Nine-month Consolidated Financial Report for the Fiscal Year ending
October 31, 2017 [Japan GAAP]
September 8, 2017
Listed Company Name
Company Code Number

Kanamoto Co., Ltd.
9678

Listing Exchanges

Tokyo Stock Exchange, Sapporo Stock Exchange

URL
Representative

http://www.kanamoto.co.jp
Tetsuo Kanamoto
President and CEO

Inquiries

Nobuhito Utatsu

Director & Senior Executive Corporate Officer, Division
Manager, Accounting Division

TEL 81-11-209-1600
Please send inquiries in English to takayama@kanamoto.co.jp
Scheduled date for submission of Quarterly Report

September 12, 2017

Scheduled date for commencement of dividend payments–

Preparation of Quarterly Settlement Supplementary Explanatory Materials

No

Quarterly Earnings Briefings

No(Numbers less than one million yen have been rounded down)

1. Consolidated Operating Results for the Nine-Month Period of the Fiscal Year Ending October 31, 2017
(November 1, 2016 – July 31, 2017)(1) Consolidated Operating Results (Cumulative)(Percentages show the change from the prior year)
Net Sales
Millions of yen

Fiscal Year ending October 31, 2017:
116,903
Third quarter
Fiscal Year ended October 31, 2016:
103,422
Third quarter(Note) Comprehensive income (millions of yen)
Fiscal Year Ending October 31, 2017, Third Quarter
Fiscal Year Ended October 31, 2016, Third Quarter%

Ordinary Income

Profit Attributable to
Owners of Parent

Millions of yen

Millions of yen

Millions of yen

%

13.0

12,097

4.5

10,576 −15.4

14.4

12,449%23.9

10,049 −19.9

8,537 (43.8%)
5,935 (−27.3%)

Net Income per
Share
Fiscal Year ending October 31, 2017:
Third quarter
Fiscal Year ended October 31, 2016:
Third quarter

Operating Income

Net Income per
Share on a Fully
Diluted Basis

Yen

Yen

222.15－

166.65－(2) Consolidated Financial Position
Total Assets

Net Assets

Millions of yen

Fiscal Year ending October 31, 2017:
224,710
Third quarter
220,836
Fiscal Year ended October 31, 2016
(Reference) Equity (millions of yen)
Fiscal Year Ending October 31, 2017 Third Quarter
Fiscal Year Ended October 31, 2016－

1 －Equity Ratio

Millions of yen%

88,35836.9

81,434

34.7

83,026
76,683

7,850

%

33.3

5,889 −21.5

2. Dividends
Annual Dividends per Share
End of firstquarter

End of second
quarter

End of third
quarterYear-end

Full-year

Yen

Yen

Yen

Yen

Yen

－
－

15.00
15.00

－
－

30.00

45.00

35.00

50.00

Fiscal year ended October 31, 2016
Fiscal year ending October 31, 2017
Fiscal Year ending October 31, 2017
(Projected)(Note) Has the Company revised its most recently released dividend projection?

No

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 2017
(November 1, 2016 – October 31, 2017)(Percentages show the change from the prior year)

Net Sales
Millions of yen

Full year

155,800%

7.5

Operating Income

Ordinary Income

Profit Attributable to
Owners of Parent

Millions of yen

Millions of yen

Millions of yen

17,130%13.2

17,360%20.5

10,730Net Income per
Share

%

%

32.5

303.63(Note) Has the Company revised its most recently released projected consolidated operating results during the quarter? No－

2 －4. Notes(1) Changes in material subsidiaries during the period under review (Changes in specific subsidiaries in conjunction
with a change in the scope of consolidation): No
Company newly included (Company name)─
Company newly excluded (Company name)─(2) Application of special accounting method in the preparation of quarterly consolidated financial statements:(3) Changes in accounting principles, changes in accounting estimates, and restatements(a) Changes in accounting policy in conjunction with revision of accounting standards:(b) Changes other than the above:(c) Changes in accounting estimates:(d) Restatements:

