Sun Frontier Fudousan : Financial Results for the Third Quarter of Fiscal Year Ending March 2022

Sun Frontier Fudousan Co., Ltd.

Financial Results for the Third Quarter of Fiscal Year Ending March 2022

We are aiming to be the real estate company of the

world's most loved, trusted and selected by clients.

1) Overview of the 3Q Results of FY 2022	1-9
2) Growth Strategy	10-25	February 10, 2022
3)	Initiatives in the Fiscal Year under Review	26-34
4)	Reference Materials	35-47

Securities Code : 8934

Overview of the 3Q Results of FY ending

March 2022

Profit is ahead of plan. Real Estate Revitalization Business drives performance.

	Results	Profit Margin	Year-on-Year	Growth
	Rate
Net sales	61,618	-	+15,175	32.7%
Operating Profit	12,151	19.7%	+5,119	72.8%
Ordinary Profit	11,983	19.4%	+5,420	82.6%
Profit*	7,519	12.2%	+3,460	85.3%

• "Profit" represents the profit attributable to owner of parent.

	(Unit: million yen)
Full-Year Forecast		Progression
	Rate
76,000		81.1%
12,000		101.3%
11,500		104.2%
7,400		101.6%

Performance Highlights

• 1. Large year-on-year increase in Real Estate Revitalization Business, driving the companywide performance
• The number of units sold in RP Business was 18 (18 units year-on-year).Sales and profit increased significantly compared with the same period of the previous fiscal yearpartly due to the reaction from the previous year, driving the company-wideperformance. Segment profit margin in the Real Estate Revitalization Business remained high (29.6%, +3.6% pt year- on-year).
• The Office Division is making a concerted effort in commercialization. Completed and sold replanning products with high occupancy and high added value. Maintained high quality even in the pandemic of COVID-19 and made steady progress in sales.

• 1. Real Estate Service Business expanded to a level higher than before the pandemic of COVID-19
• Despite the prolonged the pandemic of COVID-19, performance increased mainly in the brokerage business. Both sales (+ 22.9% year- on-year)and profit (+ 20.7% year-on-year)greatly exceeded the previous fiscal year's level and expanded well beyond the level before the pandemic of COVID-19.
• In the field of small and medium-sized office buildings in central Tokyo, each division brought together the expertise it has cultivated through the creativity and ingenuity of each field, and developed the business while cooperating, which functioned as a foundation for creating high profitability in RP Business.

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Sun Frontier Fudousan Co., Ltd.

Consolidated Income Statement

(Unit: million yen)

	FY ending	FY ending	Year-on-year	Composition
	Mar 2021	Mar 2022
	Change	Ratio
	Apr-Dec	Apr-Dec
Net Sales	46,442	61,618	32.7%	100.0%
Real Estate Revitalization Business	29,914	49,677	66.1%	80.1%
Replanning Business	27,974	48,084	71.9%	77.6%
Rental Buildings and Sub-leases	1,940	1,592	-17.9%	2.6%
Real Estate Service Business	4,456	5,477	22.9%	8.8%
Hotel and Tourism Business	8,994	5,637	-37.3%	9.1%
Other Business	3,440	1,197	-65.2%	1.9%
Adjustment	-363	-371	-	-
Gross Profit (Loss)	12,421	17,519	41.0%	100.0%
Real Estate Revitalization Business	8,433	15,358	82.1%	83.0%
Replanning Business	7,689	14,924	94.1%	80.6%
Rental Buildings and Sub-leases	744	434	-41.6%	2.3%
Real Estate Service Business	2,470	2,996	21.3%	16.2%
Hotel and Tourism Business	1,004	-828	-	-
Other Business	678	158	-76.7%	0.9%
Adjustment	-164	-164	-	-
Selling, General and	5,389	5,368	-0.4%
Administrative Expenses
Operating Profit (Loss)	7,032	12,151	72.8%
Non-operating Income	126	253	100.9%
Non-operating Expenses	596	421	-29.2%
Ordinary Profit (Loss)	6,562	11,983	82.6%
Extraordinary Gain (Loss)	-8	-151	-
Income Tax	2,526	4,317	70.9%
Profit Attributable to Non-	-31	-5	-
controlling Interests
Profit	4,059	7,519	85.3%

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Income Statement Points

In the RP Business, sales progressed as commercialization made progress steadily even during the pandemic of COVID-

19. As a result for the Real Estate Revitalization Business, sales was 49.6 billion yen (up 66% year-on-year),gross profit was 15.3 billion yen (up 82% year-on-year),and gross profit margin was 31%, exceeding full-year forecast margin (27%).

