ARUHI : Consolidated Financial Results for the First Three-Month Period of the Fiscal Year Ending March 31, 2023 (under IFRS)

Note: This document has been translated from the Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail.

Consolidated Financial Results for the First Three-Month Period of

the Fiscal Year Ending March 31, 2023 (under IFRS)

August 9, 2022

Company name:	ARUHI Corporation (the "Company")
Listing:	Tokyo Stock Exchange
Securities code:	7198
URL:	https://www.aruhi-group.co.jp
Representative:	Toshihiko Katsuya, Representative Director, President, CEO and COO
Inquiries:	Yasuko Matsumoto, Executive Vice President and CFO
TEL:	[phone]

Scheduled date to file interim securities report:	August 12, 2022
Scheduled date to commence dividend payments:	-
Preparation of supplementary material on interim financial results:	Yes
Holding of interim financial results presentation meeting:	Yes (for analysts)

(Millions of yen with fractional amounts rounded down, unless otherwise noted)

1. Consolidated financial results for the first three-month period of the fiscal year ending March 31, 2023 (from April 1, 2022 to June 30, 2022)

(1) Consolidated operating results (cumulative)				(Percentages indicate year-on-year changes.)
		Operating revenue			Income before tax		Net income	Net income attributable
					to owners of the parent
	Three-month period	Millions of yen		%			Millions of yen	%		Millions of yen	%	Millions of yen		%
	ended
	June 30, 2022	5,937		(13.4)			1,217	(33.4)		839	(33.3)	841		(33.3)
	June 30, 2021	6,854		5.7			1,828	(8.6)		1,258	(8.3)	1,261		(8.1)
		Total comprehensive			Basic earnings per share	Diluted earnings per share
		income
	Three-month period	Millions of yen		%				Yen				Yen
	ended
	June 30, 2022	839		(33.3)				23.82				23.73
	June 30, 2021	1,258		(8.3)				35.50				35.16
(2) Consolidated financial position
		Total assets		Total equity		Equity attributable to		Ratio of equity
					attributable to owners of
										owners of the parent		the parent to total assets
	As of	Millions of yen		Millions of yen		Millions of yen					%
	As of June 30, 2022			148,117			31,707			31,721					21.4
	As of March 31, 2022			150,713			31,877			31,889					21.2

2. Cash dividends

		Annual dividends per share
	First quarter-end	Second quarter-end	Third quarter-end			Fiscal year-end	Total
	Yen	Yen	Yen		Yen	Yen
Fiscal year ended	-	30.00	-		30.00	60.00
March 31, 2022
Fiscal year ending	-
March 31, 2023
Fiscal year ending		30.00	-			30.00	60.00
March 31, 2023
(Forecast)

Note: Revisions to the forecast of cash dividends most recently announced: None

3. Consolidated earnings forecasts for the fiscal year ending March 31, 2023 (from April 1, 2022 to March 31, 2023)

						(Percentages indicate year-on-year changes.)
							Net income		Basic earnings per
	Operating revenue	Income before tax	Net income		attributable to owners
		share
							of the parent
	Millions	%	Millions	%	Millions	%	Millions		%	Yen
	of yen	of yen	of yen	of yen
Fiscal year ending	27,700	10.0	6,300	2.4	4,300	1.8	4,300		1.4	121.48
March 31, 2023

Notes: 1. Revisions to the earnings forecasts most recently announced: None

2. The forecast of the basic earnings per share is calculated based on the weighted-average number of shares during the period of March 31, 2022.

* Notes

1. Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in the change in scope of consolidation): None
2. Changes in accounting policies and changes in accounting estimates
3. 1. Changes in accounting policies required by IFRS: Yes
   2. Changes in accounting policies due to other reasons: None
   3. Changes in accounting estimates: None

Note: Note: For details, please see "(5) Notes to condensed interim consolidated financial statements" in "2. Condensed interim consolidated financial statements and significant notes thereto" in the attached materials.

3) Number of issued shares (ordinary shares)

a. Total number of issued shares at the end of the period (including treasury shares)

b. Number of treasury shares at the end of the period

c. Weighted-average number of shares during the period (cumulative from the beginning of the fiscal year)

As of June 30, 2022		36,080,600	shares	As of March 31, 2022		36,080,600	shares
As of June 30,	2022			shares	As of March 31,	2022			shares
		728,860			769,460
For the three-month					For the three-month
period ended June		35,333,602	shares	period ended June		35,517,924	shares
30,	2022					30,	2021

• Interim financial results reports are exempt from interim review conducted by certified public accountants or an audit corporation.
• Proper use of earnings forecasts, and other special matters (Caution concerning forward-looking statements)
  The forward-looking statements, including earnings forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. These statements do not purport that the Company pledges to realize such statements. Actual business and other results may differ substantially from these forecasts due to various factors.