No

No

No
Yes

No

(4) Number of shares issued (common shares)(a) Number of shares outstanding at the end of the period (including treasury shares)
Fiscal year ending October 31, 2017 Third Quarter:
36,092,241 sharesFiscal year ended October 31, 2016:
36,092,241 shares(b) Number of shares of treasury stock at the end of the period
Fiscal year ending October 31, 2017 Third Quarter:
753,252 sharesFiscal year ended October 31, 2016:
753,079 shares(c) Average number of shares during the period (consolidated year-to-date)Fiscal year ending October 31, 2017 Third Quarter:
35,339,036 sharesFiscal year ended October 31, 2016 Third Quarter:
35,339,234 shares
Note: This quarterly earnings report is exempt from the quarterly review procedure
Note: Explanation concerning appropriate use of the projected operating results and other items to note
(Note Concerning Forward-Looking Statements)
The forward-looking statements, including business results forecasts, contained in these materials are based on
information currently available to the Company and on certain assumptions deemed to be reasonable. The
Company does not guarantee the achievement of the projections. Actual operating results may differ substantially
due to a number of factors. Please refer to “1. Qualitative Information Concerning Quarterly Consolidated Operating
Results (3) Explanation Concerning Future Forecasts Including Projected Consolidated Operating Results” on Page
6 of the Attachments for the conditions used as assumptions for the projected operating results and matters to note
before using the projected operating results.

－

3 －○Attachments Table of Contents
1. Qualitative Information Concerning Quarterly Consolidated Operating Results ……………………………………

5(1) Qualitative Information Concerning Consolidated Operating Results ……………………………………………

5(2) Qualitative Information Concerning Consolidated Financial Position …………………………………………….

6(3) Explanation Concerning Future Forecasts Including Projected Consolidated Operating Results …………….

6

2. Quarterly Consolidated Financial Statements and Notes ……………………………………………………………..

7(1) Quarterly Consolidated Balance Sheets …………………………………………………………………………….
(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive
Income …………………………………………………………………………………………………………………..
Quarterly Consolidated Statements of Income

7

Consolidated Nine-month Period ended July 31, 2017 …………………………………………………….

9

9

Quarterly Consolidated Statements of Comprehensive Income
Consolidated Nine-month Period ended July 31, 2017 …………………………………………………….

10(3) Notes Concerning Quarterly Consolidated Financial Statements ………………………………………………..

11(Notes Relating to the Going Concern Assumption) ………………………………………………………………

11(Notes on Significant Changes in Shareholders’ Equity) …………………………………………………………

11(Changes in Accounting Estimates) …………………………………………………………………………………

11(Supplemental Information) ………………………………………………………………………………………….

