SYLA Reports Full Year 2023 Financial and Operational Results

53.66% and 141.14% Increase in Gross Profit and Net Income from Continuing Operations for Full Year 2023 Compared to Full Year 2022, Respectively
Rimawari-kun Members Reached 279,029 as of December 31, 2023, a 17.7% Increase from 2022
Rimawari-kun Platform Gross Merchandise Value Surpasses 5 Billion Yen as of December 31, 2023  

TOKYO, May 16, 2024 (GLOBE NEWSWIRE) — SYLA Technologies Co., Ltd. (NASDAQ: SYT) (“SYLA” or “the Company”), operator of the largest membership real estate crowd-funding platform in Japan, Rimawari-kun, reported its financial results for the full year ended December 31, 2023.

Full Year 2023 Operational Highlights:

  • Awarded the Excellent business Award for ZEH-M Oriented Certification and Integration of Energy-Saving Technology for its SYFORME MOTOMACHI-CHUKAGAI brand condominium
  • Sold the SYFORME SUMIYOSHI II brand condominium
  • Announced gain on sales of investment securities, resulting in a profit of 96 million yen
  • As of May 8, 2024, ietty membership surpassed 400,000, a 100,000 increase in membership since March 2024
  • Subsidiary SYLA Solar announced issuance of series 1 unsecured bonds of ¥50 million and announced comprehensive business alliance with LIVE THE CREATIVE Inc.
  • Announced growth strategy centered on mergers and acquisitions
  • Announced FY2024 financial guidance and upward revision of FY2023 year-end dividend to ¥180 Per Share
  • Entered into capital and business alliance and became largest shareholder of RIBERESUTE CORPORATION
  • Sold four SYFORME brand condominiums to a private fund managed by BlackRock’s real estate business
  • Rimawari-kun platform gross merchandise value surpasses ¥5 billion
  • Announced business collaboration with a private fund managed by BlackRock’s real estate business
  • Announced definitive agreement for a business transfer from ietty, Inc.
  • Began the sale of SYFORME NAKANO condominium units for investors
  • Initiated Employee Stock Purchase Plan
  • Sold a condominium development site in Shimo-Meguro, Tokyo
  • Announced Interim Dividend of ¥70 Per Share
  • Authorized ¥200.0 Million ($1,385,000) ADS Repurchase Program
  • Rimawari-kun ranked as the top real estate crowdfunding platform in Japan for two consecutive years

Management Commentary
“This past year was a pivotal one full of advancement for SYLA across our various business sectors,” said Chairman, Founder, and CEO Hiroyuki Sugimoto. “We achieved record highs in our real estate development and sales, real estate crowdfunding, asset management, solar power businesses, and we achieved significant increases in both gross profit and net income.”

“Throughout the latter half of the year, the company strategically pursued acquisitions to bolster our real estate development and sales, and crowdfunding businesses. The acquisition of ietty, becoming the largest shareholder and forming a strategic business alliance with RIBERESUTE, and the supply of properties to BlackRock are all strategic moves that have positioned SYLA for significant growth in 2024 and beyond. The favorable Japanese macroeconomic environment, characterized by low interest rate policies, increased inbound investments, and population growth in the central Tokyo area are all factors that position our top-line growth.”

“Looking ahead, I would like to reiterate and emphasize our growth strategy centered around M&A. The successes of the past year on this front have strengthened our confidence in maximizing the potential of ventures that have synergies with our company. We anticipate reasonable, short-term integration costs which we believe will yield substantial returns for our shareholders in the medium to long-term. With a robust balance sheet and ample cash reserves, we are well positioned to explore and execute on this initiative.”

Full Year 2023 Financial Results:
Results compare the full year ended December 31, 2023, to the full year ended December 31, 2022, unless otherwise indicated. Results below are for SYLA Technologies Co., Ltd. on a consolidated basis.

