full Annual Report 2003(5.9

Real Estate Operations
•Revenues
Year ended Year ended
March 31, 2003 March 31, 2002
(Millions of Yen)
Development projects in Japan ¥ 95,853 ¥ 88,251
Development projects overseas 88,985 66,760
(The Company) 576 576
(Overseas subsidiaries) 88,409 66,184
Real estate development total ¥184,838 ¥155,011
Buoyed by higher revenues in the United States, consolidated revenues
from real estate operations advanced to ¥184.8 billion, up
19.2% from last year, with consolidated operating income of ¥14.1
billion, up 19.4%.
Others
Other segments, consisting mainly of processed construction materials
and design, engineering and property management services,
reported consolidated revenues of ¥135.2 billion (down 7.5% from
the previous year) and consolidated operating income of ¥2.7 billion
(up 43.7%).
Forecast of Business Performance for Fiscal 2004
In Japan, we see no sign of deflation ending, and little reason to
expect strength in job markets, personal consumption or housing
starts over the short term. Slumps in demand and capital investment
will leave the economy confined to a sub-par growth mode.
We recognize signs of domestic construction markets shrinking
steadily. Fiscal retrenchment keeps governments in Japan under
pressure to cut back on public works orders. Private-sector demand
faces structural adjustments as manufacturing companies opt to
move abroad.
Globally, while conditions vary from region to region, cyclical weaknesses
persist in the major markets of Europe and North America.
Based on the above perspective, we forecast our consolidated performance
for year ending March 31, 2004 as follows:
Year ended Year ended
March 31, 2004 March 31, 2003
(forecast)
(Millions of Yen)
Revenues ¥1,700,000 ¥1,874,802
Operating income 45,000 36,298
Net income (loss) (5,000) 10,111
We look for consolidated revenues to edge downward to ¥1,700 billion.
However, on-site construction cost reduction along with a paring
of selling, general and administrative expenses puts projected consolidated
operating income at ¥45 billion, up 24% from this year.
A major effort is under way to revamp the Company’s retirement benefits
plan whereby the existing employees’ pension fund will be dissolved,
and a new defined-contribution plan adopted. As this will
involve taking a loss of approximately ¥40 billion, our forecast for consolidated
net loss for the year is ¥5 billion.
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