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, 2015 and discuss our policies for the future.

During Kanamoto's interim period, Japan's economy overall traced a modest recovery trajectory as corporate earnings improved and the employment situation brightened as well, supported by a weaker yen and the continuing rise in stock prices against the backdrop of proactive economic and monetary policy measures.
In the construction industry that is Kanamoto's main customer, the pace of spending on public works projects eased somewhat on a nationwide level, even as earthquake restoration works and disaster countermeasure works in various regions have continued, because the government opted to not enact a large supplementary budget like the one implemented in the previous fiscal year. Private sector capital investment maintained its rising trend. Nevertheless, although negative aspects in the form of higher labor unit costs and a sharp rise in the cost of raw materials were manifest, and projects that need to be addressed, including reconstruction in natural disaster-stricken regions and infrastructure construction ahead of the Tokyo 2020 Olympic and Paralympic Games, continued to mount, problems were conspicuous, including projects on which ground has not yet been broken because of tender activity glitches.

During its interim period, the Kanamoto Group continued to focus on strengthening its business structure and improving its financial position for the future, while making progress on critical objectives based on the various measures in its Medium-term Corporate Management Plan "BULL53" (FY2014 - FY2016). As a result, the Group continued its momentum from the prior period and achieved higher net sales and earnings.
Because it single-handedly equips the construction sector, the supply obligation the construction equipment rental industry fulfills 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, in addition to our existing operations in mainland China, Hong Kong, and Singapore we will move forward with the establishment of new overseas affiliates and joint venture companies in Indonesia, Vietnam, Thailand and the Philippines, and actively promote business measures to secure earnings opportunities for the future.

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