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In spite of a continued difficult business environment
as a result of the ongoing legacy of the bursting of Japan' economic
bubble in the early 1990s, the Daiwa House group managed to secure sales
and operating income levels not far removed from the initial targets.
Sales came to ¥1,184,544 million (US$9,871.2 million) on a consolidated
basis, up 3% over the initial target, and operating income came to ¥45,272
million (US$377.2 million), down 6.7% from the target. The management
of the Daiwa House group, however, gives priority to laying the foundations
of future growth. We see it as particularly important to use this period
of business recession to strengthen our financial position.
In line with this, we are forced to report that
net income fell short of the initial target as a result of the posting
of one-off expenses including losses on the extraordinary amortization
of property in the amount of ¥212,734 million, leading to a net
loss for the term of ¥91,388 million. These one-off expenses break
down into ¥90,400 million in expenses provisions for retirement
benefits, ¥75,183 million in extraordinary depreciation on property
such as hotels and golf courses, valuation losses of ¥22,900 million
on real estate held for sale, with the aim of housing developments,
¥9,773 million in valuation loss on investment securities, ¥7,421
million in provisions for possible loan losses on large-scale development
projects, and ¥2,145 million in losses stemming from the liquidation
of subsidiaries.
During the term under review, we took various
measures for future expansion. We carried out a reorganization of the
parent company and the group with the goal of realizing higher efficiency
in group management. At the parent company, with the primary goal of
strengthening grass-roots marketing operations for the housing business,
we introduced a new area-based management organization focused on the
individual branches. Company-wide environmental preservation initiatives
were pursued, thanks to which our 13 factories in Japan all reached
the zero-emission target for specified pollutants.
On the finance side, in a continuation from the
previous term of our policy of reducing interest-bearing debt, we succeeded
in repaying all remaining debts (amounting to ¥52,000 million) at
the non-consolidated level, thus realizing our goal of a debt-free parent
company. Against this background, we once again declared payment of
an annual dividend of ¥10 per share for the reporting term.
With the starting line marked out by the management's
definitive decision in the term under review, we have now embarked on
a program of expansion of the group's operations via the pursuit of
a number of group management themes, i.e., improved profitability, legal
and ethical compliance, struggling for the leadership in our industry,
and establishing a sound relationship with our stakeholders characterized
by strong ties of trust. We hope that our shareholders will continue
to show us the same level of support and encouragement. |
