プレサンスコーポレーション（3254） – [Delayed]Consolidated Financial Results for the First Six 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. Consolidated Financial Results for the First Six Months of the Fiscal Year Ending September 30, 2022 May 13, 2022 Company name: Pressance Corporation Co., Ltd. Listing: Section code: URL: Representative: Yutaka Doi, President and Representative Director Contact: Standard Market of the Tokyo Stock Exchange 3254 https://www.pressance.co.jp/ Kyosuke Ichikawa, Executive Officer, Deputy General Manager of Management Division, and General Manager of Accounting Department TEL: +81-6-4793-1650 Scheduled date of filing of quarterly securities report: Scheduled date of start of dividend payment: Preparation of supplementary quarterly materials for financial results: Holding of quarterly financial results presentation meeting: May 13, 2022 June 2, 2022 Yes No 1. Consolidated operating results for the first six months of the fiscal year ending September 30, (Amounts less than one million yen have been omitted.) 2022 (from October 1, 2021 to March 31, 2022) (1) Consolidated operating results First six months of the fiscal year ending September 30, 2022 First six months of the fiscal period ended September 30, 2021 Note: Comprehensive income Net sales Operating profit Ordinary profit Millions of yen % Millions of yen % Millions of yen % Millions of yen % (Percentages indicate year on year changes compared with the same period of the previous FY) Profit attributable to owners of parent 71,785 ― 10,988 ― 11,178 ― 6,907 ― ― ― ― ― ― ― ― ― First six months of the fiscal year ending September 30, 2022: 7,899 million yen [(-)%] First six months of the fiscal period ended September 30, 2021: – million yen [(-)%] Basic earnings per share Diluted earnings per share Yen Yen 101.33 First six months of the fiscal year ending September 30, 2022 First six months of the fiscal period ended September 30, 2021 Note: Effective the fiscal period ended September 30, 2021, we have changed the fiscal year-end from March 31 to September 30. We did not have a fiscal year that includes the six-month period from October 1, 2020 to March 31, 2021 as the first half of the fiscal year; thus, consolidated operating results for the first six months of the fiscal period ended September 30, 2021 and year-on-year changes are not provided. 100.94 ― ― (2) Consolidated financial position Total assets As of March 31, 2022 As of September 30, 2021 Reference: Equity As of March 31, 2022 As of September 30, 2021 153,909 million yen 147,400 million yen Net assets Equity ratio Millions of yen 252,585 256,024 Millions of yen 154,272 148,256 % 60.9 57.6 2. Dividends Fiscal period ended September 30, 2021 Fiscal year ending September 30, 2022 Fiscal year ending September 30, 2022 (Forecast) 1st quarter-end Yen 2nd quarter-end Yen Annual dividends per share 3rd quarter-end Yen ― ― ― 16.00 Year-end Annual total Yen 16.00 Yen 16.00 16.00 32.00 ― ― Note: Revisions to the dividend 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 owners of parent Basic earnings per share Net sales Operating profit Ordinary profit Full year Millions of yen % Millions of yen % Millions of yen % Millions of yen % 11,700 ― 142,500 ― 17,800 ― 18,000 ― Yen 171.40 Note: Revisions to the results forecasts most recently announced: Yes 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 stated. For details of the revision to earnings forecasts, please refer to “Revisions to Full-year Earnings Forecasts for the Fiscal Year Ending September 30, 2022” released on May 13, 2022. (Japanese version only.) Notes * (1) Changes in significant subsidiaries during the period (changes in specified subsidiaries resulting in a change in the 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-year pretax income for the current fiscal year, including the actual income figure for the first six 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 a. Changes in accounting policies due to amendments to accounting standards and other regulations: None b. Changes in accounting policies due to reasons other than a. above: None c. Changes in accounting estimates: None d. Restatement after error corrections: None (4) Number of issued shares (common stock) a. Number of issued shares at the end of each period (including treasury shares) As of March 31, 2022 As of September 30, 2021 b. Number of treasury shares at the end of period As of March 31, 2022 As of September 30, 2021 c. Average number of shares during the period 69,203,516 shares 68,858,316 shares 848,721 shares 867,061 shares First six months of the fiscal year ending September 