Three-month Consolidated Financial Report for the Fiscal Year ending
October 31, 2019 [Japan GAAP]
March 8, 2019
Listed Company Name
Company Code Number

Kanamoto Co., Ltd.
9678

Listing Exchanges

Tokyo Stock Exchange, Sapporo Stock Exchange

URL
Representative

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

Inquiries

Hiroyuki Isono

Director & 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

March 14, 2019

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 Three-Month Period of the Fiscal Year Ending October 31, 2019
(November 1, 2018 – January 31, 2019)(1) Consolidated Operating Results (Cumulative)(Percentages show the change from the prior year)
Profit Attributable to
Net Sales
Operating profit
Ordinary profit
Owners of Parent
Millions of yen%

Fiscal Year ending October 31,
44,126
4.4
2019: First quarter
Fiscal Year ended October 31,
42,264
8.5
2018: First quarter(Note) Comprehensive income (millions of yen)
Fiscal Year Ending October 31, 2019, First Quarter
Fiscal Year Ended October 31, 2018, First Quarter%

Millions of yen%

Millions of yen

%

3,913

−27.1

4,010

−27.7

2,482

−27.5

5,370

19.6

5,543

14.3

3,422

9.4

2,412 (−34.7%)
3,697(1.0%)Net Income per
Share on a Fully
Diluted BasisNet Income per
Share
Fiscal Year ending October 31,
2019: First quarter
Fiscal Year ended October 31,
2018: First quarter

Millions of yen

Yen

Yen

64.30

－

96.84

－

(2) Consolidated Financial Position
Total Assets

Net Assets

Millions of yen

Millions of yen

Fiscal Year ending October 31,
256,511
113,447
2019: First quarter
Fiscal Year ended October 31,
241,374
102,0312018(Reference) Equity (millions of yen)
Fiscal Year Ending October 31, 2019 First Quarter 107,578
Fiscal Year Ended October 31, 2018
95,680－1 －Equity Ratio
%

41.9
39.6

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

End of firstquarter
Fiscal year ended October 31, 2018
Fiscal year ending October 31, 2019

Full-year

Yen

Yen

Yen

Yen

Yen

－
－

20.00

－

40.00

60.00

25.00

－

40.00

65.00

Fiscal Year ending October 31, 2019
(Projected)(Note) Has the Company revised its most recently released dividend projection?

No

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 2019
(November 1, 2018 – October 31, 2019)(Percentages show the change from the prior year)

Net SalesInterim (Cumulative)
Full year

Operating profit

Profit Attributableto Owners of
ParentOrdinary profit

Net Income per
ShareMillions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

89,700175,700

5.1
4.5

11,10018,4001.0
4.5

11,20018,700

0.4
4.3

7,000
12,0003.9
1.2

181.31
310.81(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 policy 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, 2019 First Quarter:
38,742,241 sharesFiscal year ended October 31, 2018:36,092,241 shares(b) Number of shares of treasury stock at the end of the period
Fiscal year ending October 31, 2019 First Quarter:
3,183 sharesFiscal year ended October 31, 2018:753,183 shares(c) Average number of shares during the period (consolidated year-to-date)Fiscal year ending October 31, 2019 First Quarter:
38,608,623 sharesFiscal year ended October 31, 2018 First Quarter:
35,339,036 shares

Note: Quarterly earnings reports are not subject to quarterly review by certified public accountants or independent accountauditors.
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 anumber 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 －〇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 Three-month Period ended January 31, 2019 ……………………………………………….

9

9

Quarterly Consolidated Statements of Comprehensive Income
Consolidated Three-month Period ended January 31, 2019 ……………………………………………….

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

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

11(Note on Significant Changes to Shareholders’ Equity) ………………………………………………………….

11(Changes to Material Subsidiaries during the Consolidated Period under Review) …………………………