In addition to generating stable income in each business segment, profits grew due to the increasing opportunities to solve problems in the pandemic of COVID-19. As a result, the Real Estate Service Business as a whole posted sales of 5.4

billion yen (up 23% year-on-year) and gross profit of 2.9 billion yen (up 21% year-on-year).

The Hotel Operation Business was sluggish due to the pandemic of COVID-19 and start-up expenses. The Hotel Development Business saw a significant decline in reaction to the sales and profits from the Okinawa Condominium Hotel recorded in the previous fiscal year. The Hotel and Tourism Business as a whole posted sales of 5.6 billion yen and a loss of 820 million yen.

Sun Frontier Fudousan Co., Ltd.

Consolidated Balance Sheet - Assets -

Increased 11 billion yen due to progress in the sale of RP projects.

		Decreased 14.9 billion yen due to the sale of properties and so on, of which RP projects decreased
		14.7 billion yen due to progress in sales. Hotel projects decreased slightly due to progress in sales of
		Okinawa Hotel and so on while construction of new hotels progressed.
			FY ending March		FY 2022	Increase/Decrease
			FY 2021	As of End of	(compared to the End of
			2020
	(Unit: million yen)		December 2021	March 2021)
	Current assets		113,842	110,785	107,238	-3,546
	Cash and deposits		18,627	21,508	32,536	+11,028
	Inventories		91,766	86,087	71,148	-14,938
	Breakdown) RP		71,353	71,349	56,615	-14,734
	Hotel		17,019	13,917	13,913	-4
	Overseas, etc.	3,395	821	620	-201
	Other current assets	3,448	3,189	3,553	+363
	Non-current assets	16,450	16,700	24,039	+7,339
	Property, Plant and Equipment	10,413	10,528	17,318	+6,790
	Intangible Assets		712	701	645	-55
	Investments and Other Assets	5,324	5,470	6,075	+605
	Total assets		130,293	127,485	131,278	+3,792
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Consolidated Balance Sheet - Liabilities /Equity -

<> Debt >

Borrowings decreased 2 billion yen from the end of the previous fiscal year to 45.4 billion yen due to property sales and so on.

Increased 4.7 billion yen due to Profit (7.5 billion yen) and other factors despite the payment of year-end dividends payable (-2.0 billion yen) and interim dividends payable (-1.0 billion yen).

Changes of Equity Ratio

FY ending of	FY ending of	FY 2022 ending of
March 2020	March 2021	December 2021
49.6%	52.3%	54.3%

	FY ending March		FY 2022	Increase/Decrease
	FY 2021
	As of End of	(compared to End of
(Unit: million yen)	2020
	December 2021	March 2021)
Current liabilities	18,052	13,358	15,144	+1,786
Short-term Borrowings, etc.	4,463	5,530	5,420	▲110
Income Taxes Payable, etc.	3,566	901	2,988	+2,087
Other Current liabilities	10,022	6,926	6,735	▲191
Non-current liabilities	47,431	44,354	41,632	▲2,721
Long-term Borrowings and Bonds Payable	44,906	41,991	40,021	▲1,969
Other Non-current Liabilities	2,525	2,363	1,611	▲752
Total Liabilities	65,483	57,712	56,777	▲935
Shareholders' Equity	64,690	66,916	71,364	+4,447
Others	119	2,856	3,136	+279
Total Net Assets	64,809	69,773	74,500	+4,727
Total Liabilities and Net Assets	130,293	127,485	131,278	+3,792

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Sun Frontier Fudousan Co., Ltd.