Consolidated Financial Results for the First Quarter of the

Fiscal Year Ending December 31, 2021 (FY2021)

(Three Months Ended March 31, 2021)

[Japanese GAAP]

April 30, 2021

Company name: Japan Investment Adviser Co., Ltd.

Listed Exchange: Tokyo Stock Exchange, First Section

Stock code:

7172

URL: https://www.jia-ltd.com/

Representative:

Naoto Shiraiwa, President and CEO

Contact:

Takeshi Sugimoto, Director, General Manager of Corporate Administration Division

Tel: +81-3-6550-9307

Scheduled date of filing of Quarterly Report:

May 7, 2021

Scheduled date of dividend payment:

-

Preparation of supplementary materials for quarterly financial results:

Yes

Holding of quarterly financial results meeting:

None

(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Quarter (January 1 to March 31, 2021) of FY2021

(1) Consolidated results of operations (cumulative)

(Percentages represent year-on-year changes)

Net sales

Operating profit

Ordinary profit

Profit attributable to

owners of parent

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Three months ended Mar. 31, 2021

3,732

49.4)

1,938

36.6)

2,425

15.4)

1,370

32.3)

Three months ended Mar. 31, 2020

7,380

(185.8

3,057

(163.4

2,867

(213.8

2,023

(302.2

Note: Comprehensive income

Three months ended Mar. 31, 2021:

1,797 million yen

(down 2.8%)

Three months ended Mar. 31, 2020:

1,848 million yen

(up 214.4%)

Net income per share

Diluted net income per share

Yen

Yen

Three months ended Mar. 31, 2021

45.59

45.40

Three months ended Mar. 31, 2020

67.71

67.06

(2) Consolidated financial position

Total assets

Net assets

Equity ratio

Net assets per share

Million yen

Million yen

%

Yen

As of Mar. 31, 2021

96,442

40,466

41.7

1,337.83

As of Dec. 31, 2020

112,170

39,085

34.7

1,294.62

Reference: Owners' equity

As of Mar. 31, 2021:

40,201 million yen

As of Dec. 31, 2020:

38,903 million yen

2. Dividends

Dividends per share

1Q-end

2Q-end

3Q-end

Year-end

Total

Yen

Yen

Yen

Yen

Yen

FY2020

-

16.00

-

16.00

32.00

FY2021

-

FY2021 (forecast)

16.00

-

16.00

32.00

Note: Revisions to the most recently announced dividend forecast: None

3. Consolidated Forecast for FY2021 (January 1 to December 31, 2021)

(Percentages represent year-on-year changes)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Net income per

owners of parent

share

Million yen

%

Million yen

%

Million yen

%

Million yen

%

Yen

First half

5,520

(47.7)

1,950

(56.0)

1,880

(52.8)

1,330

(51.0)

44.26

Full year

13,000

(26.6)

4,630

(34.0)

4,070

(32.9)

2,800

(26.9)

93.18

Note: Revisions to the most recently announced consolidated forecast: None

* Notes

  1. Changes in significant subsidiaries during the three months ended March 31, 2021 (changes in specified subsidiaries resulting in changes in scope of consolidation): None

Newly added: -

Excluded: -

  1. Application of special accounting methods for presenting quarterly consolidated financial statements: None
  2. Changes in accounting policies and accounting estimates, and restatements
    1. Changes in accounting policies due to revisions in accounting standards, others: None
    2. Changes in accounting policies other than 1) above: None
    3. Changes in accounting estimates: None
    4. Restatements: None
  4. Number of shares issued (common stock)
    1. Number of shares issued at the end of the period (including treasury shares)

As of Mar. 31, 2021

30,590,200 shares

As of Dec. 31, 2020

30,590,200 shares

2) Number of treasury shares at the end of the period

As of Mar. 31, 2021

540,392 shares

As of Dec. 31, 2020

540,392 shares

3) Average number of shares during the period (cumulative)

Three months ended Mar. 31, 2021

30,049,808 shares

Three months ended Mar. 31, 2020

29,881,719 shares

  • The current quarterly financial results are not subject to quarterly review by certified public accountants or auditing firms.
  • Cautionary statement with respect to forward-looking statements, and other special items
    Forecasts of future performance in this document are based on assumption judged to be valid and information currently available to JIA management, but are not promises by JIA regarding future performance. Actual results could differ from the business forecasts due to change in economic conditions, market trends, exchange rate fluctuations and other factors. Please refer to "1. Qualitative Information on Quarterly Consolidated Financial Performance (3) Explanation of Consolidated Forecast and Other Forward-looking Statements" on page 3 for forecast assumptions and notes of caution for usage.

