Sansei Landic : 【Delayed】Summary of Business Results for the Year Ended December 31, 2021

Summary of Business Results for the Year Ended December 31, 2021

[Japan GAAP] (Consolidated)

		February 14, 2022
Company	Sansei Landic Co.,Ltd	Listed on the TSE
Stock Code	3277	URL: https://www.sansei-l.co.jp
Representative	Takashi Matsuzaki, President and Representative Director
Contact	Takeshi Nagata, Director, Chief Director of Administration Dept.	T E L: [phone]

Expected date of annual shareholders' meeting: March 29, 2022	Expected starting date of dividend payment: March 30, 2022
Expected date of filing of annual securities report: March 29, 2022
Preparation of supplementary financial document: Yes
Results briefing: Yes (for institutional investors and analysts)
						（Rounded down to million yen）
１. Consolidated business results for the fiscal year ended December 2021
(January 1, 2021 through December 31, 2021)
(1) Consolidated results of operations			(% change from the previous corresponding period)
	Net sales		Operating income	Ordinary income	Net income attributable to
		owners of parent
	Million yen	%	Million yen	%	Million yen	%	Million yen	%
Year ended Dec. 2021	16,836	-5.3	1,117	31.9	999	40.9	609	70.5
Year ended Dec. 2020	17,774	-1.4	847	-54.5	709	-59.7	357	-69.1

(Note) Comprehensive income:

Year ended December 2021: 609 million yen (70.5%)

Year ended December 2020: 357 million yen (-69.1%)

	Net income	Diluted net income	Return on	Ratio of ordinary	Ratio of operating
	income to total
	per share	per share	equity	income to net sales
	assets
	Yen	Yen	%	%	%
Year ended Dec. 2021	73.56	73.22	6.0	5.0	6.6
Year ended Dec. 2020	42.34	42.25	3.6	3.6	4.8
(Reference) Investment earnings/loss on equity-method:
Year ended December 2021: -million yen
Year ended December 2020: -million yen

(2) Consolidated financial position

		Total assets		Net assets	Shareholders' equity	Net assets per
			ratio	share
		Million yen		Million yen	%	Yen
As of Dec. 2021		20,050		10,301	51.4	1,248.99
As of Dec. 2020		20,070		10,066	50.1	1,192.45
(Reference) Shareholders' equity:
As of December 2021: 10,298 million yen
As of December 2020: 10,062 million yen

(3) Consolidated results of cash flows

	Cash flows from	Cash flows from	Cash flows from	Cash and cash equivalents
	operating activities	investing activities	financing activities	at the end of period
	Million yen	Million yen	Million yen	Million yen
Year ended Dec. 2021	1,704	-51	-608	4,752
Year ended Dec. 2020	-916	-287	952	3,707

2. Dividends

		Annual dividend				Total	Dividend		Rate of total
								dividend	payout ratio		dividend to
	End of	End of	End of		Year-end	Total
			(Total)	(Consolidated)		net assets
	1Q	2Q	3Q
								(Consolidated)
	Yen	Yen	Yen		Yen	Yen		Million yen	%	%
Year ended Dec. 2020	-	0.00	-		25.00	25.00	210	59.0	2.1
Year ended Dec. 2021	-	0.00	-		26.00	26.00	214	35.3	2.1
Year ending Dec. 2022	-	0.00	-		27.00	27.00			29.5
(forecast)

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3．Forecast of consolidated business results for the year ending December 2022 (January 1, 2022 through December 31, 2022)

(% change from the previous corresponding period)

	Net sales		Operating income	Ordinary income	Net income attributable	Net income
		to owners of parent	per share
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Yen
For the six months	7,052	-22.6	395	-42.7	317	-49.7	201	-49.9	24.49
ending June 30, 2022
Year ending Dec. 2022	18,235	8.3	1,301	16.4	1,142	14.3	754	23.8	91.52

*Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries accompanying changes in the scope of consolidation): None
2. Changes in accounting policies, accounting estimates and restatement

① Changes in accounting policies associated with revision of accounting standards:	: None
②Changes in accounting policies other than ①	: None
③Changes in accounting estimates	: None
: None
④Restatement

1. Shares outstanding (common stock)

• Number of shares outstanding at the end of period (treasury stock included)

As of December 2021	8,474,800 shares
As of December 2020	8,468,300 shares

• Treasury stock at the end of period:

