Consolidated Financial Results for the Six Months Ended September 30, 2025

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

1. Consolidated Financial Results for the Six Months of the Fiscal Year Ending March 31, 2026 (From April 1, 2025 to September 30, 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	%
      Six months ended September 30, 2025	21,820	16.3	5,766	9.8	4,831	5.5	4,347	26.7
      Six months ended September 30, 2024	18,761	-33.4	5,254	-43.2	4,581	-46.6	3,431	-48.5

      (Note) Comprehensive income:

      Six months ended September 30, 2025: ¥8,932 million (306.7%)

      Six months ended September 30, 2024: ¥2,196 million (-69.1%)

      	Earnings per share	Diluted earnings per share
      	Yen	Yen
      Six months ended September 30, 2025	65.09	-
      Six months ended September 30, 2024	50.18	-

      (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 September 30, 2025	432,377	123,313	28.5	1,845.94
      As of March 31, 2025	419,541	117,999	28.1	1,767.08

      (Reference) Equity:

      As of September 30, 2025: ¥123,313 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
   Year ended March 31, 2025	Yen	Yen	Yen	Yen	Yen
   	-	63.00	-	109.00	172.00

   	Annual dividends per share
   	End of 1Q	End of 2Q	End of 3Q	Year-end	Total
   Year ending March 31, 2026	-	36.00
   Year ending March 31, 2026 (Forecast)			-	52.00	88.00

   (Note) Revision of most recently announced planned dividend: None 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: ¥37.00 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 ¥176.00.

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
   	49,000	16.5	13,900	5.3	11,700	0.4	9,700	1.4	145.22

   (Note) Revision of most recently announced forecast of financial results: None

   The Company conducted a 2-for-1 stock split for the Company's common shares on July 1, 2025. Earnings per share in the forecast of consolidated financial results for the fiscal year ending March 31, 2026, take into account the impact of the stock split.

   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

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

      (Note) For details, please refer to the section on page 9 entitled, "Notes on specific accounting treatment used in the preparation of the interim

      consolidated financial statements for the period under review" under "(4) Notes to Interim Consolidated Financial Statements" in "2. Interim 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.

• This report of interim financial results was not subject to a review by certified public accountants or an auditing firm.

  ・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 October 31, 2025, 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 October 31, 2025, 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. Interim Consolidated Financial Statements and Notes

1. Interim Consolidated Balance Sheets

   		(Millions of yen)
   	As of March 31, 2025	As of September 30, 2025
   Assets
   Current assets
   Cash and deposits	19,343	18,313
   Trade accounts receivable	2,291	2,120
   Securities	5,997	2,190
   Real estate for sale	29,821	29,196
   Real estate for sale in process	32	244
   Operating investments in capital	1,173	2,055
   Other	1,376	1,856
   Allowance for doubtful accounts	(0)	(0)
   Total current assets	60,036	55,978
   Non-current assets
   Property, plant and equipment
   Buildings and structures, net	79,319	89,433
   Land	170,597	170,978
   Other, net	32,433	31,318
   Total property, plant and equipment	282,350	291,730
   Intangible assets	31,164	31,131
   Investments and other assets
   Investment securities	37,027	44,418
   Other	8,635	8,816
   Total investments and other assets	45,662	53,235
   Total non-current assets	359,177	376,097
   Deferred assets	326	301
   Total assets	419,541	432,377

   		(Millions of yen)
   As of March 31, 2025		As of September 30, 2025
   Liabilities
   Current liabilities
   Trade accounts payable	1,698	2,805
   Current portion of bonds payable	4,259	1,292
   Short-term borrowings	800	900
   Current portion of long-term borrowings	18,695	25,612
   Income taxes payable	2,560	2,322
   Provisions	427	308
   Other	3,964	3,877
   Total current liabilities	32,407	37,118
   Non-current liabilities
   Bonds payable	23,605	23,248
   Long-term borrowings	198,320	199,100
   Long-term accounts payable - other	8,133	8,004
   Provisions	310	314
   Retirement benefit liability	180	186
   Asset retirement obligations	675	679
   Other	37,908	40,412
   Total non-current liabilities	269,134	271,945
   Total liabilities	301,541	309,064
   Net assets
   Shareholders' equity
   Share capital	21,492	21,492
   Capital surplus	19,720	19,720
   Retained earnings	64,580	65,270
   Treasury shares	(19,043)	(19,004)
   Total shareholders' equity	86,749	87,478
   Accumulated other comprehensive income
   Valuation difference on available-for-sale securities	15,265	19,766
   Deferred gains or losses on hedges	54	139
   Revaluation reserve for land	15,928	15,928
   Total accumulated other comprehensive income	31,249	35,834
   Total net assets	117,999	123,313
   Total liabilities and net assets	419,541	432,377

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

   		(Millions of yen)
   	Six months ended September 30, 2024	Six months ended September 30, 2025
   Net sales	18,761	21,820
   Cost of sales	10,854	13,194
   Gross profit	7,907	8,626
   Selling, general and administrative expenses	2,653	2,859
   Operating profit	5,254	5,766
   Non-operating income
   Interest income	8	36
   Dividend income	287	364
   Other	18	13
   Total non-operating income	314	414
   Non-operating expenses
   Interest expenses	898	1,203
   Other	88	145
   Total non-operating expenses	986	1,349
   Ordinary profit	4,581	4,831
   Extraordinary income
   Gain on sale of non-current assets	-	40
   Gain on sale of investment securities	-	1,724
   Total extraordinary income	-	1,764
   Extraordinary losses
   Loss on retirement of non-current assets	8	2
   Total extraordinary losses	8	2
   Profit before income taxes	4,573	6,593
   Income taxes	1,141	2,245
   Profit	3,431	4,347
   Profit attributable to owners of parent	3,431	4,347