11(Business Segment Information) ……………………………………………………………………………………

11

－

4 －

1. Qualitative Information Concerning Quarterly Consolidated Operating Results(1) Qualitative Information Concerning Consolidated Operating Results
Management Environment (From November 1, 2016 to July 31, 2017)
During the consolidated cumulative nine-month period ended July 31, 2017, Japan’s economy maintained its
gradual recovery trend as the effects of various government policies, and a recovery in capital expenditures
along with improvements in corporate earnings and the employment environment, could be seen. At the sametime, circumstances that continued to warrant attention remained, including concerns about the effect thatheightened uncertainty factors, arising from the situation in Europe concerning Great Britain’s departure from the
EU and government administration turmoil in the United States, will have on the global economy.
< Third Quarter Operating Results > (From November 1, 2016 to July 31, 2017) >In the construction industry related to the Kanamoto Group, demand continued to expand briskly. In addition tobright spots evident in private sector capital investment, including redevelopment projects in major metropolitan
areas, growth was driven mainly by demand related to public works spending and disaster recovery, as well as
by maintenance and renewal demand to address Japan’s rapidly ageing social infrastructure.
Given such circumstances, the Kanamoto Group resolutely pursued the various measures in its Long-term
Corporate Management Plan BULL55 (FYE October 31, 2015 - FYE October 31, 2019), its action plan aimed atachieving the Group’s continuous growth. The Group focused on strengthening its organization with the goal of
maintaining asset operating levels and efficiently utilizing rental equipment, by implementing flexible investments
in response to actual demand and promptly and efficiently repositioning existing assets.
As a result, net sales for the consolidated cumulative nine-month period ended July 31, 2017 rose by 13.0%
from the same period of the prior consolidated fiscal year to ¥116,903 million. With regard to earnings, operating
income increased 14.4% from the same period of the previous consolidated fiscal year to ¥12,097 million,
ordinary income increased 23.9% year-on-year to ¥12,449 million, and cumulative third quarter profit attributableto owners of parent rose 33.3% year-on-year to ¥7,850 million.
Results for each of the Company’s business segments were as follows.
< Business related to the Construction Equipment Rental Division >In the construction-related business that is Kanamoto’s primary business focus, overall construction equipment
rental demand remained strong, supported by robust construction demand centered on Hokkaido and Kyushu
and by the full-scale transportation infrastructure upgrade program related to the Tokyo Olympics and start ofconstruction on large-scale redevelopment works. The Company moved forward with the creation of a continuous
support system in particular, including the centralization of management resources, to strengthen its support forrecovery efforts following the Kumamoto earthquake, Kagoshima typhoon disaster, and Hokkaido typhoon
disaster, all of which occurred last year, and the torrential rain disasters that struck various regions this year. In
the Kyushu Region, both net sales and operating income for the consolidated cumulative nine-month period
expanded substantially as a result of having added the performance of Nishiken Co., Ltd. to consolidated
operating results from the third quarter of the prior consolidated fiscal year, and the gradual appearance ofsynergistic effects with Nishiken from an operating perspective.
Used construction equipment sales edged up 1.7% year-on-year, as Kanamoto sold equipment with theobjective of maintaining an appropriate asset portfolio, based on its initial plan.
As a result of these factors, for the consolidated cumulative third quarter period under review net sales for
Kanamoto’s construction-related businesses increased 11.1% from the same period of the previous consolidated
fiscal year to ¥105,351 million, and operating income rose 12.5% year-on-year to ¥11,109 million.

－

5 －< Other businesses >In the Company’s other businesses, both steel products-related sales and sales in the information andtelecommunications-related division were roughly unchanged from the same period one year earlier, but becauseof the addition of the Company’s welfare-related business, net sales rose 34.5% from the same period of theprevious consolidated fiscal year to ¥11,551 million, and operating income jumped 76.4% year-on-year to ¥691
million.
< Change in number of branches >The Company opened three new branches during its third quarter consolidated period. The Company did not
close any branches.
New branches: Kanto Aerial Work Vehicle Maintenance Center (Chiba City, Chiba Prefecture), Iida Branch(Shimoina-gun, Nagano Prefecture), Fuji Branch (Fuji City, Shizuoka Prefecture)(2) Qualitative Information Concerning Consolidated Financial Position
Assets, liabilities and net assets
Compared with the end of the prior consolidated fiscal year, total assets at the end of the third quarter underreview increased by ¥3,874 million to ¥224,710 million. This change mainly reflected an increase of ¥1,246
million in cash and deposits, an increase of ¥1,214 million in construction machine parts, an increase of ¥1,083
million in buildings and structures, and an increase of ¥1,246 million in investment securities.
Total liabilities were ¥136,351 million, a decrease of ¥3,050 million compared with the end of the priorconsolidated fiscal year. The principal items contributing to this change were decreases of ¥1,618 million incurrent portion of long-term loans payable, ¥1,681 million in long-term loans payable, and ¥579 million in longterm accounts payable-other, respectively, and an increase of ¥1,251 million in short-term loans payable.
Total net assets came to ¥88,358 million, ¥6,924 million higher than at the end of the prior consolidated fiscal
year. This was mainly because of profit attributable to owners of parent of ¥7,850 million, and a decrease of¥1,590 million for dividends from surplus.