  • Revenues increased 3.12% to ¥22,743,410 thousand (US $161.4 million) for the year ended December 31, 2023 from ¥22,055,785 thousand for the year ended December 31, 2022. The increase was mainly attributable to an increase in land sales due to a sale of large development sites, offset by a decrease in total real estate sales due to the number of units sold decreased from 588 units in full year 2022 to 446 units in full year 2023.
  • Gross profit increased 53.66% to ¥5,537,444 thousand (US $39.3 million) for the year ended December 31, 2023 from ¥3,603,816 thousand for the year ended December 31, 2022. The increase was mainly attributable to high-margin transactions, such as the sale of land for large-scale development and the sale of one building for sale.
  • Total operating expenses increased to ¥4,096,346 thousand (US $29.1 million) for the year ended December 31, 2023 from ¥2,825,104 thousand for the year ended December 31, 2022. The increase was mainly attributable to an increase in legal and professional expenses due to increase in IPO-related costs such as share-based payment costs and legal fees due to listing on the NASDAQ market, and an increase in salaries and welfare expenses due to increase in personnel for management system development, etc.
  • Net income from continuing operations increased by 141.14% to ¥749,361 thousand (US $5.3 million) for the year ended December 31, 2023 from ¥310,761 thousand for the year ended December 31, 2022. The increase was mainly attributable to the significant increase in gross profit.
  • As of December 31, 2023, SYLA Technologies Co., Ltd. had ¥4,017,311, thousand (US $28.5 million) cash and cash equivalents.
  • Total net assets increased to ¥40,084,427 thousand ($285 million) as of December 31, 2023 from ¥29,792,974 thousand ($211 million) as of December 31, 2022.

*(Conversion rate: ¥140.92 = US$1.00)

Fiscal Year 2024 Guidance

SYLA is providing the following guidance for fiscal year 2024:

  Low (JPY) High (JPY)
Fiscal Year 2024 Revenue 27.5 billion yen           30.0 billion yen
Fiscal Year 2024 Income from Continuing Operations             750 million yen             1.10 billion yen


About SYLA Technologies Co., Ltd.

Headquartered in Tokyo, Japan, SYLA Technologies Co., Ltd. (NASDAQ: SYT) (“SYLA” or “the Company”) owns and operates the largest membership real estate crowd-funding platform in Japan, Rimawari-kun, which targets individuals, corporate and institutional investors, as well as high net worth individuals. SYLA’s mission is to democratize real estate investment around the world through technology and asset management through the Rimawari-kun platform. SYLA is engaged in the overall investment condominium business, including planning, development, construction, sales, rental management, building management, repair work, and the sale of properties. Additional information about the Company’s products and services is available at https://syla-tech.jp/en.

Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act and other securities laws. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions or variations of such words are intended to identify forward-looking statements. For example, the Company is using forward-looking statements when it discusses the expected gross proceeds and the closing of the offering. Forward-looking statements are not historical facts, and are based upon management’s current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. Such expectations, beliefs and projections are expressed in good faith. However, there can be no assurance that management’s expectations, beliefs and projections will be achieved, and actual results may differ materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements. For a more detailed description of the risks and uncertainties affecting the Company, reference is made to the Company’s reports filed from time to time with the Securities and Exchange Commission (“SEC”), including, but not limited to, the risks detailed in the Company’s annual report on Form 20-F, filed with the SEC on April 18, 2023. Forward-looking statements speak only as of the date the statements are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances, changes in assumptions or changes in other factors affecting forward-looking information except to the extent required by applicable securities laws. If the Company does update one or more forward-looking statements, no inference should be drawn that the Company will make additional updates with respect thereto or with respect to other forward-looking statements. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release.

Contact Information

SYLA Technologies Investor Relations Contact:
Gateway Group, Inc.
John Yi and Steven Shinmachi
[email protected]
(949) 574-3860

SYLA Technologies Company Contact
Takeshi Fuchiwaki
Director, Chief Growth Officer
[email protected]

   
SYLA TECHNOLOGIES CO., LTD.  
CONSOLIDATED BALANCE SHEETS  
(Amounts in thousands of Japanese Yen (“JPY”), except for share data)  
   
           
  As of December 31,  
  2023     2022  
           
ASSETS              
Current assets              
Cash and cash equivalents   4,017,311       2,542,795  
Restricted cash   569,469       168,630  
Term deposits   233,505       160,089  
Short-term investments   89,482        
Accounts receivable, net   162,690       67,776  
Inventories   16,849,935       10,517,193  
Prepaid expenses, net   357,104       647,534  
Other current assets, net   304,271       185,350  
Current assets of discontinued operations         10,600  
Total current assets   22,583,767       14,299,967  
               
Non-current assets              
Restricted cash, non-current   25,180       76,578  
Long-term deposits   9,300       30,511  
Long-term investments, net   490,437       413,805  
Property, plant and equipment, net   11,889,701       10,231,057  
Solar power systems, net   476,778       361,422  
Intangible assets, net   133,226       194,361  
Goodwill   730,776       727,701  
Operating lease right-of-use assets   2,409,255       2,597,500  
Finance lease right-of-use assets   11,980       11,396  
Other assets, net   1,324,027       848,676  
Total non-current assets   17,500,660       15,493,007  
               
