Pressance : Consolidated Financial Results for the First Three Months of the Fiscal Year Ending September 30, 2022

This document has been translated from a part of the Japanese original for the convenience of non-Japanese shareholders. In the event of any discrepancy between this translation and the Japanese original, the original shall prevail.

February 14, 2022

Consolidated Financial Results

for the First Three Months of the Fiscal Year Ending September 30, 2022

J-GAAP>

Company name:	Pressance Corporation Co., Ltd.
Listing:	First Section of the Tokyo Stock Exchange
Section code:	3254
URL:	https://www.pressance.co.jp/
Representative:	Yutaka Doi, President and Representative Director
Contact:	Kyosuke Ichikawa, Executive Officer, Deputy General Manager of Management Division,
	and General Manager of Accounting Department
	TEL: [phone]

Scheduled date of filing of quarterly securities report:	February 14, 2022
Scheduled date of start of dividend payment:	-
Preparation of supplementary quarterly materials for financial results:	Yes
Holding of quarterly financial results presentation meeting:	No

(Amounts less than one million yen have been omitted.)

1. Consolidated operating results for the first three months of the fiscal year ending September 30, 2022 (from October 1, 2021 to December 31, 2021)

(1) Consolidated operating results					(Percentages indicate year on year changes
		compared to the same period of the previous FY )
	Net sales		Operating profit		Ordinary profit	Profit attributable to
			owners of parent
	Millions of yen	%	Millions of yen	%		Millions of yen	%	Millions of yen	%
First three months of the fiscal
year ending September 30,	37,007	-	6,293	-	6,563	-	3,976	-
2022
First three months of the fiscal
period ended September 30,	53,973	(18.1)	8,642	(27.4)	8,473	(29.2)	5,328	(34.9)
2021
Note: Comprehensive income	First three months of the fiscal year ending September 30, 2022: 4,951 million yen [(-)%]
	First three months of the fiscal period ended September 30, 2021: 5,345 million yen [(35.1)%]
	Basic earnings per	Diluted earnings per
	share		share
		Yen		Yen
First three months of the fiscal
year ending September 30,		58.42		58.22
2022
First three months of the fiscal
period ended September 30,		78.38		78.37
2021

Note: Effective the fiscal period ended September 30, 2021, we have changed the fiscal year-end from March 31 to September 30. Year-on-year changes are not provided as the period that the first three months of this fiscal year covers (October 1, 2021 to December 31, 2021) is different from the first three months of the fiscal period ended September 30, 2021 (April 1, 2021 to June 30, 2021).

(2) Consolidated financial position

	Total assets	Net assets	Equity ratio
	Millions of yen	Millions of yen	%
As of December 31, 2021		248,250	151,053	60.6
As of September 30, 2021		256,024	148,256	57.6
Reference: Equity
As of December 31, 2021	150,504 million yen
As of September 30, 2021	147,400 million yen

2. Dividends

		Annual dividends per share
	1st quarter-end	2nd quarter-end	3rd quarter-end		Year-end	Annual total
	Yen	Yen	Yen		Yen	Yen
Fiscal period ended	―	―	―		16.00	16.00
September 30, 2021
Fiscal year ending September	―
30, 2022
Fiscal year ending September		16.00	―		16.00	32.00
30, 2022 (Forecast)
Note: Revisions to the dividends forecasts most recently announced: None

Note that the fiscal period ended September 30, 2021 covers six months from April 1, 2021 to September 30, 2021 due to the change to the fiscal year-end.

3. Forecasts of consolidated operating results for the fiscal year ending September 30, 2022 (from October 1, 2021 to September 30, 2022)

(Percentages indicate year-on-year changes.)

Profit attributable to

Basic

Net sales

Operating profit

Ordinary profit

earnings

owners of parent

per share

Millions of yen

%

Millions of yen

%

Millions of yen

%

Millions of yen

%

Yen

Half year

66,427

―

8,796

―

8,377

―

4,988

―

73.38

Full year

140,834

―

16,063

―

15,205

―

9,829

―

144.56

Note: Revisions to the results forecasts most recently announced: None

The fiscal period ended September 30, 2021 covers six months from April 1, 2021 to September 30, 2021 due to the change to the fiscal year-end. For this reason, year-on-year changes are not provided.

• Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Adoption of specific accounting policies for quarterly consolidated financial statements: Yes (Corporate Income Tax Calculation Standards)
   Regarding taxes, a reasonable estimate of the effective tax rate for the projected full-period pretax income for the current fiscal period, including the actual income figure for the first three months of the fiscal year, has been arrived at using the tax-effect accounting method.
3. Changes in accounting policies, changes in accounting estimates and restatement after error corrections
4. 1. Changes in accounting policies due to amendments to accounting standards and other regulations: None
   2. Changes in accounting policies due to other reasons than a. above: None
   3. Changes in accounting estimates: None
   4. Restatement after error corrections: None
5. Number of issued shares (common stock)
6. 1. Number of issued shares at the end of each period (including treasury shares)

	As of December 31, 2021	68,974,716 shares
	As of September 30, 2021	68,858,316 shares
b. Number of treasury shares at the end of period
	As of December 31, 2021	866,546 shares
	As of September 30, 2021	867,061 shares
c. Average number of shares during the period
	First three months of the fiscal year ending September 30, 2022	68,067,590 shares
	First three months of the fiscal period ended September 30, 2021	67,978,527 shares

Note:

Due to the introduction of the share-based payment type ESOP, a certain number of shares of the Company held in the trust account is included in the "Number of treasury shares at the end of period" (309,320 shares as

of December 31, 2021 and 309,860 shares as of September 30, 2021). And, a certain number of shares held in the trust account is included in the treasury shares that were deducted in the calculation of the "Average number of shares during the period" (309,426 shares for the first three months of the fiscal year ending September 30, 2022 and 309,860 shares for the first three months of the fiscal period ended September 30, 2021).

• Review of quarterly financial result reports by public accountants or auditing firms is not required.
• Explanations about the proper use of financial forecasts and other important notes

(Caution Concerning Forward-looking Statements)

Forward-looking statements in this document, including the results forecasts, are based on the information available to the Company at the time of disclosure and on certain assumptions deemed to be practicable by the Company. These statements do not purport that the Company pledges or ensures to achieve such statements. Actual business and other results may differ substantially due to various factors. For preconditions to the assumptions and other important notes concerning the financial forecasts, please refer to "1. Quarterly Qualitative Information (3) Explanation for the Forecast of Consolidated Financial Results ending September 30, 2021" on page 2 of the attachment.

(Method of Obtaining Supplementary Materials for Quarterly Financial Results)

Supplementary materials for quarterly financial results are available on the Company's website on the release date of this document. (Japanese version only)

1. Quarterly Qualitative Information

(1) Business Results

Effective the fiscal period ended September 30, 2021, we have changed the fiscal year-end from March 31 to September 30. Year-on-year changes in amount and percentage are not provided as the period that the first three months of this fiscal year covers (October 1, 2021 to December 31, 2021) is different from the first three months of the fiscal period ended September 30, 2021 (April 1, 2021 to June 30, 2021).

During the first three months of the fiscal year ending September 30, 2022, the Japanese economy and the business environment remained challenging due to the impact of the COVID-19 pandemic. We must pay close attention to downside risks from the impact of infection, supply-side constraints, and the trend of raw material prices. Fluctuations in the financial and capital markets should also be watched carefully.

In the real estate industry to which the Group belongs, in addition to the impact of the COVID-19 pandemic, an increase in land costs in cities and construction costs and the like are causes for concern. Concurrently, the interest rates on housing loans remain low while the Japanese government's ongoing measures to help homebuyers, such as a mortgage tax breaks, are still on track, contributing to a solid economy. The demand for condominiums in the center of cities, which is our main supply area, was solid as some areas saw an increase in the number of households who move seeking the convenience of urban living and the like.

In these business circumstances, Pressance Corporation Co, Ltd. (the "Company") has focused on supplying condominiums in selected places in the central part of major cities in the Kinki, Tokai/Chukyo, and Tokyo metropolitan areas, and other core regions including Okinawa, which are our major sales areas.

Under such business conditions, the Company posted the following consolidated performance for the first three months of the fiscal year ending September 30, 2022. Net sales amounted to 37,007 million yen, operating profit amounted to 6,293 million yen, ordinary profits amounted to 6,563 million yen and profit attributable to owners of parent amounted to 3,976 million yen.

An overview of operating results by business segment is as follows:

Real Estate Sale Business

In the real estate sales business, Pressance Loger Miyakojima Residence (128 units), a family-type condominium in the Pressance Loger series, and Pressance Tennoji North Viale (153 units), a Pressance series studio condominium, have performed favorably.

Furthermore, although this is in line with our plan, sales of studio condominiums and family-type condominiums have decreased significantly due to the smaller number of completed properties compared with the same period of the previous year (October 1, 2020 to December 31, 2020).