Japan Investment Adviser Co., Ltd. (7172) Financial Results for the First Quarter of FY2021

Contents of Attachments

1. Qualitative Information on Quarterly Consolidated Financial Performance

2

(1)

Explanation of Consolidated Results of Operations

2

(2)

Explanation of Consolidated Financial Position

3

(3)

Explanation of Consolidated Forecast and Other Forward-looking Statements

3

(4)

Regarding COVID-19

3

2. Quarterly Consolidated Financial Statements and Notes

4

(1)

Quarterly Consolidated Balance Sheet

4

(2)

Quarterly Consolidated Statements of Income and Comprehensive Income

6

Quarterly Consolidated Statement of Income

For the Three-month Period

6

Quarterly Consolidated Statement of Comprehensive Income

For the Three-month Period

7

(3)

Notes to Quarterly Consolidated Financial Statements

8

Going Concern Assumption

8

Significant Changes in Shareholders' Equity

8

1

Japan Investment Adviser Co., Ltd. (7172) Financial Results for the First Quarter of FY2021

1. Qualitative Information on Quarterly Consolidated Financial Performance

The Japan Investment Adviser (JIA) Group has two reportable segments: the financial solutions business, which includes primarily the operating lease business, and the media-related business. Only information about the financial solutions business is presented because of the negligible importance of the other business.

(1) Explanation of Consolidated Results of Operations

As for the situation of the global economy during the consolidated first quarter (Jan. 1 to Mar. 31, 2021), the spread of COVID-19 (hereinafter called "the coronavirus crisis") peaked out mainly in countries where vaccines were distributed, and there emerged a sign of gentle economic recovery. On the other hand, the outlook for the Japanese economy remains uncertain, as vaccination is still limited to medical staff and a state of emergency was declared. While the scheduled dates of the Tokyo Olympics and Paralympics are drawing closer, it is expected that efforts for preventing the spread of the novel coronavirus and expanding economic activities will be continued.

In this economic situation, the JIA Group has strived to enhance its corporate value, while focusing on its 3 core businesses (the operating lease business, the renewable energy business, and the aircraft parts-out & conversion business), under the ethos: "Always be a company contributing to society by offering financial services."

The sales of the operating lease business in the first quarter of this consolidated fiscal year was 3,494 million yen, down 51.4% year on year. Amid the coronavirus crisis, the needs from investors remained firm, and sales were as estimated. Equity sales was 18,099 million yen, down 43.9% from the same period of the previous year, which witnessed record-high sales, but the results were almost unchanged from those in the first quarters in 2018 and 2019. The negotiation for making of deals, which had been stagnant due to the coronavirus crisis, was resumed gradually, but the amount of transactions was as small as 20,946million yen, down 67.1% year on year. In the plan designed at the beginning of the term, it was assumed that the number of sales transactions would be small in the second and third quarters. The JIA Group is carefully negotiating for obtaining items to be sold in the fourth quarter.

The sales of the renewable energy business during the same period was 86 million yen, up 10.3% year on year. This is mainly due to the management fees for solar power generation equipment and the revenues from electricity sale. The company decided to own solar power generation equipment rather than establishing funds, until the subsiding of the coronavirus crisis becomes foreseeable. Accordingly, the revenues from electricity sale contributed to sales growth.

There were no sales results in the aircraft parts-out & conversion business during the same period. The company strived to increase transactions in the parts-out business, which manages parts of dismantled aircraft and sells them to companies for maintenance, lease, and airlines, and the conversion business, which converts passenger airplanes into cargo aircraft.

The table below shows the business results of our group for the first quarter of the current fiscal year.

