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Report of Operating Results and Financial Position for the Six Months ended April 30, 2018
[Management Environment]
During the first two quarters of Kanamoto's current consolidated fiscal year, the business environment maintained its modest recovery trend despite uncertainty surrounding the overseas economy and heightened geopolitical risks.
In the construction industry related to the Kanamoto Group, construction demand continued to be supported by public works projects, as well as by steady corporate capital investment, modestly increasing demand driven by redevelopment projects concentrated in the Tokyo metropolitan area, and works related to the 2020 Tokyo Olympics, and remained brisk.
Given these conditions, the Kanamoto Group's consolidated net sales for the interim period were ¥85,349 million, up 7.8% compared with the same period of the previous consolidated fiscal year. From an earnings perspective, operating profit rose 10.0% from the same period of the previous consolidated fiscal year to ¥10,994 million, ordinary profit increased 8.9% year-on-year to ¥11,155 million, and interim period profit attributable to owners of parent rose 4.1% year-on-year to ¥6,735 million.
[Segment Information]
Business related to the Construction Equipment Rental Division
In the construction-related business that is Kanamoto's primary business focus, the Company pursued development of branches in the Tokyo metropolitan area and in regions of western Japan where it has not had a strong presence, in accordance with its medium and long-term plans. At the same time, the Company moved to bolster measures in business domains where it can take advantage of its strengths as a group, such as broadening its line-up of equipment for tunnel-related works, and worked to broaden its operating base.
The Company also continued to maintain its support system for disaster recovery and restoration activities, and proactively repositioned its assets to further improve the utilization rates of existing rental equipment.
Sales of used construction equipment, which the Company is undertaking systematically, remained robust against the backdrop of a favorable market environment.
As a result of the above factors, interim period net sales for Kanamoto's construction-related businesses increased 6.5% from the same period of the previous consolidated fiscal year to ¥76,782 million, and operating profit improved 11.8% year-on-year to ¥10,355 million.
Other Businesses
In the Company's other businesses, net sales were up 20.5% compared with the interim period of the previous consolidated fiscal year to ¥8,567 million because of steady demand in Kanamoto's steel products-related, information and telecommunications-related, and welfare-related businesses. Operating profit from these operations slipped 16.7% to ¥444 million, however, reflecting a decline in net sales from steel-related works.
Consolidated Operating Results
| (Millions of yen; % change from prior year) | Fiscal Year Ended October 31, 2017: Second Quarter |
Fiscal Year Ending October 31, 2018: Second Quarter |
|---|---|---|
| Net Sales | 79,210（15.4） | 85,349（7.8） |
| Operating Income | 9,993（16.1） | 10,994（10.0） |
| Ordinary Income | 10,242（24.2） | 11,155（8.9） |
| Profit attributable to owners of parent | 6,468（30.2） | 6,735（4.1） |
| Basic earnings per share | ¥183.03 | ¥190.59 |
Divisional Sales (Consolidated)
| (Millions of yen; % change from prior year) | Fiscal Year Ended October 31, 2017: Second Quarter |
Fiscal Year Ending October 31, 2018: Second Quarter |
|---|---|---|
| Construction Equipment Rental Business | 72,099（12.1） | 76,782（6.5） |
| Other Businesses | 7,110（64.2） | 8,567（20.5） |
| Total | 79,210（15.4） | 85,349（7.8） |
Projected Consolidated Operating Results for the Fiscal Year Ending October 2018
| (Millions of yen; % change from prior year) | Consolidated full-year projection |
|---|---|
| Net Sales | 161,870（2.2） |
| Operating income | 17,330（4.0） |
| Ordinary income | 17,420（1.3） |
| Profit attributable to owners of parent | 10,900（1.4） |
| Basic earnings per share | ¥308.44 |