As of December 2021	229,942 shares
As of December 2020	29,942 shares

• Average number of stock during period (cumulative period)

Year ended December 2021	8,284,882 shares
Year ended December 2020	8,443,753 shares

(Reference) Summary of non-consolidated business results

1. Non-consolidated business results for the fiscal year ended December 2021 (January 1, 2021 through December 31, 2021)

(1) Non-consolidated results of operations			(% change from the previous corresponding period)
	Net sales			Operating income		Ordinary income	Net income
	Million yen	%		Million yen	%			Million yen	%	Million yen	%
Year ended Dec. 2021	15,529	-3.6	1,263	49.4		993	48.0	603	240.3
Year ended Dec. 2020	16,111	-1.0	845	-55.5		671	-61.7	177	-84.9
	Net income			Diluted net income per
	per share			share
		Yen			Yen
Year ended Dec. 2021		72.85			72.51
Year ended Dec. 2020		21.00			20.96
(2) Non-consolidated financial position
	Total assets		Net assets				Shareholders' equity	Net assets per
					ratio		share
	Million yen		Million yen				%		Yen
As of Dec. 2021		19,674			10,313				52.4		1,250.37
As of Dec. 2020		19,838			10,083				50.8		1,194.51

(Reference) Shareholders' equity:

As of December 2021: 10,309 million yen

As of December 2020: 10,079 million yen

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2．Forecast of non-consolidated business results for the fiscal year ending December 2022 (January 1, 2022 through December 31, 2022)

							(% change from the previous
								corresponding period)
	Net sales		Ordinary income	Net income		Net income per
			share
	Million yen	%	Million yen	%	Million yen	%		Yen
For the six months ending	6,546	-23.9	358	-33.8	243		-22.5	29.47
June 30, 2022
Year ending Dec. 2022	16,865	8.6	1,140	14.8	752		24.6	91.23

*Financial summary is not subject to the review procedures by certified public accountants or auditing firms.

*Explanation regarding appropriate use of business forecasts and other special instructions

The forecasts regarding future performance in this report are based on information available at the time this report was prepared. However, actual results may differ from the forecasts due to various factors.

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1. Summary of Results of Operations

1. Summary of results of operations for the fiscal year under review
2. • Results of operations for the fiscal year under review

In the fiscal year under review, net sales were 16,836 million yen (down by 5.3% YoY), operating income was 1,117 million yen (up by 31.9% YoY), ordinary income was 999 million yen (up by 40.9% YoY), and a net income attributable to owners of parent was 609 million yen (up by 70.5% YoY).

Results by business segment are as follows.

• Real Estate Sales business

In the Real Estate Sales Business, the segment recorded net sales of 15,529 million yen (down by 3.6% YoY) and segment income of 2,333 million yen (up by 20.6% YoY).

Sales and purchase results for the fiscal year under review are as follows.

ⅰ Sales Results

Classification	Number of	YoY (%)	Sales (million yen)	YoY (%)
contracts
Leasehold land	344	-0.3	8,208	＋29.8
Old unutilized properties	57	-24.0	6,083	-13.7
Freehold	8	-38.5	864	-61.9
Other Real Estate Sales	-	-	373	-19.5
Business
Total	409	-5.5	15,529	-3.6

(Note) 1. The amounts shown above do not include consumption taxes.

1. Inter-segmenttransactions have been eliminated.
2. "Number of contracts" indicates the number of transactions.
3. "Classification" of Leasehold land, Old unutilized properties, and Freehold is stated according to the classification at the time of purchase. When leasehold land has changed to freehold with rights adjustment after purchase, this case is included in "Leasehold land" based on the classification at the time of purchase. As for the classification of mixed properties with leasehold land, old unutilized properties, and freehold, properties including leasehold land are classified as "Leasehold land", and properties containing a mix of old unutilized properties and freehold are classified as "Old unutilized properties."
4. "Other Real Estate Sales Business" consists of rent income, income from brokerage fees, and commission income from outsourcing.

Although sales of leasehold land increased, sales decreased year-on-year due to a decrease in sales of old unutilized properties and freehold.

ⅱ Purchase Results

Classification	Number of lots	YoY (%)	Purchase amount	YoY (%)
(Million yen)
Leasehold land	367	+4.0	4,474	-10.3
Old unutilized properties	74	+32.1	4,689	-28.9
Freehold	20	+81.8	955	-44.1
Total	461	+9.8	10,118	-23.9

(Note) 1. The amounts shown above do not include consumption taxes.

