HEIWA REAL ESTATE CO., LTD. First Half of 31, 2009 HEIWA REAL ESTATE CO., LTD. Nov. 12, 2008 Security Code: 8803
CONTENTS Page Page Consolidated Financial Results for First Half of 31, 2009 3 Housing - Expansion of Condominium Sales - 9 Information by Segment - Building - 4 Asset Development - Expansion of Projects - 10 Building - Sapporo - 5 Forecasted Consolidated Financial Results for 31, 2009 11 Information by Segment - Housing - 6 Key Items for Forecasted Consolidated Financial Results for 31, 2009 12 Information by Segment - Asset Development - 7 Dividend Policy 13 Building - Expansion of Development Projects - 8 This document contains forward-looking statements pertaining to the future plans and business results of the Company. These forecasts are based on the Company s current assumptions and beliefs in light of the information currently available to it, and, therefore, the Company s actual results may differ materially from those discussed in these forecasts as a result of numerous factors outside of the Company s control. The Company and the information providers assume no responsibility for any damage arising from use of this data. 2 HEIWA REAL ESTATE CO., LTD.
Consolidated Financial Results for First Half of Ending March 31, 2009 Year Ended March 31, 2008 Year 31, 2009 Year-on-Year Year-on-Year (%) Operating revenue 13,012 14,123 +1,111 +8.5 Building 8,628 9,380 +752 +8.7 Housing 1,276 2,448 +1,171 +91.8 Asset Development 1,830 1,285 (544) (29.8) Other Businesses 1,277 1,009 (268) (21.0) Operating income 4,887 3,709 (1,178) (24.1) Building 3,893 4,280 +386 +9.9 Housing 76 (684) (760) Asset Development 1,477 772 (705) (47.7) Other 39 (88) (127) (322.3) Elimination or Corporate (600) (571) +28 Ordinary income 4,124 2,351 (1,772) (43.0) Extraordinary Loss 59 1,651 1,592 +2,696.2 Net income 2,338 304 (2,033) (87.0) 3 HEIWA REAL ESTATE CO., LTD.
Information by Segment - Building - Revenue increase of 754 million driven by acquisition of a new building and operation for the full year of buildings acquired in the previous fiscal year. [Newly acquired Shin-Odori Bldg.] [Full-year operation Nagoya Stock Exchange Bldg. and 7 other buildings] Negotiations are underway regarding the revision of the rent for the Tokyo Stock Exchange Bldg. An amount equal to the previous year s rent has been recorded. Vacancy rate: 1.3% Year Ended March 31, 2008 Year 31, 2009 Year-on-Year Year-on-Year (%) Operating revenue 8,628 9,380 +752 +8.7 Leasing income 8,613 9,367 +754 +8.8 Other 14 12 (1) (9.4) Operating income 3,893 4,280 +386 +9.9 Vacancy rate (%) 1.2 1.3 +0.1 4 HEIWA REAL ESTATE CO., LTD.
Building - Sapporo - Shin-Odori Bldg. <<Summary>> Location: 4-1 Odori-Nishi, Chuo-ku, Sapporo Site area: 2,134.34 m 2 Total floor area: 17,319.05 m 2 Scale: 10 stories above ground and 2 stories underground : April 1979 Purpose: Office Main tenants: NEC group companies, Shoko Chukin Bank, etc. Acquisition of a share in the Shin-Odori Bldg. (May 2008) Share: Land 46.91% Building 57.56% Daiwa Resona Bldg. Shin-Odori Bldg. Mitsukoshi Hokuyo Odori Bldg. Annex Mitsukoshi Sapporo Odori Post Office Kita Ichijo Miyanosawa Dori Hokuriku Bank Sapporo branch Sapporo Ekimae-dori Nanboku Line Odori Station Dogin Bldg. Odori Tozai Line Odori Station Tram Nishi 4-chome Station Minami Ichijo Dori 5 HEIWA REAL ESTATE CO., LTD.
Information by Segment - Housing - [Housing Sales] WELLITH KOMAGOME RESIDENCE Sold out Sakuradutsumi Faithia Repriced in August Operating revenue Income from sales of housing units First Half of Ended March 31, 2008 Year 31, 2009 Year-on-Year Year-on-Year (%) 955 2,046 +1,090 +114.1 894 1,701 +807 +90.3 Other 61 345* +283 +458.9 Operating income (24) (838) (813) Number of units sold 22 24 +2 +9.1 * This amount includes penalties received due to the cancellation of en bloc sales of condominiums. [Housing Leasing] Operating revenue Operating income Number of units leased at period end First Half of Ended March 31, 2008 Year 31, 2009 Year-on-Year Year-on-Year (%) 320 401 +80 +25.3 101 153 +52 +51.5 516 541 +25 +4.8 6 HEIWA REAL ESTATE CO., LTD.
Information by Segment - Asset Development - Dividend income of approx. 1 billion yen (Sale of AZABU EAST Serviced Apartments) contributed to the operating revenue in the previous fiscal year. Increase in income from real estate in trust, etc. Approx. 0.5 billion yen Capital gains on the sale of developed properties are expected in the second half of the fiscal year. Year Ended March 31, 2008 Year Ending March 31, 2009 Year-on-Year Year-on-Year (%) Operating revenue Management fee Income from real estate in trust, etc. 1,830 1,285 (544) (29.8) 1,830 1,285 (544) (29.8) Capital gains 0 0 0 Operating income 1,477 772 (705) (47.7) 7 HEIWA REAL ESTATE CO., LTD.