30, 2022 First six months of the fiscal period ended September 30, 2021 68,170,823 shares – shares Note: Due to the introduction of the share-based payment-type employee stock ownership plan (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 March 31, 2022 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 calculating the “Average number of shares during the period” (309,373 shares for the first six months of the fiscal year ending September 30, 2022). *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 it will achieve such statements Actual business results and other results may differ substantially due to various factors. Actual business results 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 “(3) Explanation of the Forecast of Consolidated Financial Results for the Fiscal Year Ending September 30, 2022” in “1. Quarterly Qualitative Information” on page 2of the attachment. (Method of Obtaining Supplementary Materials for Quarterly Financial Results) Supplementary materials for quarterly financial results are available on TDnet and 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 six months of this fiscal year covers (October 1, 2021 to March 31, 2022) is different from the first six months of the fiscal period ended September 30, 2021(April 1, 2021 to September 30, 2021). As the severe impact of the COVID-19 pandemic has been easing, the Japanese economy showed signs of picking up during the first six months of the fiscal year ending September 30, 2022. On the other hand, it is necessary to pay close attention to downside risks to the economy due to supply constraints as well as price hikes of raw materials, the impact of the COVID-19 pandemic and other factors. 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 risk of a resurgence in the COVID-19 pandemic, an increase in land costs in cities and construction costs and the like are causes for concern, 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 are moving 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 its major sales areas. Under such business conditions, the Company posted the following consolidated performance for the first six months of the fiscal year ending September 30, 2022. Net sales amounted to 71,785 million yen, operating profit was 10,988 million yen, ordinary profit came to 11,178 million yen and profit attributable to owners of parent posted 6,907 million yen. An overview of operating results by business segment is as follows: Real Estate Sales Business In the real estate sales business, Pressance Loger Miyakojima Residence (128 units), a family-type condominium in the Pressance Loger series, and Pressance Sakaisuji Hommachi Destiny (196 units), a Pressance series studio condominium, have performed favorably. In addition, 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 March 31, 2021). The sales of studio condominiums amounted to 27,243 million yen (1,588 units), sales of family-type condominiums were 29,315 million yen (702 units), sales of detached houses amounted to 2,276 million yen (55 units), sales of used condominiums 2,765 million yen (193 units), sales of other real estate totaled 6,135 million yen, and business accompanying real estate sales came to 470 million yen. Total sales of the real estate sales business posted 68,207 million yen and segment profit amounted to 10,456 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 3,577 million yen, and segment profit was 1,028 million yen. (2) Financial Position Current Assets Total current assets as of the end of the first six months of this fiscal year amounted to 233,561 million yen (down 1.6%), which represents a decrease of 3,814 million yen compared with the end of the previous fiscal period. This was due mainly to a decrease in inventory of 4,111 million yen and a fall in short-term loans receivable from subsidiaries and associates following collection of these loans of 3,960 million yen, which offset an increase in cash and deposits of 4,030 million yen. 1 Non-current Assets Total non-current assets as of the end of the first six months of the fiscal year came to 19,023 million yen (up 2.0%), which represents an increase of 375 million yen compared with the end of the previous fiscal period. This was due mainly to an increase in real estate for rent of 253 million yen because of the acquisition of self-owned real estate. Liabilities Total liabilities as of the end of the first six months of the fiscal year amounted to 98,312 million yen (down 8.8%), which represents a decrease of 9,455 million yen compared with the end of the previous fiscal period. This was mainly due to an 8,560 