Six-month Consolidated Financial Report for the Fiscal Year ending
October 31, 2018 [Japan GAAP]
June 8, 2018
Listed Company Name
Company Code Number
Listing Exchanges
URL
Representative

Kanamoto Co., Ltd.
9678
Tokyo Stock Exchange, Sapporo Stock Exchange
http://www.kanamoto.co.jp
Tetsuo Kanamoto
President and CEO

Inquiries

Nobuhito Utatsu

Director and 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

June 13, 2018

Scheduled date for commencement of dividend payments

July 5, 2018

Preparation of Quarterly Settlement Supplementary
Explanatory Materials

Yes

Quarterly Earnings Briefings

Yes (For institutional investors and analysts)(Numbers less than one million yen have been rounded down)

1. Consolidated Operating Results for the Six-Month Period of the Fiscal Year Ending October 31, 2018
(November 1, 2017 – April 30, 2018)(1) Consolidated operating results (Cumulative)(Percentages show the change from the prior year)
Net Sales

Operating Profit

Millions of yen%

Fiscal Year ending October 31, 2018:85,349
7.8
Second quarter
Fiscal Year ended October 31, 2017:
79,210
15.4
Second quarter(Note) Comprehensive income (millions of yen)
Fiscal Year Ending October 31, 2018, Second Quarter
Fiscal Year Ended October 31, 2017, Second Quarter
Net Profit per
Share
Fiscal Year ending October 31, 2018:
Second quarter
Fiscal Year ended October 31, 2017:
Second quarter

Profit Attributable to
Owners of Parent

Ordinary Profit

Millions of yen%

Millions of yen%

Millions of yen%

10,99410.0

11,155

8.9

6,735

4.1

9,993

16.1

10,242

24.2

6,468

30.2

7,171 (1.7%)
7,053 (36.2%)
Net Profit per
Share on a Fully
Diluted Basis

Yen

Yen

190.59－183.03－(2) Consolidated financial position
Total Assets
Fiscal Year ending October 31, 2018:
Second quarter
Fiscal Year ended October 31, 2017

Net Assets

Equity Ratio

Millions of yen

Millions of yen%

242,968

97,701

37.7

227,545

91,78837.9(Reference) Equity (millions of yen)
Fiscal Year Ending October 31, 2018 Second Quarter
Fiscal Year Ended October 31, 2017－1 －

91,621
86,241

2. Dividends
Annual Dividends per Share
End of second End of third
Year-endquarterquarter

End of firstquarter
Fiscal year ended October 31, 2017
Fiscal year ending October 31, 2018
Fiscal year ending October 31, 2018
(Projected)

Full-year

Yen

Yen

Yen

Yen

Yen

－
－

15.00
20.00

－

35.00

50.00

－

35.00

55.00

(Note) Has the Company revised its most recently released dividend projection?

No

3. Projected Consolidated Operating Results for the Fiscal year ending October 2018
(November 1, 2017 – October 31, 2018)(Percentages show the change from the prior year)

Net Sales
Full year

Operating Profit

Ordinary Profit

Profit Attributable to
Owners of Parent

Net Profit per
ShareMillions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

161,870

2.2

17,3304.0

17,4201.3

10,9001.4

308.44(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 witha 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:

No(3) Changes in accounting principles, changes in accounting estimates and retrospective restatements(a) Changes in accounting principles in conjunction with revision of accounting standards: No(b) Changes other than the above:No(c) Changes in accounting estimates:(d) Retrospective restatements:

NoNo(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, 2018 Second Quarter:
36,092,241 sharesFiscal year ended October 31, 2017:36,092,241 shares(b) Number of shares of treasury stock at the end of the period
Fiscal year ending October 31, 2018 Second Quarter:
753,183 sharesFiscal year ended October 31, 2017:753,253 shares(c) Average number of shares during the period (consolidated year-to-date)Fiscal year ending October 31, 2018 Second Quarter:
35,339,047 sharesFiscal year ended October 31, 2017 Second Quarter:
35,339,060 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.
Procedure for obtaining the Quarterly Settlement Supplementary Explanatory Materials and Quarterly Earnings Briefing
The Company plans to hold a briefing for institutional investors and analysts on Tuesday, June 12, 2018.
Following the briefing, the Company will upload the briefing highlights and discussion (voice recording) on the
Company’s website as quickly as possible, together with the Quarterly Earnings Briefing materials used that day.

－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 Interim Period Ended April 30 ……………………………………………………….……….