[Unit: Million yen]

First Quarter of the

First Quarter of the

Change rate

Fiscal Year Ending December

Fiscal Year Ending December

Change

(%)

31, 2020 (FY2020)

31, 2021 (FY2021)

Net sales

7,380

3,732

(3,648)

(49.4)

Operating profit

3,057

1,938

(1,119)

(36.6)

Ordinary profit

2,867

2,425

(441)

(15.4)

Profit attributable

2,023

1,370

(653)

(32.3)

to owners of parent

2

Japan Investment Adviser Co., Ltd. (7172) Financial Results for the First Quarter of FY2021

  1. Explanation of Consolidated Financial Position 1) Assets

Total assets decreased 15,728 million yen from the end of 2020 to 96,442 million yen at the end of the first quarter of 2021. This was mainly due to decreases in equity underwritten of 16,691 million yen, cash and deposits of 8,277 million yen, advances paid of 2,286 million yen while there were increases in investment securities of 3,576 million yen, merchandise of 3,324 million yen.

2) Liabilities

Total liabilities decreased 17,109 million yen from the end of 2020 to 55,975 million yen at the end of the first quarter of 2021. This was mainly due to decreases in short-term loans payable of 14,818 million yen, unearned revenue of 1,123 million yen, accounts payable-other of 735 million yen.

3) Net Assets

Total net assets increased 1,380 million yen from the end of 2020 to 40,466 million yen at the end of the first quarter of 2021. This was mainly due to booking of profit attributable to owners of parent of 1,370 million yen. As a result, the equity ratio increased from 34.7% at the end of the previous fiscal year to 41.7%.

(3) Explanation of Consolidated Forecast and Other Forward-looking Statements

As for the operating lease business, which is the mainstay of the corporate group, airlines faced difficulty in coping with the turmoil at the beginning of the coronavirus crisis, but the aircraft leasing business environment is recovering as they strive to do business while coping with the novel coronavirus. In addition, attractive products for investors are sold out quickly even while the future outlook is unclear. Accordingly, the environments for the development and the sales of leasing transactions are expected to recover gradually after bottoming out in the first half of the fiscal year ending December 2021, although it is necessary to pay attention to the signs of escalation and prolongation of the coronavirus crisis.

In addition, in order to develop the core business in the next growth strategy, the company will concentrate on the cross-selling and the advisory business utilizing the customer base.

(4) Regarding COVID-19

If the pandemic of COVID-19 lingers, opportunities to develop deals may decrease due to the worsening of business performance of lessees, including airlines, and the changes in the terms and conditions of lending by financial institutions; investors, mainly small and medium-sized enterprises, may decrease the willingness to invest; and the value of assets owned for the operating lease business may degrade.

The Group conducts estimation for accounting, such as evaluation of assets, based on information available as of the preparation of consolidated financial statements. We conduct estimation for accounting, under the assumption that it will take one to two years to see the pandemic subsiding and the economy returning to the pre-pandemic state. However, the figures obtained through estimation with the best efforts may be different from actual results, due to uncertainties about the future.

In order to cope with these risks appropriately, the Group strives to exchange information with related staff involved in the operating lease business and takes appropriate measures such as making deals targeted at products other than aircraft.

Furthermore, if an employee of our corporate group is infected with the novel coronavirus, the infection spreads through the contact among employees, etc., and our offices are temporarily closed or some of our businesses are temporarily stopped, then the business operation of our corporate group may be affected. In order to secure the safety and peace of mind of clients, business partners, executives, and employees, we implement measures suited for new lifestyles (e.g. promotion of social distancing, wearing of face masks, and health management) as much as possible.

If sales decline, value of owned assets degrade, or our business operation is affected due to the factors mentioned above, despite our countermeasures, then the financial standing and business performance of our corporate group may suffer adverse effects.

3

Japan Investment Adviser Co., Ltd. (7172) Financial Results for the First Quarter of FY2021

2. Quarterly Consolidated Financial Statements and Notes

(1) Quarterly Consolidated Balance Sheet

(Millions of yen)

FY2020

First Quarter of FY2021

(As of Dec. 31, 2020)

(As of Mar. 31, 2021)

Assets

Current assets

Cash and deposits

21,377

13,100

Accounts receivable-trade

4,076

5,528

Merchandise

7,845

11,169

Equity underwritten

28,431

11,739

Costs on uncompleted services

564

1,140

Advance payments-trade

15,971

16,579

Advances paid

19,769

17,482

Short-term loans receivable

1,522

1,926

Deposits paid

2,284

2,133

Operational investment securities

1,677

1,610

Other

1,741

1,086

Total current assets

105,261

83,499

Non-current assets

Tangible fixed assets

357

378

Intangible assets

113

106

Investments and other assets

6,354

12,381

Total non-current assets

6,826

12,867

Deferred assets

Bond issuance cost

83

75

Total deferred assets

83

75

Total assets

112,170

96,442

4

Japan Investment Adviser Co., Ltd. (7172) Financial Results for the First Quarter of FY2021