million yen decrease in loans payable to financial institutions and a 437 million yen drop in income taxes payable due to the payment of income taxes. Net Assets Total net assets as of the end of the first six months of the fiscal year amounted to 154,272 million yen (up 4.1%), which represents an increase of 6,016 million yen compared with the end of the previous fiscal period. This was principally due to the increase in retained earnings of 5,814 million yen because of the posting of profit attributable to owners of parent of 6,907 million yen, which offset the cash dividends paid of 1,092 million yen. Analysis of Cash Flows Cash and cash equivalents as of the end of the first six months of the fiscal year ending September 30, 2022 totaled 103,953 million yen, which represents an increase of 4,030 million yen compared with the end of the previous fiscal period. The status and factors in each cash flow for the first six 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 11,514 million yen. This was mainly due to cash inflow resulting from the posting of 11,058 million yen in profit before income taxes and a decrease in inventories of 4,672 million yen following the delivery of condominiums, while there was a cash outflow as a result of paying income tax of 3,589 million yen. Cash flows from investing activities Net cash provided by investing activities came to 2,993 million yen. This was principally due to a cash inflow resulting from a decrease in short-term loans receivable of 4,303 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 1,116 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 10,479 million yen. This was due mainly to cash outflows resulting from the net decrease in loans payable to financial institutions of 8,560 million yen, repayments of investments to non-controlling shareholders of 1,177 million yen, and the dividend payment of 1,092 million yen. (3) Explanation of the Forecast of Consolidated Financial Results for the Fiscal Year Ending September 30, 2022 With regard to the consolidated earnings forecast for the fiscal year ending September 30, 2022, based on the operating results for the first six months of this fiscal year, the Company has revised the earnings forecasts announced on November 12, 2021. For details, please refer to “Revisions to Full-year Earnings Forecasts for the Fiscal Year Ending September 30, 2022” released on May 13, 2022. (Japanese version only.) 2 3. Quarterly Consolidated Financial Statements (1) Quarterly Consolidated Balance Sheets As of September 30, 2021 As of March 31, 2022 (Millions of yen) Assets Current assets Cash and deposits Accounts receivable – trade Real estate for sale Real estate for sale in process Raw materials and supplies Other Allowance for doubtful accounts Total current assets Non-current assets Property, plant and equipment Real estate for rent, net Other, net Total property, plant and equipment Intangible assets Investments and other assets Total non-current assets Total assets Liabilities Current liabilities Notes and accounts payable – trade Electronically recorded obligations – operating Short-term loans payable Current portion of long-term loans payable Income taxes payable Advances received Provision for bonuses Other Total current liabilities Non-current liabilities Long-term loans payable Provision for share-based payment Other Total non-current liabilities Total liabilities Net assets Shareholders’ equity Capital stock Capital surplus Retained earnings Treasury shares Total shareholders’ equity Accumulated other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Total accumulated other comprehensive income Subscription rights to shares Non-controlling interests Total net assets Total liabilities and net assets 3 103,138 89 23,491 102,347 143 8,290 (124) 237,376 14,592 469 15,062 101 3,484 18,648 256,024 367 1,704 920 38,228 3,730 5,024 226 3,929 54,131 52,798 257 581 53,637 107,768 6,890 7,892 133,489 (883) 147,388 10 1 11 439 416 148,256 256,024 107,168 108 14,269 107,443 157 4,548 (134) 233,561 14,846 493 15,339 120 3,563 19,023 252,585 197 3,186 1,085 20,491 3,292 4,809 213 2,634 35,910 61,809 284 308 62,402 98,312 7,211 8,230 139,304 (865) 153,880 10 18 28 351 12 154,272 252,585 (2) Quarterly Consolidated Statements of Income and Comprehensive Income Quarterly Consolidated Statements of Income (Millions of yen) First six months of the fiscal year ending September 30, 2022 (October 1, 2021 to March 31, 2022) Net sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income Interest income Dividend income Share of profit of entities accounted for using equity method Foreign