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

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

12

－

4 －

1. Qualitative Information Concerning Quarterly Consolidated Operating Results(1) Qualitative Information Concerning Consolidated Operating Results
During the consolidated three-month period ended January 31, 2019, Japan’s economy maintained a gradual
recovery trend as the employment environment and other conditions continued to improve against the backdrop ofstrong corporate earnings. Nevertheless, a slowdown in the pace of sales and earnings could be sensed,
particularly in industries that rely on overseas demand, because of concerns of a global economic slump triggeredby the effect of prolonged trade friction between the U.S. and China and China’s slackening economic growth.
In the construction industry related to the Kanamoto Group, domestic construction investment continued to
expand steadily, with private sector capital investment rising and spending on public works projects based on thegovernment’s national resilience plan remained brisk. As shortages of construction material, equipment andmanpower push the price of materials, labor costs and other construction expenditures sharply higher and put
pressure on project profitability, however, the severity of the current business environment became starkly clear.
Given such circumstances, as it began the final fiscal year of its “BULL55” long-term vision (fiscal 2015 - fiscal
2019) the Kanamoto Group moved ahead with the three priority policies described in that plan to expand its
domestic base of operations, develop its overseas business and optimize its internal operational processes, andfocused on laying the foundation for its next long-term plan and building its organization.
For the consolidated first quarter of the current fiscal year, the Company reported net sales of ¥44,126 million, up
4.4% compared with the same period of the previous fiscal year. In terms of earnings, operating income decreased
27.1% from the same period of the previous consolidated fiscal year to ¥3,913 million, ordinary income declined
27.7% year-on-year to ¥4,010 million, and first quarter profit attributable to owners of parent fell 27.5% year-on-yearto ¥2,482 million. This reflected the higher depreciation expense burden that resulted from an increase in capital
expenditures to meet robust demand, among other factors.
Beginning from the first quarter of the current consolidated fiscal year, the Company will include KG FlowtechnoCo., Ltd. and KANAMOTO (CHINA) INVESTMENT CO., LTD., which in the past were non-consolidated subsidiaries,
within the scope of consolidation because their material importance has increased.
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, construction equipment rental demand
was supported by transportation infrastructure construction related to the Tokyo Olympics along with other works,
including large-scale redevelopment works, and remained brisk as a whole, despite the emergence of somedifferences among regions in construction demand. Rental unit prices, however, remained low throughout Japan.
In addition, to strengthen its support organization for restoration and reconstruction activities following themultiple natural disasters that occurred in 2018 including the Northern Osaka Prefecture Earthquake, torrential
rains in western Japan, and the Hokkaido Eastern Iburi Earthquake, the Kanamoto Group worked to expand its
response capabilities through steps such as redeployment of rental equipment to the stricken areas and expansionof its asset portfolio.
Used construction equipment sales, which helped boost net sales in the same period of the prior fiscal year as
the Company sold large quantities of equipment, slid 69.5% year-on-year as the Company disposed of usedequipment in line with its initial plan.
As a result of these factors, first quarter net sales for Kanamoto’s construction-related businesses rose 4.6%
from the same period of the previous consolidated fiscal year to ¥39,569 million, and operating income declined
30.0% year-on-year to ¥3,514 million.
< Other businesses >In the Company’s other businesses, steel products-related sales, information and telecommunications-related
division sales and sales from welfare-related business all expanded steadily. Net sales rose 2.4% from the same
period of the previous consolidated fiscal year to ¥4,556 million, and operating income climbed 18.0% year-on-yearto ¥295 million.

－

5 －(2) Qualitative Information Concerning Consolidated Financial Position
Assets, liabilities and net assets
Total assets at the end of the first quarter under review increased by ¥15,137 million compared with the end of
the prior consolidated fiscal year to ¥256,511 million. This change mainly reflected an increase of ¥7,171 million in
cash and deposits and an increase of ¥5,712 million in rental equipment.
Total liabilities were ¥143,064 million, an increase of ¥3,721 million compared with the end of the priorconsolidated fiscal year. The principal items contributing to this change were an increase of ¥2,925 million in notes
and accounts payable-trade and an increase of ¥3,701 million in long-term accounts payable-other, and a decreaseof ¥2,055 in long-term loans payable.
Total net assets came to ¥113,447 million, ¥11,415 million higher than at the end of the prior consolidated fiscal
year. This mainly reflected increases of ¥8,353 million from the issuance of new shares by way of a public offeringand third-party allotment and an increase of ¥2,364 million from the disposal of treasury stock by way of a public
offering, respectively, profit attributable to owners of parent for the quarter of ¥2,482 million, and a decrease of¥1,413 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, 2018 (Japan GAAP) released on December 7, 2018.

－6 －2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets(Unit: Millions of yen)
As of October 31, 2018

As of January 31, 2019

36,79336,736
5,091
200
765
55
651
14,652
1,710−208
96,44843,96438,404
5,565
500
1,120
43
792
15,1182,040−220
107,329

203,519−127,242
76,27735,531−20,859
14,671
7,643−6,333
1,309
36,5662,227−1,544682
129,508

212,695−130,706
81,98935,691−21,216
14,475
7,553−6,266
1,286
36,964
2,368−1,586781
135,498

343
1,236
1,580

308
1,211
1,519

9,989
856
3,367
−375
13,837
144,926
241,374

8,488
823
3,268
−416
12,164
149,182
256,511

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims - operating
Securities
Merchandise and finished goods
Costs on uncompleted construction contracts
Raw materials and supplies
Construction machine parts
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 －(Unit: Millions of yen)
As of October 31, 2018

