Leopalace21 Sees Mixed First Half Earnings, Full Year Earnings Estimates of Large Increases in Profits Remain Unchanged

Leopalace21 Corporation (TOKYO:8848), a company that conducts construction, leasing, and sales of apartments, condominiums, and residential housing, announced that its sales declined by 1.4% year-over-year to JPY219.9 billion during the first half of the current fiscal year. At the same time, the Company was able to record an operating income of JPY1.8 billion, which compares with an operating loss JPY2.1 billion recorded during the first half of the previous term, due in part to the LEOPALACE21 Group's implementation of measures designed to establish stable profitability and subsequent improvements made in its leasing business. Despite this return to profits, unrealized foreign exchange losses of JPY2.6 billion and other factors led to the realization of losses at the recurring and net income levels.

At the end of the first half, total assets declined by JP27.4 billion from the end of the previous fiscal year to JPY237.3 billion, due in part to declines of JPY11.8, JPY3.1, and JPY6.1 billion in cash and cash equivalents, prepaid expenses, and long-term pre-paid expenses respectively. Total liabilities fell by JPY29.9 billion from the end of the previous fiscal year to JPY200.9 billion on the back of declines of JPY4.4 billion in accounts payable for completed projects, JPY3.8 billion in unpaid expenses, JPY16.8 billion in short and long term advances received, and JPY3.6 billion in the reserve for apartment vacancy loss. Net assets increased by JPY2.5 billion from the end of the previous fiscal year to JPY36.3 billion due in part to increases in capital and capital surplus of JPY1.6 billion arising from the exercise of stock acquisition rights. Equity ratio rose by 2.5% points over the end of the previous fiscal year to 15.3%.

The Company's earnings estimates for the full fiscal year to March 2013 announced on May 11, 2012 remain unchanged. Therefore sales and operating, recurring and net incomes are expected to rise by 1.0%, 74.4%, 159.6% and 246.1% year-over-year to JPY463.9, JPY8.0, JPY6.1, and JPY5.5 billion respectively.

About Leopalace21 Corporation

Leopalace21 Corporation was established in August 1973 and conducts construction, leasing, and sales of apartments, condominiums, and residential housing, in addition to development and operation of resort facilities, and the operation of hotel business, broadband business, and elderly care business. The Company was first listed on the JASDAQ Market in February 1989, and moved its shares to the First Section of the Tokyo Stock Exchange in March 2004. Its headquarters are currently located in Tokyo.