exchange gains Commission fee Penalty income Other Total non-operating income Non-operating expenses Interest expenses Provision of allowance for doubtful accounts Commission fee Other Total non-operating expenses Ordinary profit Extraordinary losses Loss on sale of shares of subsidiaries and associates Total extraordinary losses Profit before income taxes Income taxes Net income Profit attributable to non-controlling interests Profit attributable to owners of parent 71,785 53,012 18,772 7,783 10,988 60 1 340 132 20 21 59 636 325 9 107 2 445 11,178 119 119 11,058 3,175 7,883 975 6,907 4 Quarterly Consolidated Statements of Comprehensive Income (Millions of yen) First six months of the fiscal year ending September 30, 2022 (October 1, 2021 to March 31, 2022) Net income Other comprehensive income Valuation difference on available-for-sale securities Foreign currency translation adjustment Share of other comprehensive income of entities accounted for using equity method Total other comprehensive income Comprehensive income Comprehensive income attributable to Comprehensive income attributable to owners of parent Comprehensive income attributable to non-controlling interests 7,883 0 2 13 16 7,899 6,924 975 5 (3) Quarterly Consolidated Statements of Cash Flows (Millions of yen) First six months of the fiscal year ending September 30, 2022 (October 1, 2021 to March 31, 2022) Cash flows from operating activities Profit before income taxes Depreciation Amortization of goodwill Increase (decrease) in allowance for doubtful accounts Interest and dividend income Interest expenses Foreign exchange losses (gains) Share of (profit) loss of entities accounted for using equity method Decrease (increase) in inventories Increase (decrease) in notes and accounts payable – trade Share-based remuneration expenses Increase (decrease) in provision for bonuses Increase (decrease) in provision for share-based payment Loss (gain) on sale of shares of subsidiaries and associates Increase (decrease) in advances received Decrease (increase) in consumption taxes refund receivable Increase (decrease) in accrued consumption taxes Other Subtotal Interest and dividend income received Interest expenses paid Income taxes paid Net cash provided by operating activities Cash flows from investing activities Payments into time deposits Purchase of non-current assets Proceeds from sales of non-current assets Purchase of investment securities Proceeds from sale of shares of subsidiaries and associates Payments of loans receivable from subsidiaries and associates Decrease (increase) in short-term loans receivable Net cash provided by investing activities Cash Flows from Financing Activities Proceeds from long-term loans payable Repayments of long-term loans payable Proceeds from issuance of shares Purchase of treasury shares Cash dividends paid Dividends paid to non-controlling interests Net increase (decrease) in short-term loans payable Repayments to non-controlling shareholders Net cash used in financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period 6 11,058 236 9 9 (61) 325 (132) (340) 4,672 1,124 18 (13) 27 119 (217) (188) (879) (602) 15,167 268 (332) (3,589) 11,514 (0) (1,116) 1 (5) 16 (205) 4,303 2,993 26,275 (35,000) 553 (0) (1,092) (202) 165 (1,177) (10,479) 2 4,030 99,922 103,953 3. Others Actual orders and sales Studio condominiums Family-type condominiums Sale of hotel property Used condominiums Sale of other real estate Studio condominiums Family-type condominiums Sale of hotel property Used condominiums Sale of other real estate Effective the fiscal period ended September 30, 2021, the fiscal year-end has been changed from March 31 to September 30. For ease of comparison, the results for the same period a year ago (October 1, 2020 to March 31, 2021) are provided. (1) Actual orders The same period a year ago (October 1, 2020 to March 31, 2021) Name of segment Category Total amount of contracts Outstanding balance of contracts Number of units Year on year (%) Amount (Millions of yen) Year on year (%) Number of units Year on year (%) Amount (Millions of yen) Year on year (%) 3,025 153.1 47,166 123.8 3,000 86.4 46,226 76.3 Real estate sales business 12 65 Detached houses 185.7 2,250 174.1 200.0 2,018 192.8 847 95.7 35,067 104.3 1,052 51.2 44,418 58.7 7.1 313 8.2 180 31.6 4,250 30.7 187 168.5 2,701 164.0 271.4 561 306.7 － － 1,875 15.4 － 400 8.0 Total amount of reportable segments 4,136 130.2 89,374 98.6 4,328 70.5 97,875 62.6 First six months of the fiscal year ending September 30, 2022 (from October 1, 2021 to March 31, 2022) Name of segment Category Total amount of contracts Outstanding balance of contracts Number of units Year on year (%) Amount (Millions of yen) Year on year (%) Number of units Year on year (%) Amount (Millions of yen) Year on year (%) 1,663 55.0 28,850 61.2 2,028 67.6 31,062 67.2 * 820 96.8 34,046 97.1 1,196 113.7 51,905 116.9 － － － － － － － Real estate sales business Detached houses 73 112.3 3,012 133.8 103.4 2,594 128.5 230 123.0 3,246 120.2 210.5 1,125 200.5 － － 309 16.5 － 499 124.8 Total amount of reportable segments 2,786 67.4 69,464 77.7 3,364 77.7 87,186 89.1 Notes: 1. In the table above, “total amount of orders” has been replaced with “total amount of contracts.” 