   Interim Consolidated Statements of Comprehensive Income

   		(Millions of yen)
   Six months ended September 30, 2024		Six months ended September 30, 2025
   Profit	3,431	4,347
   Other comprehensive income
   Valuation difference on available-for-sale securities	(1,248)	4,500
   Deferred gains or losses on hedges	13	84
   Total other comprehensive income	(1,235)	4,585
   Comprehensive income	2,196	8,932
   Comprehensive income attributable to
   Comprehensive income attributable to owners of parent	2,196	8,932

3. Interim Consolidated Statements of Cash Flows

   		(Millions of yen)
   Six months ended September 30, 2024		Six months ended September 30, 2025
   Cash flows from operating activities
   Profit before income taxes	4,573	6,593
   Depreciation	2,829	2,782
   Loss on retirement of non-current assets	8	2
   Amortization of goodwill	21	21
   Increase (decrease) in allowance for doubtful accounts	(0)	(0)
   Increase (decrease) in provision for bonuses	(68)	(60)
   Increase (decrease) in retirement benefit liability	49	5
   Interest and dividend income	(296)	(400)
   Interest expenses	898	1,203
   Amortization of bond issuance costs	27	23
   Loss (gain) on sale of investment securities	-	(1,724)
   Loss (gain) on sale of non-current assets	-	(40)
   Decrease (increase) in trade receivables	2	170
   Decrease (increase) in inventories	1,955	413
   Decrease (increase) in operating investments in capital	7	(882)
   Decrease (increase) in prepaid expenses	(62)	(112)
   Decrease (increase) in accounts receivable - other	(370)	(399)
   Increase (decrease) in trade payables	(551)	(52)
   Increase (decrease) in advances received	1,907	119
   Increase (decrease) in accrued consumption taxes	(1,578)	(49)
   Increase (decrease) in deposits received	1	(29)
   Increase (decrease) in leasehold and guarantee deposits received	(398)	435
   Other,net	1,088	246
   Subtotal	10,043	8,264
   Interest and dividends received	297	402
   Interest paid	(904)	(1,209)
   Income taxes paid	(1,558)	(2,489)
   Net cash provided by (used in) operating activities	7,878	4,968

   		(Millions of yen)
   Six months ended September 30, 2024		Six months ended September 30, 2025
   Cash flows from investing activities
   Purchase of securities	-	(2,000)
   Proceeds from sale and redemption of securities	2,005	-
   Purchase of investment securities	(769)	(1,892)
   Proceeds from sale and redemption of investment securities	11	2,605
   Purchase of property, plant and equipment	(5,197)	(11,141)
   Proceeds from sale of property, plant and equipment	-	46
   Purchase of intangible assets	(34)	(21)
   Purchase of long-term prepaid expenses	(40)	(96)
   Payments of guarantee deposits	(183)	(403)
   Proceeds from refund of guarantee deposits	75	207
   Other,net	0	2
   Net cash provided by (used in) investing activities	(4,131)	(12,693)
   Cash flows from financing activities
   Net increase (decrease) in short-term borrowings	900	100
   Proceeds from long-term borrowings	5,630	14,650
   Repayments of long-term borrowings	(7,005)	(6,953)
   Redemption of bonds	(2,099)	(3,324)
   Repayments of long-term accounts payable	(129)	(129)
   Purchase of treasury shares	(9,053)	(5)
   Dividends paid	(3,866)	(3,641)
   Other,net	0	0
   Net cash provided by (used in) financing activities	(15,623)	696
   Effect of exchange rate change on cash and cash equivalents	-	-
   Net increase (decrease) in cash and cash equivalents	(11,876)	(7,027)
   Cash and cash equivalents at beginning of period	26,316	25,241
   Cash and cash equivalents at end of period	14,439	18,213

4. Notes to Interim Consolidated Financial Statements

   Notes on specific accounting treatment used in the preparation of the interim 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 six-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. Segment information

   1. Results for the six-month period from April 1, 2024 to September 30, 2024

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

         (Millions of yen)
         	Reportable segments			Adjustments (Note 1)	Amount in interim consolidated financial statements (Note 2)
         	Building Business	Asset Management Business	Total
         Net sales
         Net sales from external customers	17,007	1,753	18,761	-	18,761
         Intersegment sales and transfers	24	-	24	(24)	-
         Total	17,032	1,753	18,786	(24)	18,761
         Segment profit	5,293	1,016	6,310	(1,056)	5,254

         (Notes) 1. The negative adjustments to segment profit of ¥1,056 million mainly include corporate expenses amounting to

         ¥1,056 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 interim 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 six-month period from April 1, 2025 to September 30, 2025

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

         (Millions of yen)
         	Reportable segments			Adjustments (Note 1)	Amount in interim consolidated financial statements (Note 2)
         	Building Business	Asset Management Business	Total
         Net sales
         Net sales from external customers	19,733	2,087	21,820	-	21,820
         Intersegment sales and transfers	24	-	24	(24)	-
         Total	19,757	2,087	21,844	(24)	21,820
         Segment profit	5,597	1,276	6,874	(1,107)	5,766

         (Notes) 1. The negative adjustments to segment profit of ¥1,107 million mainly include corporate expenses amounting to

         ¥1,107 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 interim 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.