(3) Explanation Concerning Future Forecasts Including Projected Consolidated Operating Results
At this time, the Company has not made any changes to the press release “Notification Concerning Revision of
Projected Full-Year Operating Results for the Business Period Ending October 2017” issued on June 2, 2017.

－6 －2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets(Unit: Millions of yen)
As of October 31, 2016
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Electronically recorded monetary claims-operating
Securities
Merchandise and finished goods
Raw materials and supplies
Construction machine parts
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Rental equipment
Accumulated depreciation
Rental equipment, net
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Allowance for investment loss
Total investments and other assets
Total non-current assets
Total assets－

7 －As of July 31, 201733,20936,502
3,718
200
693
379
10,265
604
1,059
−689
85,94534,45535,463
4,007
200
708
282
11,480
538
1,173
−756
87,554

189,549−114,596
74,95331,029−18,883
12,145
6,999−5,963
1,036
35,6302,343−1,332
1,011
124,776

197,693−122,577
75,11532,720−19,491
13,2297,213−6,1001,113
35,623
2,009−1,399610
125,692

628
664
1,292

521
1,013
1,535

6,911
419
2,216
−406
−320
8,821
134,891
220,836

8,158
418
1,873
−262
−260
9,928
137,156
224,710(Unit: Millions of yen)
As of October 31, 2016
Liabilities
Current liabilities
Notes and accounts payable-trade
Short-term loans payable
Current portion of bonds
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Accounts payable-other
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Long-term accounts payable-other
Provision for directors’ retirement benefits
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets－

8 －As of July 31, 2017

26,986
1,194
40
13,951
1,357
2,052
1,091
21,0792,399
70,152

27,6592,445
1012,333
1,068
1,574
724
21,0882,893
69,79826,6442,700
38,870
94
234
384
321
69,249139,402

24,9632,207
38,290
103
249
427
311
66,553
136,351

13,652
14,91648,017−2,12974,45813,652
14,91654,277−2,12980,718

2,051
－
164
8
2,225
4,750
81,434
220,836

2,178
0
121
7
2,308
5,332
88,358
224,710

(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated Nine-month Period ended July 31, 2017)(Unit: Millions of yen)
Nine months ended
31-July-16
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Insurance income
Rent income
A receipt bonus
Foreign exchange gains
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on sales of notes receivable-trade
Foreign exchange losses
Provision of allowance for investment loss
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Gain on donation of non-current assets
Subsidy income
Gain on sales of investment securities
Gain on step acquisitions
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on valuation of shares of subsidiaries and associates
Total extraordinary losses
Profit before income taxes
Income taxes-current
Income taxes-deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent－

9 －Nine months ended
31-July-17

103,42272,70630,716
20,13910,576116,903
81,24735,65523,55812,097

5
135
20
52
10
－
30
147
400

2
136
44
56
7
129
32
239
649

208
9
453
109
145
927
10,049

169
7
－
－
121
297
12,449

17
－
6
－
14
39

22
13
5
174
－
217

65
49
115
9,973
3,468
301
3,769
6,204
314
5,889

107
28
136
12,530
4,080
4
4,084
8,445
594
7,850

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Nine-month Period ended July 31, 2017)(Unit: Millions of yen)
Nine months ended
31-July-16
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests－