Building - Expansion of Development Projects - Hotel Brighton City Osaka Kitahama CentRise Sakae Japan Information Processing Service Headquarters Bldg. Project name Medium-Term Management Plan (Growth 2009) Ended March 31, 2007 Ended March 31, 2008 Ending March 31, 2009 31, 2010 31, 2011 31, 2012 The Nagoya Stock Exchange Bldg. Hotel Brighton City Osaka Kitahama CentRise Sakae Demolition Ichibancho Heiwa Bldg. Japan Information Processing Service Headquarters Bldg. Acquisition Acquisition 8 HEIWA REAL ESTATE CO., LTD.
Housing - Expansion of Condominium Sales - The Kitahama SHINKA CITY Station Suite GLORIO Rokakoen Project Name 31, 2006 Medium-Term Management Plan (Growth 2009) 31, 2007 31, 2008 31, 2009 31, 2010 31, 2011 The Kitahama (total units: 465) GLORIO Rokakoen (total units: 363) SHINKA CITY Station Suite (total units: 356) Todakoen Project 1st stage (total units: undecided) Note: Please refer to page 8 of Fact Book for the tabulated list of the purchased building lots for sale, including the above-mentioned lots. 9 HEIWA REAL ESTATE CO., LTD.
Asset Development - Expansion of Projects - Shiodome Bldg. Heiwa Higashi-Nihonbashi Bldg. Higashi-Nihonbashi 2-chome Project Kita-Shinjuku Project Project Name Forms of Investment 31, 2006 Medium-Term Management Plan (Growth 2009) 31, 2007 31, 2008 31, 2009 31, 2010 31, 2011 Shiodome Bldg. Office, Commercial Equity (joint business) Operation Heiwa Higashi-Nihonbashi Bldg. Office, Commercial Higashi-Nihonbashi, 2-chome Office Direct investment Direct investment Kita-Shinjuku Direct Office, Commercial, Parking investment space (joint business) Shinjuku, 6-chome Office, Commercial, Condominium, Cultural Exchange Facility Equity (joint business) Operation/Sale Operation/Sale 10 HEIWA REAL ESTATE CO., LTD.
Forecasted Consolidated Financial Results for Ending March 31, 2009 31, 2008 31, 2009 (Forecast) Year-on-Year Medium-Term Management Target set at Revised forecast Amount Rate (%) Plan (target)* beginning of year Operating revenue 31,384 54,500 48,500 +17,116 +54.5 32,000 Building Leasing 17,717 27,100 26,100 +8,383 +47.3 17,600 Housing 5,752 11,000 11,000 +5,248 +91.2 9,400 Asset Development 5,423 13,800 9,200 +3,777 +69.6 3,000 Other businesses 2,490 2,600 2,200 (290) (11.6) 2,000 Operating income 9,205 12,500 9,100 (105) (1.1) 10,000 Building 7,603 9,200 8,400 +797 +10.5 8,100 Housing 429 600 (700) (1,129) (263.2) 1,000 Asset Development 2,167 3,600 2,700 +533 +24.6 1,900 Other 252 400 0 (252) (100.0) 100 Elimination or Corporate (1,248) (1,300) (1,300) (52) (1,100) Ordinary income 7,176 9,700 6,000 (1,176) (16.4) 9,000 Extraordinary Loss 878 200 1,900 1,021 116.2 Net income 3,737 5,500 2,200 (1,537) (41.1) 5,000 EBITDA 14,571 18,000 15,000 429 14,000 or more ROA (%) 3.1 4.2 3.0 5.0 or more ROE (%) 5.5 7.4 3.5 7.0 or more D/E ratio (times) 2.8 2.5 2.7 1.5 or less * Announced on November 28, 2005 11 HEIWA REAL ESTATE CO., LTD.
Key Items for Forecasted Consolidated Financial Results for Fiscal Year 31, 2009 [Building] Steady increase in leasing income Accounts for 80% of total operating income Asset sales (renewal) [Housing] Number of units sold: Approx. 160 WELLITH KOMAGOME RESIDENCE/The Kitahama Sold out SOUTH ALL CITY Sakuradutsumi Faithia Loss on revaluation of inventories will be reported. Housing leasing: Stable operating income of 0.3 billion yen [Asset Development] Sale of developed properties and increased income from real estate in trust, etc. will help increase both sales and profit. [Extraordinary Loss] Loss on revaluation of investment securities: 1.4 billion yen 12 HEIWA REAL ESTATE CO., LTD.
Dividend Policy Consolidated dividend payout ratio: 30% or more. Annual dividend: stable distribution of 10 yen per share The annual dividend for the year ending March 31, 2009 period is planned to be 12 yen per share (6 yen at mid term and 6 yen at term end). 31, 2005 31, 2006 31, 2007 31, 2008 Ending March 31, 2009 (forecast) Net income per share (yen) 26.4 34.6 31.9 25.5 14.8 Dividend payout ratio (%) *1 34.5 29.3 31.3 46.9 81.0 Annual dividend per share (yen) *2 9 10 10 12 12 *1 Non-consolidated results are shown for until the year ended March 31, 2006 and consolidated results thereafter. *2 Including 1.5 yen for the year ended March 31, 2005, and the 2 yen anniversary dividend for the year ended March 31, 2008. 13 HEIWA REAL ESTATE CO., LTD.