Consolidated Financial Results for the Nine Months Ended December 31, 2025

(Figures are rounded down to the nearest million yen.)

1. Consolidated Financial Results for the Nine Months of the Fiscal Year Ending March 31, 2026 (From April 1, 2025 to December 31, 2025)

   1. Consolidated Results of Operations (% indicates year-on-year changes.)

      	Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent
      	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
      Nine months ended December 31, 2025	32,772	21.6	8,659	15.8	7,287	11.8	6,166	24.8
      Nine months ended December 31, 2024	26,947	-24.5	7,479	-31.7	6,520	-34.5	4,939	-35.1

      (Note) Comprehensive income:

      Nine months ended December 31, 2025: ¥13,331 million (279.7%)

      Nine months ended December 31, 2024: ¥3,510 million (-50.7%)

      	Earnings per share	Diluted earnings per share
      	Yen	Yen
      Nine months ended December 31, 2025	92.41	-
      Nine months ended December 31, 2024	72.80	-

      (Note) Heiwa Real Estate Co., Ltd. (the "Company") conducted a 2-for-1 stock split for the Company's common shares on July 1, 2025. Earnings per share was calculated assuming that the stock split was conducted at the beginning of the previous fiscal year.

   2. Consolidated Financial Position

      	Total assets	Net assets	Equity ratio	Net assets per share
      	Millions of yen	Millions of yen	%	Yen
      As of December 31, 2025	441,409	124,545	28.2	1,873.50
      As of March 31, 2025	419,541	117,999	28.1	1,767.08

      (Reference) Equity:

      As of December 31, 2025: ¥124,545 million As of March 31, 2025: ¥117,999 million

      (Note) The Company conducted a 2-for-1 stock split for the Company's common shares on July 1, 2025. Net assets per share was calculated assuming that the stock split was conducted at the beginning of the previous fiscal year.

2. Dividends

   	Annual dividends per share
   	End of 1Q	End of 2Q	End of 3Q	Year-end	Total
   	Yen	Yen	Yen	Yen	Yen
   Year ended March 31, 2025	-	63.00	-	109.00	172.00
   Year ending March 31, 2026	-	36.00	-
   Year ending March 31, 2026 (Forecast)				57.00	93.00

   (Note) Revision of most recently announced planned dividend: Yes

   For details of the revision to the planned dividend, please refer to the news release, "Notice of Revision to Full-Year Financial Results Forecast and Upward Revision to Planned Dividend," published on January 30, 2026.

   Year-end dividends paid for the fiscal year ended March 31, 2025:

   Ordinary dividend: ¥79.00 per share Special dividend: ¥30.00 per share

   Year-end dividends paid for the fiscal year ending March 31, 2026:

   Ordinary dividend: ¥42.00 per share Special dividend: ¥15.00 per share

   The Company conducted a 2-for-1 stock split for the Company's common shares on July 1, 2025. For the fiscal year ended March 31, 2025, the actual amount of dividends prior to the stock split is stated in the table above. If the stock split is not taken into account, the annual dividends per share for the fiscal year ending March 31, 2026 (forecast) would be ¥186.00.

3. Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2026 (From April 1, 2025 to March 31, 2026)

   (% indicates year-on-year changes.)

   	Net sales		Operating profit		Ordinary profit		Profit attributable to owners of parent		Earnings per share
   Full year	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
   	50,500	20.0	14,800	12.2	12,700	9.0	10,300	7.7	154.63

   (Note) Revision of most recently announced forecast of financial results: Yes

   For details of the revision to the forecast, please refer to the news release, "Notice of Revision to Full-Year Financial Results Forecast and Upward Revision to Planned Dividend," published on January 30, 2026.

   Notes:

   1. Significant changes in the scope of consolidation during the period under review: None Subsidiaries added to the scope of consolidation: None

      Subsidiaries removed from the scope of consolidation: None

      (Note) During the three months ended December 31, 2025, CANVASS1 LLC was newly established and included in the scope of consolidation; however, it does not fall into the significant changes in the scope of consolidation.

   2. Application of specific accounting treatment in the preparation of the quarterly consolidated financial statements for the period under review: Yes

      (Note) For details, please refer to the section on page 7 entitled, "Notes on specific accounting treatment used in the preparation of the quarterly

      consolidated financial statements for the period under review" under "(3) Notes to Quarterly Consolidated Financial Statements" in "2. Quarterly Consolidated Financial Statements and Notes."

   3. Changes in accounting policies, changes in accounting estimates, and corrections of errors

      1. Changes in accounting policies accompanying the revisions to items such as accounting standards: Not applicable

      2. Changes in accounting policies other than 1) above: Not applicable

      3. Changes in accounting estimates: Not applicable

      4. Corrections of errors: Not applicable

   4. Total number of issued shares (common stock)

(Note) Treasury shares include the Company's shares held in a trust account for a stock compensation plan for executive officers and managing officers of the Company and certain subsidiaries, and for a trust account for the Company's employee stock ownership plan.