9

9

Quarterly Consolidated Statements of Comprehensive Income
Consolidated Interim Period Ended April 30 ……………………………………………………….……….

10(3) Quarterly Consolidated Statements of Cash Flows ……………………………………………………………….

11(4) Notes Concerning Quarterly Consolidated Financial Statements ……………………………………………….

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

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

13(Supplemental Information) …………………………………………………………………………………………

13(Business Segment Information) ……………………………………………………………………………………

13

－

4 －

1. Qualitative Information Concerning Quarterly Consolidated Operating Results(1) Qualitative Information Concerning Consolidated Operating Results< Second Quarter Operating Results > (From November 1, 2017 to April 30, 2018)
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 bypublic 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 yen, 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 toowners of parent rose 4.1% year-on-year to ¥6,735 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, the Company pursued
development of branches in the Tokyo metropolitan area and in regions of western Japan where it has not had astrong presence, in accordance with its medium and long-term plans. At the same time, the Company moved tobolster measures in business domains where it can take advantage of its strengths as a group, such asbroadening 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.

－5 －(2) Qualitative Information Concerning Consolidated Financial Position
Assets, liabilities and net assets
Total assets at the end of the interim period under review increased by ¥15,423 million compared with the endof the prior consolidated fiscal year to ¥242,968 million. This change mainly reflected an increase of ¥4,903
million in cash and deposits, an increase of ¥3,240 million in rental equipment, and an increase of ¥1,656 million
in investment securities.
Total liabilities were ¥145,266 million, an increase of ¥9,510 million compared with the end of the priorconsolidated fiscal year. The principal items contributing to this change were an increase of ¥4,873 million innotes and accounts payable-trade, an increase of ¥1,095 million in accounts payable-other, and an increase of¥2,181 million in long-term accounts payable-other.
Total net assets came to ¥97,701 million, ¥5,912 million higher than at the end of the prior consolidated fiscal
year. This was mainly because of profit attributable to owners of parent for the interim period of ¥6,735 million,
and a decrease of ¥1,236 million for dividends from surplus.

(3) Explanation Concerning Future Forecasts Including Projected Consolidated Operating Results
There are no revisions to the full-year projected operating results that the Company announced in the Financial
Statements Bulletin for the Fiscal Year Ended October 31, 2017 (Japan GAAP) released on December 8, 2017.

－6 －2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets(Unit: Millions of yen)
As of October 31, 2017
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
Total investments and other assets
Total non-current assets
Total assets－

7 －As of April 30, 201835,22037,057
4,069
200
583
288
12,193
706
1,237
−784
90,77240,12337,986
4,900
200
1,125
629
12,790
756
1,343
−795
99,060198,879−125,211
73,66832,910−19,801
13,108
7,290−6,154
1,136
35,6232,170−1,421
749
124,286

202,027−125,119
76,90833,407−20,332
13,074
7,472−6,3191,152
36,6573,206−1,481
1,724
129,518

486
1,110
1,596

415
1,263
1,678

8,417
436
2,308
−272
10,889136,772
227,545

10,073
446
2,510
−320
12,710143,907242,968

(Unit: Millions of yen)
As of October 31, 2017
Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
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 April 30, 2018

28,773994
12,029
1,048
3,247
1,099
21,2693,060
71,52133,647770
12,405
1,018
3,989
1,229
22,364
3,245
78,672

23,846
2,017
37,127
106
259
431
444
64,234
135,756

24,3091,925
39,308
－
251
437
361
66,594145,266

13,652
14,91657,172−2,12983,612

13,652
14,916
62,670−2,12989,110

2,538
0
85
5
2,629
5,547
91,788
227,545

2,415
－
90
4
2,510
6,080
97,701
242,968(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated Interim Period Ended April 30)(Unit: Millions of yen)Six months endedApril 30, 2017
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rent income
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Gain on donation of non-current assets
Subsidy income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on valuation of shares of subsidiaries and associates
Loss on sales of investment securities
Loss on valuation of investment securities
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 －Six months endedApril 30, 2018

79,21053,71825,492
15,4999,993

85,34958,052
27,297
16,303
10,994

1
55
38
122
263
481

9
64
43
－
259
376

133
－
97
231
10,242

57
34
124
215
11,155

8
13
3
174
200

0
－
12
0
12

63
28
－
－
91
10,351
3,547
−197
3,349
7,001
533
6,468

32
－
157
44
234
10,993
3,724
−86
3,637
7,296
561
6,735

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Interim Period Ended April 30)(Unit: Millions of yen)Six months endedApril 30, 2017
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 －Six months endedApril 30, 2018