10 －Nine months ended
31-July-17

6,204

8,445

−362
−0
93
－
−268
5,935

136
0
−43
−1
92
8,537

5,625

7,933

310

604

(3) Notes Concerning Quarterly Consolidated Financial Statements(Notes Relating to the Going Concern Assumption)
The Company had no material items to report.
(Notes on Significant Changes in Shareholders’ Equity)
The Company had no material items to report.
(Changes in Accounting Estimates)
Beginning from the first quarter of the current consolidated fiscal year, Nishiken Co., Ltd., a consolidated subsidiary,
has modified the useful lives it applies to its rental equipment.
This change has been applied because Nishiken Co., Ltd. has become a consolidated subsidiary, and is based oncomprehensive consideration of the economic useful lives and equipment repair and renewal cycles of similar typesof rental equipment that are used under identical circumstances, and brings the useful lives into uniformity with thestandard applied in the Kanamoto Group.
As a result of this change, operating income, ordinary income, and profit before income taxes for the consolidated
cumulative third quarter of the fiscal year ending October 2017 decreased by ¥87 million, respectively, compared withwhat they otherwise would have been had the useful lives applied in past periods been applied.
The effect of this change on the Company’s information by segment is described in the relevant section.
(Supplemental Information)(Application of the Implementation Guidance on Recoverability of Deferred Tax Assets)
Beginning from the first quarter of the current consolidated fiscal year, the Company is applying the
Implementation Guidance on Recoverability of Deferred Tax Assets (Accounting Standards Board of Japan
Financial Accounting Standards Implementation Guidance No. 26, revised March 28, 2016).
(Business Segment Information)[ Segment Information ]I Third quarter of the prior consolidated fiscal year (From November 1, 2015 to July 31, 2016)
1. Information concerning net sales and profit or loss by reporting segment(Unit: Millions of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division

Other Businesses(See note)

94,8308,591

103,422－－－

94,8308,591

103,422

9,872

392

10,264

Net sales
Net sales to outside customers
Net sales or transfers between
related segments
Total
Segment income

Total(Note) The “Other businesses” classification encompasses business segments not included in the reporting
segment, and includes business related to the Steel Sales Division, the Information Products Division,
welfare-related businesses, and other businesses.

－

11 －

2. Difference between total reporting segment profit or loss and the amount reported on the Quarterly
Consolidated Statements of Income, and the main reasons for the difference (Matters Pertaining toReconciliation of Difference)(Unit: Millions of yen)
IncomeAmountReporting segment total
Income for “Other businesses” classification
Other adjustments

9,872
392
312

Operating income reported on the Consolidated
Quarterly Statements of Income

10,576

3. Information concerning fixed asset impairment loss and goodwill by reporting segment
In the second quarter consolidated period, Nishiken Co., Ltd. has been included in the scope of
consolidation.
The amount of the increases in goodwill as a result of this event are ¥380 million for business related to
the Construction Equipment Rental Division, and ¥331 million for other businesses.

－

12 －

II Third quarter of the current consolidated fiscal year (From November 1, 2016 to July 31, 2017)
1. Information concerning net sales and profit or loss by reporting segment(Unit: Millions of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division
Net sales
Net sales to outside customers
Net sales or transfers between
related segments

Other Businesses(See note)

Total

105,351

11,551

116,903

－

－

－

Total

105,351

11,551

116,903

Segment income

11,109691

11,800(Note) The “Other businesses” classification encompasses business segments not included in the reporting
segment, and includes business related to the Steel Sales Division, the Information Products Division,
welfare-related businesses, and other businesses.
2. Difference between total reporting segment profit or loss and the amount reported on the Quarterly
Consolidated Statements of Income, and the main reasons for the difference (Matters Pertaining toReconciliation of Difference)(Unit: Millions of yen)
IncomeAmountReporting segment total
Income for “Other businesses” classification
Other adjustments

11,109691
297

Operating income reported on the Consolidated
Quarterly Statements of Income

12,097

3. Information concerning fixed asset impairment loss and goodwill by reporting segment
The Company had no material items to report.
4. Information concerning changes in reporting segments etc.
(Change of useful lives)
As described in “Changes in Accounting Estimates”, the Company modified the useful lives of rental
equipment owned by Nishiken Co., Ltd., a consolidated subsidiary of Kanamoto. As a result, the income
for the “Business related to the Construction Equipment Rental Division” for the third quarter year-to-date
period of the current consolidated fiscal year decreased by ¥87 million compared with what it otherwise
would have been had the useful lives applied in past periods been applied.

－

13 －