The Company conducted a 2-for-1 stock split for the Company's common shares on July 1, 2025. Total number of issued shares at the end of period, total number of treasury shares at the end of period, and average number of shares during the period were calculated assuming that the stock split was conducted at the beginning of the previous fiscal year.

・Review of the attached quarterly consolidated financial statements by a certified public accountant or auditing firm: None

・Explanations for the appropriate use of the forecast of financial results and other points to note

1. Disclaimer: The forecast amounts and other forward-looking statements contained in this document are based on currently available information and certain assumptions deemed reasonable by the Company at the time of preparing this report. Accordingly, the Company offers no guarantee that such forecasts will be achieved. Actual results may differ substantially from these forecasts. For details on the Company's forecast of financial results, please refer to the supplementary information in the briefing presentation.

2. An overview of operating results was disclosed in the supplementary information for this report on January 30, 2026, on the Company's website (https://www.heiwa-net.co.jp/en/ir/ir_library/) and the Tokyo Stock Exchange's Timely Disclosure network (TDnet) website. Please refer to the information using either website.

Table of Contents

1. Overview of Operating Results

   An overview of operating results was disclosed in the supplementary information for this report on January 30, 2026, on the Company's website (https://www.heiwa-net.co.jp/en/ir/ir_library/) and the Tokyo Stock Exchange's TDnet website. Please refer to the information using either website.

2. Quarterly Consolidated Financial Statements and Notes

1. Quarterly Consolidated Balance Sheets

   		(Millions of yen)
   	As of March 31, 2025	As of December 31, 2025
   Assets
   Current assets
   Cash and deposits	19,343	16,710
   Trade accounts receivable	2,291	2,743
   Securities	5,997	4,689
   Real estate for sale	29,821	42,618
   Real estate for sale in process	32	352
   Operating investments in capital	1,173	2,231
   Other	1,376	1,781
   Allowance for doubtful accounts	(0)	(0)
   Total current assets	60,036	71,126
   Non-current assets
   Property, plant and equipment
   Buildings and structures, net	79,319	87,608
   Land	170,597	161,760
   Other, net	32,433	32,471
   Total property, plant and equipment	282,350	281,840
   Intangible assets	31,164	31,116
   Investments and other assets
   Investment securities	37,027	48,056
   Other	8,635	8,977
   Total investments and other assets	45,662	57,034
   Total non-current assets	359,177	369,990
   Deferred assets	326	292
   Total assets	419,541	441,409

   		(Millions of yen)
   As of March 31, 2025		As of December 31, 2025
   Liabilities
   Current liabilities
   Trade accounts payable	1,698	1,975
   Current portion of bonds payable	4,259	1,292
   Short-term borrowings	800	900
   Current portion of long-term borrowings	18,695	28,649
   Income taxes payable	2,560	921
   Provisions	427	243
   Other	3,964	5,465
   Total current liabilities	32,407	39,447
   Non-current liabilities
   Bonds payable	23,605	23,094
   Long-term borrowings	198,320	200,131
   Long-term non-recourse loans payable	-	3,210
   Long-term accounts payable - other	8,133	8,004
   Provisions	310	369
   Retirement benefit liability	180	179
   Asset retirement obligations	675	680
   Other	37,908	41,745
   Total non-current liabilities	269,134	277,417
   Total liabilities	301,541	316,864
   Net assets
   Shareholders' equity
   Share capital	21,492	21,492
   Capital surplus	19,720	19,720
   Retained earnings	64,580	64,672
   Treasury shares	(19,043)	(19,756)
   Total shareholders' equity	86,749	86,130
   Accumulated other comprehensive income
   Valuation difference on available-for-sale securities	15,265	22,248
   Deferred gains or losses on hedges	54	238
   Revaluation reserve for land	15,928	15,928
   Total accumulated other comprehensive income	31,249	38,414
   Total net assets	117,999	124,545
   Total liabilities and net assets	419,541	441,409

2. Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income Quarterly Consolidated Statements of Income

   		(Millions of yen)
   Nine months ended December 31, 2024		Nine months ended December 31, 2025
   Net sales	26,947	32,772
   Cost of sales	15,452	19,739
   Gross profit	11,494	13,032
   Selling, general and administrative expenses	4,014	4,373
   Operating profit	7,479	8,659
   Non-operating income
   Interest income	10	54
   Dividend income	503	606
   Other	20	15
   Total non-operating income	534	676
   Non-operating expenses
   Interest expenses	1,369	1,829
   Other	124	218
   Total non-operating expenses	1,494	2,048
   Ordinary profit	6,520	7,287
   Extraordinary income
   Gain on sale of non-current assets	-	40
   Gain on sale of investment securities	-	1,868
   Subsidy income	-	85
   Total extraordinary income	-	1,994
   Extraordinary losses
   Loss on retirement of non-current assets	11	3
   Loss on tax purpose reduction entry of non-current assets	-	85
   Total extraordinary losses	11	89
   Profit before income taxes	6,509	9,193
   Income taxes	1,570	3,027
   Profit	4,939	6,166
   Profit attributable to owners of parent	4,939	6,166