(Millions of yen)

FY2020

First Quarter of FY2021

(As of Dec. 31, 2020)

(As of Mar. 31, 2021)

Liabilities

Current liabilities

Accounts payable-trade

18

67

Accounts payable-operating

191

93

Short-term loans payable

56,415

41,596

Current portion of long-term loans payable

2,132

1,886

Current portion of bonds

1,136

1,236

Accounts payable-other

799

63

Unearned revenue

2,772

1,717

Income taxes payable

15

473

Provision for bonus

302

429

Other

591

425

Total current liabilities

64,374

47,989

Non-current liabilities

Bonds payable

2,170

1,790

Long-term loans payable

6,424

6,047

Other

115

148

Total non-current liabilities

8,710

7,986

Total liabilities

73,084

55,975

Net assets

Shareholders' equity

Capital stock

11,670

11,670

Capital surplus

11,605

11,605

Retained earnings

17,134

18,054

Treasury shares

(1,470)

(1,470)

Total shareholders' equity

38,938

39,859

Accumulated other comprehensive income

Valuation difference

on

available-for-sale

116

150

securities

191

Foreign currency translation adjustment

(152)

Total accumulated

other

comprehensive

(35)

342

income

Subscription rights to shares

15

8

Non-controlling interests

166

255

Total net assets

39,085

40,466

Total liabilities and net assets

112,170

96,442

5

Japan Investment Adviser Co., Ltd. (7172) Financial Results for the First Quarter of FY2021

(2) Quarterly Consolidated Statements of Income and Comprehensive Income

(Quarterly Consolidated Statement of Income) (For the Three-month Period)

(Millions of yen)

First three months of FY2020

First three months of FY2021

(Jan. 1 - Mar. 31, 2020)

(Jan. 1 - Mar. 31, 2021)

Net sales Cost of sales Gross profit

Selling, general and administrative expenses Operating profit

Non-operating income

Gain on sales of equity underwritten Interest income

Foreign exchange gains Other

Total non-operating income Non-operating expenses

Interest expenses Commission fee

Share of loss of entities accounted for using equity method

Foreign exchange losses Other

Total non-operating expenses Ordinary profit Extraordinary income

Gain on reversal of stock acquisition rights Total extraordinary income

Profit before income taxes Income taxes

Profit

Profit attributable to non-controlling interests Profit attributable to owners of parent

7,380

3,732

3,232

568

4,148

3,163

1,090

1,225

3,057

1,938

210

89

49

63

-

747

49

159

308

1,060

208

147

146

282

17

134

103

-

23

8

499

572

2,867

2,425

-

6

-

6

2,867

2,432

834

1,013

2,032

1,419

9

49

2,023

1,370

6

Japan Investment Adviser Co., Ltd. (7172) Financial Results for the First Quarter of FY2021

(Quarterly Consolidated Statement of Comprehensive Income)

(For the Three-month Period)

(Millions of yen)

First three months of

First three months of

FY2020

FY2021

(Jan. 1 - Mar. 31, 2020)

(Jan. 1 - Mar. 31, 2021)

Profit

2,032

1,419

Other comprehensive income

Valuation difference on available-for-sale

(167)

33

securities

Foreign currency translation adjustment Total other comprehensive income

Comprehensive income Comprehensive income attributable to

Comprehensive income attributable to owners of parent

Comprehensive income attributable to non-controlling interests

(16)343

(183)377

1,8481,797

1,8391,747

949

7

Japan Investment Adviser Co., Ltd. (7172) Financial Results for the First Quarter of FY2021

(3) Notes to Quarterly Consolidated Financial Statements (Going Concern Assumption)

Not applicable.

(Significant Changes in Shareholders' Equity)

Not applicable.

This financial report is solely a translation of "Kessan Tanshin" (in Japanese, including attachments), which has been prepared in accordance with accounting principles and practices generally accepted in Japan, for the convenience of readers who prefer an English translation.

8

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Japan Investment Adviser Co. Ltd. published this content on 30 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2021 06:03:13 UTC.