TOTAL ASSETS   40,084,427       29,792,974  
               
LIABILITIES AND EQUITY              
Current liabilities              
Accounts payable   559,420       419,058  
Accrued liabilities   277,425       159,533  
Short-term loans   1,692,599       697,179  
Current portion of long-term loans   7,243,022       1,030,850  
Current portion of long-term bonds   107,601       126,525  
Deferred revenue   165,262       228,426  
Income tax payables   466,872       431,418  
Operating lease liabilities, current   433,725       427,856  
Finance lease liabilities, current   4,158       4,821  
Other current liabilities   1,047,016       1,603,498  
Current liabilities of discontinued operations         3,308  
Total current liabilities   11,997,100       5,132,472  
               
Non-current liabilities              
Long-term loans   14,308,136       15,257,106  
Long-term bonds   97,549       205,769  
Operating lease liabilities, non-current   1,958,689       2,175,786  
Finance lease liabilities, non-current   8,040       6,795  
Other liabilities   534,228       448,356  
Total non-current liabilities   16,906,642       18,093,812  
               
TOTAL LIABILITIES   28,903,742       23,226,284  
               
EQUITY              
Capital stock (900,000 shares authorized, 260,891 and 239,489 shares issued and outstanding as of December 31, 2023 and 2022, respectively, with no stated value)   100,000       161,580  
Capital surplus   4,988,126       2,987,795  
Treasury stock, at cost (142 and nil shares as of December 31, 2023 and 2022, respectively)   (13,631 )      
Retained earnings   3,413,644       2,767,001  
Total SYLA Technologies Co., Ltd.’s equity   8,488,139       5,916,376  
Noncontrolling interests   2,692,546       650,314  
TOTAL EQUITY   11,180,685       6,566,690  
TOTAL LIABILITIES AND EQUITY   40,084,427       29,792,974  
 
SYLA TECHNOLOGIES CO., LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Amounts in thousands of JPY, except for share and per share data)
                   
    For the Years Ended December 31,  
    2023     2022     2021  
                   
Revenues, net     22,743,410       22,055,785       16,665,382  
Cost of revenues     (17,205,966 )     (18,451,969 )     (13,516,293 )
Gross profit     5,537,444       3,603,816       3,149,089  
Operating expenses                        
Selling, general and administrative expenses     (4,096,346 )     (2,825,104 )     (2,466,731 )
Total operating expenses     (4,096,346 )     (2,825,104 )     (2,466,731 )
                         
Income from continuing operations     1,441,098       778,712       682,358  
                         
Other income (expenses)                        
Other income     146,787       201,954       43,951  
Income (loss) from equity method investments     (1,689 )     (748 )     109  
Other expenses     (570,856 )     (323,977 )     (226,346 )
Total other expenses     (425,758 )     (122,771 )     (182,286 )
Income from continuing operations before income taxes     1,015,340       655,941       500,072  
Income tax expense     (265,979 )     (345,180 )     (221,384 )
Net income from continuing operations     749,361       310,761       278,688  
Income (loss) from discontinued operations, net of income taxes     (6,742 )     78,628        
Net income     742,619       389,389       278,688  
Net income from continuing operations attributable to noncontrolling interests     61,187       4,329       1,199  
Net loss from discontinued operations attributable to noncontrolling interests           (9,895 )      
Less: net income (loss) attributable to noncontrolling interests     61,187       (5,566 )     1,199  
Net income attributable to SYLA Technologies Co., Ltd.     681,432       394,955       277,489  
                         
Net income from continuing operations per share                        
– Basic     2,698.42       1,280.25       1,201.09  
– Diluted     2,263.36       1,081.45       1,022.40  
                         
Income (loss) from discontinued operations per share                        
– Basic     (26.44 )     369.84        
– Diluted     (22.17 )     312.41        
                         
Net income attributable to SYLA Technologies Co., Ltd. per share                        
– Basic     2,671.99       1,650.09       1,201.09  
– Diluted     2,241.19       1,393.86       1,022.40  
                         
Weighted average shares used in calculating basic and diluted net income per share                        
– Basic     255,028       239,353       231,031  
– Diluted     304,049       283,354       271,409  
                         
Comprehensive income                        
Net income     742,619       389,389       278,688  
Other comprehensive income, net of tax                        
Reclassification of unrealized loss on available-for-sale debt securities to net income when realized, net of tax effect of nil, nil, and 175 for the years ended December 31, 2023, 2022 and 2021, respectively                 396  
Other comprehensive income, net of tax                 396  
Comprehensive income     742,619       389,389       279,084  
Comprehensive income (loss) attributable to noncontrolling interests     61,187       (5,566 )     1,199  
Comprehensive income attributable to SYLA Technologies Co., Ltd.     681,432       394,955       277,885  


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