   Quarterly Consolidated Statements of Comprehensive Income

   		(Millions of yen)
   Nine months ended December 31, 2024		Nine months ended December 31, 2025
   Profit	4,939	6,166
   Other comprehensive income
   Valuation difference on available-for-sale securities	(1,456)	6,982
   Deferred gains or losses on hedges	28	183
   Total other comprehensive income	(1,428)	7,165
   Comprehensive income	3,510	13,331
   Comprehensive income attributable to
   Comprehensive income attributable to owners of parent	3,510	13,331

3. Notes to Quarterly Consolidated Financial Statements

   Notes on specific accounting treatment used in the preparation of the quarterly consolidated financial statements for the period under review

   Calculation of income taxes

   Tax-effect accounting was applied to reasonably estimate the effective tax rate on profit before income taxes in the current fiscal year, including the three-month period under review. The amount of profit before income taxes is multiplied by the estimated effective tax rate to calculate the amount of income taxes.

   Notes on segment information, etc.

   1. Results for the nine-month period from April 1, 2024 to December 31, 2024

      1. Information on net sales and profit/loss by reportable segment

         (Millions of yen)
         	Reportable segments			Adjustments (Note 1)	Amount in quarterly consolidated financial statements (Note 2)
         	Building Business	Asset Management Business	Total
         Net sales
         Net sales from external customers	24,441	2,505	26,947	-	26,947
         Intersegment sales and transfers	37	-	37	(37)	-
         Total	24,479	2,505	26,985	(37)	26,947
         Segment profit	7,677	1,346	9,023	(1,544)	7,479

         (Notes) 1. The negative adjustments to segment profit of ¥1,544 million mainly include corporate expenses amounting to

         ¥1,544 million that belong to the administration division and are not allocated to any of the reportable segments.

      2. Segment profit is adjusted with operating profit in the quarterly consolidated statements of income.

         2. Information on impairment losses of non-current assets, goodwill, and other items by reportable segment

         No events that could have a significant impact on impairment loss recognition or goodwill amounts occurred during the period under review.

   2. Results for the nine-month period from April 1, 2025 to December 31, 2025

      1. Information on net sales and profit/loss by reportable segment

         (Millions of yen)
         	Reportable segments			Adjustments (Note 1)	Amount in quarterly consolidated financial statements (Note 2)
         	Building Business	Asset Management Business	Total
         Net sales
         Net sales from external customers	29,788	2,983	32,772	-	32,772
         Intersegment sales and transfers	37	-	37	(37)	-
         Total	29,826	2,983	32,810	(37)	32,772
         Segment profit	8,549	1,713	10,262	(1,602)	8,659

         (Notes) 1. The negative adjustments to segment profit of ¥1,602 million mainly include corporate expenses amounting to

         ¥1,602 million that belong to the administration division and are not allocated to any of the reportable segments.

      2. Segment profit is adjusted with operating profit in the quarterly consolidated statements of income.

2. Information on impairment losses of non-current assets, goodwill, and other items by reportable segment

No events that could have a significant impact on impairment loss recognition or goodwill amounts occurred during the period under review.

Notes in case of significant changes in shareholders' equity Not applicable.

Notes on going concern assumption Not applicable.

Notes on quarterly consolidated statements of cash flows

Quarterly consolidated statements of cash flows have not been prepared for the nine months ended December 31, 2024. Amounts for depreciation (including intangible fixed asset-related amortization costs excluded from goodwill) and amortization of goodwill during the period are as follows.

Notes on significant subsequent events Repurchase and Cancellation of Own Shares

The Company decided at its Board of Directors meeting held on January 30, 2026 to have the Company conduct a share repurchase in compliance with Article 156 of the Companies Act of Japan, as applied pursuant to Paragraph 3 of Article 165 of the act. The Company also decided on the cancellation of the repurchased shares in compliance with Article 178 of the act.

1. Reason for the share repurchase and cancellation

   The Company will purchase its own shares in order to strengthen capital policy and shareholder returns. As a basic policy, the Company sets the maximum number of treasury shares held at approximately 5% of all shares issued and cancels those shares in excess of this level.

2. Details of the share repurchase

   (1)	Type of shares to be acquired	Common shares
   (2)	Number of shares to be acquired	Up to 500,000 shares (equivalent to 0.75% of all shares issued, excluding treasury shares)
   (3)	Value of shares to be acquired	Up to ¥1,000 million
   (4)	Date of acquisition	February 2, 2026-March 31, 2026
   (5)	Share acquisition method	Market purchases on the Tokyo Stock Exchange

3. Details of the share cancellation