The sales of studio condominiums amounted to 10,241 million yen (619 units), sales of family-type condominiums were 16,327 million yen (392 units), sales of detached houses amounted to 876 million yen (21 units), sales of used condominiums 1,672 million yen (113 units), sales of other real estate totaled 6,058 million yen, and business accompanying real estate sales came to 277 million yen. Total sales of the real estate sales business posted 35,454 million yen and segment profit amounted to 6,054 million yen.

Since sales from the condominium business, our main business, are recorded on a delivery basis that is later than completion, there may be fluctuation in the quarterly sales results depending on the timing of land acquisition, development plans and/or construction schedules.

Other Business

With a decrease in rent revenue related to rent guarantees, the sales of the Other business amounted to 1,553 million yen, and segment profit amounted to 495 million yen.

(2) Financial Position

Current Assets

Total current assets as of the end of the first three months of the fiscal year amounted to 228,749 million yen (down 3.6%), which represents a decrease of 8,626 million yen compared with the end of the previous fiscal period. This was due mainly to a decrease in inventory of 4,894 million yen and a decrease in short-term loans receivable from subsidiaries and associates following collection of these loans of 3,555 million yen.

Non-current assets

Total non-current assets as of the end of the first three months of the fiscal year amounted to 19,500 million yen (up 4.6%), which represents an increase of 852 million yen compared with the end of the previous fiscal period. This was due mainly to an increase in real estate for rent of 441 million yen because of the acquisition of self-

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owned real estate, and an increase in shares of subsidiaries and associates of 369 million yen following the posting of share of profit of entities accounted for using the equity method.

Liabilities

Total liabilities as of the end of the first three months of the fiscal year amounted to 97,197 million yen (down 9.8%), which represents a decrease of 10,571 million yen compared with the end of the previous fiscal period. This was mainly due to a 6,374 million yen decrease in loans payable to financial institutions, a 2,053 million yen decrease in income taxes payable due to the payment of income taxes, and a 1,399 million yen decrease in electronically recorded obligations-operating due to an increase in settlements.

Net Assets

Total net assets as of the end of the first three months of the fiscal year amounted to 151,053 million yen (up 1.9%), which represents an increase of 2,796 million yen compared with the end of the previous fiscal period. This was principally due to the increase in retained earnings of 2,883 million yen because of the posting of profit attributable to owners of parent of 3,976 million yen, which offset the cash dividends paid of 1,092 million yen.

Analysis on Cash Flows

Cash and cash equivalents as of the end of the first three months of the fiscal year ending September 30, 2022 totaled 99,672 million yen, which represents a decrease of 250 million yen compared with the end of the previous fiscal period.

The status and factors in each cash flow for the first three months of the fiscal year ending September 30, 2022 are as follows:

Cash flows from operating activities

Net cash provided by operating activities came to 5,148 million yen.

This was mainly due to cash inflow resulting from the posting of 6,563 million yen in profit before income taxes and a decrease in inventories of 4,659 million yen following the delivery of condominiums. Meanwhile, there were cash outflows as a result of a payment of income tax of 3,553 million yen, a decrease in notes and accounts payable-trade of 1,721 million yen reflecting an increase in the settlement of electronically recorded obligations- operating, and other factors.

Cash flows from investing activities

Net cash provided by investing activities came to 3,123 million yen.

This was principally due to cash inflow resulting from a decrease in short-term loans receivable of 3,864 million yen due to the collection of short-term loans receivable from subsidiaries and associates, while there were cash outflows resulting from the acquisition of non-current assets of 530 million yen and loans to subsidiaries and associates of 205 million yen.

Cash Flows from Financing Activities

Net cash used in financing activities came to 8,523 million yen.

This was due mainly to cash outflows resulting from the net decrease in loans payable to financial institutions of 6,374 million yen, repayments of investments to non-controlling shareholders of 1,177 million yen, and the dividend payment of 1,087 million yen.

(3) Explanation for the Forecast of Consolidated Financial Results for the Fiscal Year Ending September 30, 2022

Condominium sales, our major business, have a tendency to excessively skew or cause unevenness in specific quarterly results due to the timing of the delivery of condominiums, because condominium sales are to be posted on the basis of delivery of the condominium units. Our business results in the first three months of the fiscal year ending September 30, 2022 have been making sound progress, and there is no change in our forecasts of consolidated financial results released on November 12, 2021 for the fiscal year ending September 30, 2022.

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