1. "Number of lots" indicates the number of sales lots expected at the time of purchase of the property, such as the number of leaseholders in the case of leasehold land.
2. As for the classification of mixed properties with leasehold land, old unutilized properties, and freehold, properties including leasehold land are classified as "Leasehold land", and properties containing a mix of old unutilized properties and freehold are classified as "Old unutilized properties."

In purchasing, although the number of purchases increased year-on-year in all categories, the purchase amount decreased year-on-year in all categories mainly due to the higher purchase amount in the same period of the previous fiscal year reflecting the purchase of large-scale properties.

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• Construction business

In the Construction Business, the segment recorded net sales of 1,306 million yen (down 21.4% YoY) and segment loss of 145 million yen (segment loss of 4 million yen in the same period of the previous fiscal year).

Sales and orders in the fiscal year under review are as follows.

• Sales Results

Number of contracts	YoY (%)	Sales (million yen)	YoY (%)
135	-17.2	1,306	-21.4

(Note) 1. The amounts shown above do not include consumption taxes.

1. Inter-segmenttransactions have been eliminated.
2. "Number of contracts" indicates the number of contracts received.
3. "Number of contracts" and "Sales" include the number and amount of renovation works and reconstruction works.

Sales decreased year-on-year mainly due to the delays in business negotiations and construction starts caused by the spread of COVID-19 and the impact of the lumber shortage. In addition, profits fell significantly short of the plan due to the recording of a provision for loss on construction contracts as the cost of reinforced concrete (RC) property under construction is expected to be significantly higher than originally estimated.

ⅱ Order Results

Orders received	YoY (%)	Order backlog	YoY (%)
(million yen)	(million yen)
1,379	+26.0	529	+16.0

(Note) 1. The amounts shown above do not include consumption taxes.

1. Inter-segmenttransactions have been eliminated.
2. The above amounts are based on selling prices.

As for orders, both orders received and order backlog increased year-on-year.

• Outlook for the next fiscal year

In the Real Estate Sale business, we plan net sales of 16,865 million yen (up by 8.6% year-on-year) and expect each profit to increase. Expenses decreased significantly in the fiscal year under review due to COVID-19. However, we expect expenses to increase in the next fiscal year due to an increase in expenses associated with the expansion of purchasing, the expansion of promotion activities utilizing data, an increase in personnel expenses associated with an increase in personnel for future growth and an increase in system-related spending due to the conversion to cloud and the promotion of remote working.

In the Construction business, we have been working to develop a cost control structure in construction and to reduce expenses. Nevertheless, we recorded a drastic deficit for some properties. Therefore, we recorded a significant loss in the fiscal year under review. We plan to return to profitability in the next fiscal year by continuing to implement measures to strengthen sales and thoroughly control costs in construction.

As a result of the above, we forecast net sales of 18,235 million yen (up by 8.3% YoY), operating income of 1,301 million yen (up by 16.4% YoY), ordinary income of 1,142 million yen (up by 14.3% year on year), and net income attributable to owners of the parent of 754 million yen (up by 23.8% YoY).

It will be necessary to pay attention to the impact of COVID-19, whose end is still not possible to see, on the economic environment and trends in the financial and economic conditions in regards to our future outlook. Nevertheless, it is expected that real estate demand in Japan will remain strong for the time being.

Against this business environment, we formulated a medium-term management plan for FY12/22 to FY12/24. We achieved a growth rate of over 10% on average until 2019. However, we have entered a period of stagnation during the COVID-19 pandemic. Accordingly, we will set targets for 2024 conservatively with 2022 to 2024 serving as periods in which we will aim to strengthen our business foundation qualitatively, where we will focus on efforts to grow from 2025 onward. We will strengthen our financial base to be listed on the Prime Market from 2025 onward. At the same time, we will accelerate new initiatives using upfront investment. In this way, we are positioning this period as a turning point for new growth.

We will work to expand existing businesses, enlarge our business areas and strengthen our management base over the next three years. The aim of this will be to the build solid business foundations so that we can realize stable business growth even after the end of the COVID-19 pandemic. We are aiming for consolidated operating income of 1.8 billion yen, consolidated ordinary income of 1.65 billion yen and an ROE of 9.0% as the management indicators for the final year of our plan.

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