%
Total	327	9,955		48.9%	544	15,784		158.6%

(Real estate management segment)

During the consolidated cumulative first quarter under review, as the result of new managed properties that were developed by the corporate group, the number of managed properties increased with the number of managed units for leasing reaching 17,111 and the number of buildings managed reaching 316.

As a result, net sales in the real estate management segment were ¥833 million (an increase of 11.8% compared with the same period last year), and segment profit was ¥222 million (an increase of 6.0% compared with the same period last year).

(Construction segment)

During the consolidated cumulative first quarter under review, orders centered on condominium construction were steady. Construction work progressed as planned.

As a result, net sales in the construction segment were ¥1,470 million (a decrease of 0.0% compared with the same period last year), and segment profit was ¥183 million (an increase of 25.2% compared with the same period last year).

(Japanese inn segment)

During the consolidated cumulative first quarter under review, although there was an increase in the number of overall visitors to Japanese inn facilities compared to the same period of last year, when all of these facilities temporarily closed due to the impact of the COVID-19 pandemic, the Japanese government re-declaring a state of emergency caused conditions to turn severe.

As a result, net sales in the Japanese inn segment increased to ¥214 million (an increase of 156.0% compared with the same period last year), and the segment posted a loss of ¥45 million (compared to a segment loss of ¥105 million in the same period last year).

Note that among the real estate development business, for sales of condominiums, only the proceeds from condominiums that have been actually handed over to the customer are posted. Therefore, there may be unbalances in quarterly business results depending on the dates of completion of the housing or dates of delivery.

(2) Explanation of Financial Position

(Assets)

At the end of the consolidated first quarter under review, current assets were ¥72,293 million, a decrease of ¥384 million as compared with the end of the previous consolidated fiscal year. This is mainly because real estate for sale decreased by ¥6,686 million, while cash and deposits increased by ¥3,966 million and real estate for sale in process by ¥2,092 million. Non-current assets recorded ¥12,345 million, an increase of ¥646 million as compared with the end of the previous consolidated fiscal year. This is mainly due to the shifting of real estate for sale to property, plant and equipment, which was carried out for a portion of this real estate for sale due to changes in their purpose of ownership.

As a result, total assets were ¥84,638 million, an increase of ¥262 million as compared with the end of the previous consolidated fiscal year.

(Liabilities)

At the end of the consolidated first quarter under review, current liabilities were ¥13,559 million, a decrease of ¥3 million as compared with the end of the previous consolidated fiscal year. Non-current liabilities recorded ¥16,594 million, a decrease of ¥348 million as compared with the end of the previous consolidated fiscal year. This is mainly because long-term loans payable decreased by ¥359 million.

As a result, total liabilities were ¥30,153 million, a decrease of ¥351 million as compared with the end of the previous consolidated fiscal year.

(Net assets)

At the end of the consolidated first quarter under review, total net assets were ¥54,484 million, an increase of ¥614 million as compared with the end of the previous consolidated fiscal year. A major increase was ¥1,108 million in net income attributable to shareholders of parental company, while a major decrease was ¥719 million in dividends of surplus.

As a result, the equity ratio was 64.4% (it was 63.8% at the end of the previous consolidated fiscal year).

(3) Explanation of Future Forecasts Such as the Forecast of Consolidated Operating Results

Regarding the forecast for the fiscal year ending March 31, 2022, there has been no change to the forecasted numbers listed in the "Summary of Financial Results for the Fiscal Year Ended March 31, 2021" that was released on May 10, 2021.