Message from the President

I am pleased to have this opportunity to report on the activities of Kanamoto and the Kanamoto Group during the first half of the Business Period ending October 31, 2013 and discuss our policies for the future.

During Kanamoto's interim period, Japan's economy exhibited a gradual recovery trend. Since the change of administration at the end of 2012, there has been progress in reversing the appreciation of the yen, the stock market is enjoying renewed vigor and even consumer confidence has improved thanks to the Abe administration's "three arrows," and the economic prospects are looking brighter.
Given this environment Kanamoto's leading customer - the construction industry - is benefitting from factors such as the supplementary budget as well, and for the first time in many years is exhibiting brisk activity.
To respond to the vigorous construction demand, the Kanamoto Group also aggressively stepped up capital investment, supplying large quantities of materials and equipment on a timely basis to meet local construction site needs.
As a result, revenues and earnings at nearly every domestic business unit were higher than Kanamoto's plan values. Consequently we revised our full-year earnings projections sharply upward.
Because the construction equipment rental industry single-handedly equips the construction sector, the supply obligation we must fulfill is vitally significant, and we will continue to perform our activities in the future with an awareness of their importance as a critical component of Japan's social infrastructure.

In our overseas operations, which we have positioned as an engine for medium to long-term growth, we will continue to concentrate on the expansion of Kanamoto's business in China and Singapore, and seek to expand earnings by working to reliably attract vigorous demand in mainland China, Hong Kong, and Singapore.

We look forward to continuing to receive your unwavering support and encouragement for the Kanamoto Group in the future.

Kanchu Kanamoto, President and Chief Executive Officer