7,001

7,296

93
0
−41
−0
51
7,053

−127
−0
4
−0
−124
7,171

6,512

6,616

540

555

(3) Quarterly Consolidated Statements of Cash Flows(Unit: Millions of yen)Six months endedApril 30, 2017
Cash flows from operating activities
Profit before income taxes
Depreciation
Amortization of goodwill
Loss (gain) on sales and retirement of non-current assets
The amount of cost price transfer with asset sell-off forrentals
Expenditure by the construction equipment and supplies
Expenditure by the assets acquisition for rentals
Loss (gain) on sales of investment securities
Loss (gain) on valuation of investment securities
Loss on valuation of shares of subsidiaries and associates
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in net defined benefit liability
Interest and dividend income
Assets buy on the installment plan purchase payment
interest for rentals
Interest expenses
Foreign exchange losses (gains)
Decrease (increase) in notes and accounts receivable trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable - trade
Increase (decrease) in accounts payable - other
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Proceeds from sales of property, plant and equipment
Purchase of intangible assets
Purchase of investment securities
Proceeds from sales of investment securities
Purchase of shares of subsidiaries
Purchase of shares of subsidiaries and associates
Payments of loans receivableCollection of loans receivable
Other, net
Net cash provided by (used in) investing activities

－

11 －

Six months endedApril 30, 2018

10,351
11,94071
55

10,933
12,487
71
31

665

1,151

−460
−1,381
−174
－
28
−168
94
9
−56

−584
−2,603
157
44
－
59
129
−8
−73

176

157

133
−91

57
2

10

−1,765

−85
3,485
1,114
463
26,18056−309−1,812
24,114

−890
5,484
1,364
−369
25,83869−213−2,97622,716−60－−1,527
16
−259
−4
316
－
－
−96
11
193
−1,409−190
190−2,6020−227−4
1−1,393
−99
−345
81
23
−4,562

(Unit: Millions of yen)Six months endedApril 30, 2017
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
Redemption of bonds
Proceeds from long-term loans payable
Repayments of long-term loans payable
Repayments of installment payables
Repayments of lease obligations
Purchase of treasury shares
Purchase of treasury shares of subsidiaries
Cash dividends paid
Dividends paid to non-controlling interests
Other, net
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

－

12 －

−158
−30
6,440
−8,701−10,959−1,137−0−0−1,056−22－−15,627
7
7,084
33,06940,154Six months endedApril 30, 2018
−223
－
7,600
−6,760−12,031−576－－−1,235−22
0−13,250−0
4,903
35,16040,063

(4) 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.
(Supplemental Information)(Provision for directors’ retirement benefits)
Certain consolidated subsidiaries resolved at the Board of Directors meeting held in January 2018 to discontinue
the system for retirement allowances to directors and pay a termination payment, in conjunction with revisions to
the Work Provisions for Directors. In accordance with this change, Kanamoto has reversed the full amount of theretirement allowances to directors for the period until the resolution of the same Board of Directors Meeting, anddisclosed the unpaid amount of ¥108 million in conjunction with the termination payment by including the amount inlong-term accounts payable-other reported under long-term liabilities.
(Business Segment Information)[ Segment information ]I Interim period of the prior consolidated fiscal year (From November 1, 2016 to April 30, 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

Other Businesses(See note)

72,0997,110

79,210－－－72,0997,110

79,210

9,259

534

9,793

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 and 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

9,259
534
199

Operating profit reported on the Consolidated
Quarterly Statements of Income

9,993

3. Information concerning fixed asset impairment loss and goodwill by reporting segment
The Company had no material items to report.

－

13 －

II

Interim period of the current consolidated fiscal year (From November 1, 2017 to April 30, 2018)
1. Information concerning net sales and profit or loss by reporting segment(Unit: Millions of yen)
Reporting segment
Other Businesses
Business related to the
Total
Construction Equipment(See note)
Rental Division
Net sales
Net sales to outside customers
Net sales or transfers between
related segments

76,782

8,567

85,349

－

－

－

Total

76,782

8,567

85,349Segment income

10,355444

10,800(Note) The “Other businesses” classification encompasses business segments not included in the reporting
segment, and includes business related to the Steel Sales Division and 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

10,355

Income for “Other businesses” classification

444

Other adjustments

194

Operating profit reported on the Consolidated
Quarterly Statements of Income
3. Information concerning fixed asset impairment loss and goodwill by reporting segment
The Company had no material items to report.

－

14 －

10,994