Condo delay hurts sales at top developers

Kyodo

Sales at some of Japan’s five major real estate companies shrank in the nine months to Dec. 31 from a year earlier because the March 11 earthquake delayed the completion of condominiums, according to earnings results released by Thursday.

Sumitomo Realty & Development Co. said its sales in the April-December period dived 12.9 percent to ¥497.5 billion, after it voluntarily placed curbs on its real estate marketing activities in the aftermath of the Great East Japan Earthquake.

Mitsui Fudosan Co. said its consolidated sales in the period contracted 9.8 percent to ¥890.8 billion due to a drop in the number of condos delivered to buyers.

Tokyu Land Corp. posted a 4.7 percent fall in sales to ¥364.2 billion after converting a special-purpose company into a subsidiary.

But Nomura Real Estate Holdings said its sales rose 7.5 percent to ¥261.8 billion, as the negative effects of quake-induced delays in completing condominium buildings were smaller than anticipated.

Mitsubishi Estate Co. also saw its sales increase 4.1 percent to ¥672.0 billion due partly to sales of some of its building holdings.

Group net profits at Sumitomo Realty & Development and Mitsui Fudosan fell due to a partial reversal of the companies’ deferred tax assets, in line with a revision to the tax system.

For the whole financial year to March 31, Sumitomo Realty & Development revised its sales projection downward by ¥30 billion, forecasting that the number of condos sold will be less than earlier anticipated.

But Mitsubishi Estate revised upward its sales projection for the same 12-month period by ¥33 billion, citing higher condo sales through the year than it had previously projected.

Mac-record profit

McDonald’s Holdings Co. (Japan) Ltd. on Thursday posted a record group operating profit of ¥28.18 billion for the business year to Dec. 31, up 0.2 percent from the previous year, after reorganizing its operations and cutting costs.

The operating profit set a record high since the hamburger chain operator went public in 2001. The group also said net profit rose 69.1 percent to ¥13.30 billion on sales of ¥302.34 billion, down 6.6 percent. The decrease was partly attributable to the closing of unprofitable outlets.

For its current business year that began in January, McDonald’s Holdings expects to post a group net profit of ¥16 billion, up 20.3 percent, on projected sales of ¥305 billion, up 0.9 percent.

The company said it has been releasing new products such as the Big America series, adding large-scale drive-throughs to existing outlets, expanding kitchen capacity and changing outlet interiors to its “global” design.