As of January 31, 201930,695
1,146
12,825
945
1,929
1,136
22,8392,749
74,26733,6201,579
12,548
925
1,183
553
22,767
3,070
76,24823,087
1,684
39,591261
449－
65,075
139,342

21,032
1,716
43,292266
451
56
66,815143,064

13,652
14,91667,086−2,12993,526

17,82919,276
68,659−8
105,756

2,148
0
－
5
2,153
6,351
102,031
241,374

1,876
－
−59
5
1,822
5,868
113,447
256,511

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
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 －(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated Three-month Period ended January 31)(Unit: Millions of yen)Three months ended
January 31, 2018
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
Reversal of allowance for doubtful accounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Share issuance cost
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales 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
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 －Three months ended
January 31, 201942,26428,803
13,461
8,091
5,370

44,126
31,607
12,519
8,605
3,913

4
64
19
51
25
134
299

6
63
20
－
11
109
212

36
25
－
63
126
5,543

24
5
46
39
115
4,010

0
3
－
3

24
5
5
35

21
21
5,525
1,505
301
1,807
3,718
295
3,422

10
10
4,035
1,079
210
1,289
2,746
264
2,482

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Three-month Period ended January 31)(Unit: Millions of yen)Three months ended
January 31, 2018
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 －Three months ended
January 31, 2019

3,718

2,746

−0
0
−19
−0
−20
3,697

−273
−0
−59
−0
−333
2,412

3,403

2,150

294

262

(3) Notes Concerning Quarterly Consolidated Financial Statements(Notes Relating to the Going Concern Assumption)
The Company had no material items to report.
(Note on Significant Changes to Shareholders’ Equity)
At its Board of Directors meeting held on November 12, 2018, the Company resolved to issue new shares by wayof public offering and third-party allotment, dispose of treasury shares by way of public offering, and conduct asecondary offering of the Company’s shares, and to issue 2,250,000 new shares of common stock by way of public
offering with a payment date of November 28, 2018 to increase the capital stock and capital surplus of theCompany by ¥3,546 million, respectively, and dispose of 750,000 shares of treasury stock shares by way of public
offering to decrease treasury shares by ¥2,120 million and increase capital surplus by ¥243 million. The delivery of
450,000 secondary offering shares of the Company’s stock was completed on November 29, 2018 and the capitalstock and capital surplus of the Company were increased by ¥630 million, respectively, through the issuance of
400,000 new shares by way of third-party allotment for which the payment date was December 19, 2018.
As a result, as of January 31, 2019 the Company’s capital stock was ¥17,829 million, its capital surplus was¥19,276 million and treasury shares were – ¥8.0 million.
(Changes to Material Subsidiaries during the Consolidated Period under Review)
The Company had no material items to report.
Although not a change corresponding to changes in specific subsidiaries, beginning from the first quarter of thecurrent consolidated fiscal year the Company will include KG Flowtechno Co., Ltd. and KANAMOTO (CHINA)INVESTMENT CO., LTD., two non-consolidated subsidiaries, within the scope of consolidation because their material
importance increased in the prior consolidated fiscal year.
(Supplemental Information)(Application of the Partial Amendments to Accounting Standard for Tax Effect Accounting. etc.)
Beginning from the first quarter of the current consolidated fiscal year, the Company will apply the Partial
Amendments to Accounting Standard for Tax Effect Accounting (Accounting Standards Board of Japan AccountingStandard Statement No. 28 dated February 16, 2018) and its related guidance and has included deferred tax assets
in the category “investments and other assets”.

－

11 －

(Business Segment Information)[ Segment information ]I First quarter of the prior consolidated fiscal year (From November 1, 2017 to January 31, 2018)
1. Information concerning net sales and profit or loss of each reporting segment(Unit: Millions of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division

Other Businesses

37,815

4,449

42,264－－－37,815

4,449

42,264

5,021

250

5,272

Net sales
Net sales to outside customers
Net sales or transfers between
related segments
Total
Segment profit(See note)

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

5,021
250
97

Operating profit reported on the Consolidated
Quarterly Statements of Income

5,370

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

－

12 －

II

First quarter of the current consolidated fiscal year (From November 1, 2018 to January 31, 2019)
1. Information concerning net sales and profit or loss of each reporting segment(Unit: Millions of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division

Other Businesses

39,5694,556

44,126－－－

39,5694,556

44,126

3,514

295

3,810

Net sales
Net sales to outside customers
Net sales or transfers between
related segments
Total
Segment profit(See note)

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

3,514
295
103

Operating profit reported on the Consolidated
Quarterly Statements of Income

3,913

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

－

13 －