We intend to do everything necessary to ensure smooth progress in first stage of the Nihonbashi Kabutocho and Kayabacho redevelopment project
Overview of Financial Results and Earnings Forecast
In the fiscal year ended March 31, 2019, the Company’s consolidated financial results showed an increase in operating revenue due to higher sales of inventories in the Real Estate Solutions Business, a decline in periodic income resulting from the sale of properties (disposal) in the Leasing Business, and an increase in ordinary income due to factors including an increase in non-operating income. Net income attributable to owners of parent increased due to the recording of extraordinary income from sales of properties owned by the Company in the Leasing Business, reaching a record high for the second consecutive fiscal year. The annual dividend per share was increased by 11 yen compared with the previous fiscal year, to 48 yen per share, a dividend payout ratio of 30.2%.
Forecasts for the fiscal year ending March 31, 2020, predict operating revenue of ¥54.0 billion, as we expect a significant increase in revenue due to substantially higher sales of inventories in the Real Estate Solutions Business, among other factors. Operating income, ordinary income, and net income attributable to owners of parent are all expected to reach record-highs due to revenue contributions from Hotel Emisia Sapporo (Sapporo-shi, Hokkaido) and the Sakae Sun City Building (Nagoya-shi, Aichi) acquired by the Leasing Business in the fiscal year ended March 31, 2019, as well as internal growth from rent increases for existing buildings and higher gains on sales of inventories in the Real Estate Solutions Business. Operating income is expected to reach the ¥10.0 billion level for the first time, and net income attributable to owners of parent is forecast to reach an record-high for the third consecutive fiscal year.
Measures for Increasing Shareholder Returns
To ensure more efficient use of capital and to reward shareholders, in the fiscal year ended March 31, 2019, we acquired treasury stock amounting to 1.2 million shares or ¥2.59 billion. Furthermore, the acquired 1.2 million acquired shares were retired on May 31, 2019. In the fiscal year ending March 31, 2020, we will acquire treasury stock in an amount not to exceed 800,000 shares or ¥2.0 billion.
For the fiscal year ended March 31, 2019, Heiwa Real Estate paid an annual dividend of 48 yen per share, and management decided on an annual dividend of ¥50 per share, a ¥2 increase, for a dividend payout ratio of 30.2%.
In the future, we plan to continue our policy of ensuring stable shareholder returns.
Progress of the Nihonbashi Kabutocho and Kayabacho Revitalization Project
On May 21, 2019, a groundbreaking ceremony was held for the Kabuto One Building (hereafter KABUTO ONE), the first phase of the Nihonbashi Kabutocho and Kayabacho Revitalization Project. The building name “KABUTO ONE” was chosen in the hope that reflects the concept of Kabutocho the historical and current stable starting point (= base) of the Japanese economy. We will work toward opening this building in July 2021.
Moreover, in the Nihonbashi Kabutocho and Kayabacho area, we operate three facilities under the “FinGATE” brand focused on FinTech companies, asset management firms and startups. I think that the success and development of these FinGATE series initiatives will attract FinTech companies and startups, contributing to financial developments while passing on the “Kabuto DNA” as a place where new things begin.
In addition to financial developments, an important part of our efforts involves the revitalization and reinvigoration of the Nihonbashi Kabutocho and Kayabacho area. We have plans to make the entire area bustle with activity by utilizing existing properties in the area targeted for urban redevelopment.
I hope you will share our enthusiasm as we take on the challenge of creating the next-generation Heiwa Real Estate. We are counting on your continued support.
June 28, 2019
Representative Director and President