Sun Frontier Fudousan : Financial Results for the First Quarter of Fiscal Year Ending March 31, 2023

Sun Frontier Fudosan Co., Ltd.

Financial Results for the First Quarter of Fiscal Year Ending March 31, 2023

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1) Overview of the 1Q Results for FY ending March 2023	1-12
2) Business Progress and Initiatives	13-21
		August 10, 2022
3) Management Principle, ESG	22-28
4) Business Model	29-38
5) Medium-term Management Plan	39-42
		Securities Code : 8934
6) Reference Materials	43-50

Overview of the 1Q Results of FY ending

March 2023

Led by Real Estate Revitalization Business. Strong start for the fiscal year under review.

	Results	Profit	Year-on-year	Growth
	margin	rate
Net Sales	22,903	-	-8,309	-26.6%
Operating	6,668	29.1%	-672	-9.2%
Profit
Ordinary	6,690	29.2%	-587	-8.1%
Profit
Profit *	4,690	20.4%	-111	-2.3%

*"Profit" represents profit attributable to owners of parent

Performance Highlights

(unit: million yen)

Full-Year Progression

Forecast Rate

84,000 27.3%

13,300 50.1%

12,800 52.3%

8,300 56.5%

• 1. Strong start from Replanning Business to drive performance in the fiscal year under review
• In Replanning Business, the number of units sold was 10 (8 units year-on- year) as planned. Although both net sales and gross profit saw year-on-year declines due to the sale of three properties owned over the medium - to long-term in the previous year, the full-year earnings forecast has started well as planned.
• Although central Tokyo office rents are on a moderate downward trend, some of them have started to show signs of bottoming out, and the real estate market is booming. As properties with high added value, they can be sold at high profit margin.

• 1. Real Estate Service Business is steady, while Hotel and Tourism Business is recovering
• Real Estate Service Business responded to changing needs through the pandemic of COVID-19 in clients' point of view, and its performance grew in all areas of brokerage, management, rent guarantee, and rental conference room. Double-digit growth in net sales (+15.9% year-on-year) and profit (+ 24.6% year-on-year)
• With the lifting of social action restrictions, people's flow has returned, and the performance of hotel operation in Hotel and Tourism Business has recovered. As a result, losses have decreased compared to the previous year.

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Consolidated Income Statement

			(Unit: million yen)
	FY ended	FY ending	Year-on-	Composition
	Mar 2022	Mar 2023
	year Change	Ratio
	Apr-Jun	Apr-Jun
Net Sales	31,213	22,903	-26.6%	100.0%
Real Estate Revitalization Business	27,450	18,582	-32.3%	80.1%
Replanning Business	26,924	18,062	-32.9%	77.9%
Rental Buildings Business	526	519	-1.3%	2.2%
Real Estate Service Business	2,060	2,387	15.9%	10.3%
Hotel and Tourism Business	1,346	1,917	42.4%	8.3%
Other Business	469	306	-34.8%	1.3%
Adjustments	-114	-290	-	-
Gross Profit (Loss)	9,306	8,519	-8.5%	100.0%
Real Estate Revitalization Business	8,465	7,299	-13.8%	81.9%
Replanning Business	8,329	7,167	-14.0%	80.4%
Rental Buildings and Sub-leases	136	132	-2.9%	1.5%
Real Estate Service Business	1,257	1,565	24.5%	17.6%
Hotel and Tourism Business	-393	-170	-	-
Other Business	30	48	60.0%	0.5%
Adjustments	-53	-224	-	-
Selling, General and Administrative	1,965	1,850	-5.9%
Expenses
Operating Profit (Loss)	7,340	6,668	-9.2%
Non-operating Income	64	167	160.9%
Non-operating Expenses	127	145	14.2%
Ordinary Profit (Loss)	7,277	6,690	-8.1%
Profit	4,802	4,690	-2.3%
Ordinary Profit Margin	23.3%	29.2%

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Income Statement Points

High profit margin contributed significantly to the start of fiscal year under review. Completed sales of 10 units of RP properties as planned (including one in New York).

Responded to changing needs, solved problems in clients' point of view, and made profits in accumulation. Increased people's flow led to a recovery in Conference Room Rental Business demand.

With the lifting of social action restrictions, occupancy rate and unit prices started to rise due to increased people's flow, reducing losses compared to the previous year.

• Selling, general and administrative expenses decreased mainly due to decreases in sales commission, taxes and duties, etc.
• Non-operatingincome, was mainly due to foreign exchange gains.

Consolidated Balance Sheet - Assets -

<> assets>

Increased 5.2 billion yen due to realization of cash mainly from sale of RP properties Sales in RP properties exceeded those in purchase, resulting in a decrease of 6 billion yen

Increased 200 million yen due to construction of hotel properties and capital investment

	FY 2021	FY 2022	FY 2023	Increase/decrease
	As of End of	As of End of	As of End of	(compared to the
(Unit: million yen)	March 2021	March 2022	June 2022	End of March 2022)

	Current assets	110,785	110,920		111,111	+191
	Cash and deposits	21,508	30,053		35,327	+5,274
	Inventories	86,087	77,340		71,243	-6,096
	Breakdown) RP	71,349	63,424		57,333	- 6,091
	Hotel	13,917	13,516		13,425	-91
	Overseas, etc.	822	400		485	+85
	Other current assets	3,189	3,527		4,540	+1,013
	Non-current assets	16,700	25,591		25,574	-16
	Property, Plant and Equipment	10,528	18,796		18,996	+200
	Intangible assets	701	572		581	+9
	Investments and Other assets	5,470	6,222		5,996	-226
	Total assets	127,485	136,512		136,686	+174
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Consolidated Balance Sheet - Liabilities/Equity -

<> debt>

Decreased 2.9 billion yen as repayments from the sale of properties exceeded borrowings from purchase. Interest-bearing debt balance was 48 billion yen.

Increased 3.6 billion yen mainly due to profit (4.6 billion yen) despite dividend payment (-1.1 billion yen).

Changes of Equity Ratio

End of March	End of March	End of June
2021	2022	2022
52.3%	52.2%	54.8%

	FY 2021	FY 2022	FY 2023	Increase/decrease
	(compared to the
	As of End of	As of End of	As of End of
	End of March
(Unit: million yen)	March 2021	March 2022	June 2022
2022)
Current liabilities	13,358	16,210	13,547	-2,662
Short-term borrowings, etc.	5,530	6,904	4,830	-2,074
Income taxes payable, etc.	901	3,528	1,948	-1,579
Other Current liabilities	6,926	5,777	6,768	+991
Non-current liabilities	44,354	45,849	45,020	-828
Long-term borrowings and Bonds payable	41,991	44,169	43,264	-905
Other Non-current liabilities	2,363	1,680	1,756	+76
Total liabilities	57,712	62,060	58,568	-3,491
Shareholders' equity	66,916	71,260	74,679	+3,419
Other	2,856	3,191	3,438	+246
Total Net assets	69,773	74,452	78,117	+3,665
Total Liabilities and Net assets	127,485	136,512	136,686	+174

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