2. Amounts of additional constructions are included in the above amounts. 3. Number of units in total amount of contracts and the outstanding balance of contracts may fluctuate due to changes in business plans and others. 4. Until the last fiscal period ended September 30, 2021, sales of houses other than newly built condominiums, including the used condominiums and detached houses, were presented under the category of “sale of other type of housing.” Starting from the first three months of this fiscal year, however, they are now presented under “detached houses” and “used condominiums” respectively. In order to reflect the change in category, “sale of other type of housing” in the same period of the previous year has been reclassified under the current presentation. 5. Sale of other real estate refers to the sale of real estate other than housing, including commercial facilities, commercial stores, and land for development. 6. The total amount of contracts and outstanding balance of contracts for sale of other real estate in the same period of the previous year refer to land for development. The total amount of contracts and outstanding balance of contracts for sale of other real estate in the first six months of the fiscal year ending September 30, 2022 refer to commercial stores and land for development. 7 58 38 － － 60 80 － * The total amount of contracts and the outstanding balance of contracts for studio condominiums in the first six months of the fiscal year ending September 30, 2022 have decreased significantly compared with the same period of the previous year. This is mainly due to the non-recurrence of large contracts of 14,495 million yen with two non-Group companies for 14 buildings (1,044 units) in the same period of the previous year. (2) Actual sales Name of segment Category Studio condominiums Family-type condominiums Sale of hotel property Used condominiums Sale of other real estate Business accompanying real estate sale The same period a year ago (October 1, 2020 to March 31, 2021) First six months of the fiscal year ending September 30, 2022 (October 1, 2021 to March 31, 2022) Number of units Year on year (%) Amount (Millions of yen) Year on year (%) Number of units Year on year (%) Amount (Millions of yen) Year on year (%) 3,214 147.6 52,026 126.5 1,588 939 132.8 36,601 141.7 702 289 43.5 6,240 38.4 27,243 29,315 － 52.4 80.1 － － 55 1 － 49.4 74.8 － 79.7 － － 54.2 － 54.2 Real estate sales business Detached houses 69 176.9 2,299 176.4 2,276 99.0 172 159.3 2,479 154.4 193 112.2 2,765 111.5 － － － － 649 147.8 4,160 50.8 6,135 147.5 470 68,207 3,577 71,785 72.5 65.3 90.7 66.2 Total amount of reportable segments Other Total 4,683 － 4,683 126.7 － 126.7 104,457 3,944 108,402 110.3 101.2 109.9 2,539 － 2,539 Notes: 1. Amounts of additional constructions are included in the above amounts. 2. Until the last fiscal period ended September 30, 2021, sales of houses other than newly built condominiums, including the used condominiums and detached houses, were presented under the category of “sale of other type of housing.” Starting from the first three months of this fiscal year, however, they are now presented under “detached houses” and “used condominiums” respectively.” In order to reflect the change in category, “sale of other type of housing” in the same period of the previous year has been reclassified under the current presentation. 3. Sale of other real estate refers to the sale of real estate other than housing, including commercial facilities, commercial stores, and land for development. 4. Business accompanying real estate sale includes income from post-delivery optional construction work such as floor coating and income from intermediation fees from real estate sales. 5. Sale of other real estate in the same period of the previous year refers to land for development. Sale of other real estate in the first six months of the fiscal year ending September 30, 2022 refers to commercial facilities, commercial stores, and land for development. 8