Table of Contents of Appendix
1. Qualitative information regarding results for the first three-month period............................................................	2
(1)	Explanation of operating results .....................................................................................................................	2
(2)	Explanation of financial position ....................................................................................................................	2
(3)	Explanation of consolidated earnings forecasts and other forward-looking statements ..................................	2
2. Condensed interim consolidated financial statements and significant notes thereto .............................................	3
(1)	Condensed interim consolidated statement of financial position ....................................................................	3
(2)	Condensed interim consolidated statement of net income and condensed interim consolidated statement
	of comprehensive income ...............................................................................................................................	4
(3)	Condensed interim consolidated statement of changes in equity ....................................................................	5
(4)	Condensed interim consolidated statement of cash flows ..................................................................................	6
(5)	Notes to condensed interim consolidated financial statements ..........................................................................	7
	(Note on assumption of going concern) .........................................................................................................	7
	(Changes in accounting policies) .........................................................................................................................	7
	(Segment information)..........................................................................................................................................	7

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1. Qualitative information regarding results for the first three-month period

1. Explanation of operating results
   In the housing-related industry during the first three-month period ended June 30, 2022, the number of brokered contracts decreased year-on-year and the number of new houses constructed remained at about the same level with the previous year since the trend of rising housing prices remained due to the COVID-19 pandemic and the situation in Ukraine. In the mortgage market, variable-interest rate loans continued to dominate against the fixed rate loans due to a widening gap between them and competition in reducing interest rates among banks getting harsher. In the Flat 35 market, the number of executions fell 16.5% year-on-year because customers mainly among the younger generation with little increase in income decided to postpone purchasing a home.
   Under such circumstances in ARUHI Group's housing loan business, we have established branch offices to promote community-based sales activities, and strived to strengthen our sales capability to sell variable interest rate loan products by launching "ARUHI Super 40" (a variable interest rate loan with 40 years repayment period at a maximum) and expanding directly managed stores that sell bank agency products. In addition, we have strengthened our business platform to lead customers thinking of relocation to town/home search, purchasing home and mortgage in order to evolve into a "Homebuying Company". In terms of new businesses, ARUHI Homebuying Concierge Corporation (a company providing consulting services for mortgages, buying/selling of properties and relocation) have strengthened its marketing activities in the Tokyo Metropolitan area, and ARUHI Real Estate Technologies Corporation (a company engaged in the buying/selling of properties) have handed over properties.
   Operating revenue for the first three-month period ended June 30, 2022 was ¥5,937 million, a decrease of ¥917 million (-13.4% YoY). To breakdown, the loan servicing business increased 11.0% year on year, insurance-related operations increased 13.9% YoY, and other business such as new business increased 368.8% year on year. On the other hand, the number of housing loans executed (including refinancing) decreased by 30.3%, which led to a decrease in the loan execution amount by 28.2% and in finance by 19.8% year on year respectively. This is attributable to the facts that the competition in the preowned property market where we have an advantage and in the market in three major metropolitan areas got harsher and customers tended to suspend purchasing a home because of soring house prices. Operating expenses only decreased by 4.2% year on year while variable expenses decreased but strategically strengthening recruitment to promote the sale of bank agency products, which we have competitive advantage. At the result, income before tax decreased by ¥611 million year on year to ¥1,217 million (-33.4% YoY), income for the first three-month period ended June 30, 2022 was ¥839 million (-33.3% YoY), and net income attributable to owners of the parent was ¥841 million (-33.3% YoY).
   As we operates within the single segment of housing loan business, segment description is omitted.
2. Explanation of financial position

(Assets)

As of June 30, 2022, assets decreased by ¥2,595 million year on year to ¥148,117 million. This was primarily due to cash and cash equivalents and operating loans receivable decreasing ¥365 million and ¥2,838 million, respectively, and other financial assets increasing ¥896 million.

(Liabilities)

As of June 30, 2022, liabilities decreased by ¥2,425 million year on year to ¥116,410 million. This was primarily due to deposits received and borrowings decreasing ¥2,444 million and ¥471 million, respectively, and other financial liabilities increasing ¥746 million.

(Equity)

As of June 30, 2022, equity decreased by ¥170 million year on year to ¥31,707 million. This was primarily due to the recording of net income of ¥839 million, despite dividends of surplus of ¥1,059 million.

(3) Explanation of consolidated earnings forecasts and other forward-looking statements

There is no revision to the consolidated earnings forecasts for the fiscal year ending March 31, 2023 announced on "Consolidated Financial Results for the Fiscal Year Ended March 31, 2022 (under IFRS)" released on May 10, 2022.

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