Nine-month Consolidated Financial Report for the Fiscal Year ending
October 31, 2018 [Japan GAAP]
September 7, 2018
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

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, 2018

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, 2018
(November 1, 2017 – July 31, 2018)(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,
125,075
7.0
2018: Third quarter
Fiscal Year ended October 31,
116,90313.0
2017: Third quarter(Note) Comprehensive income (millions of yen)
Fiscal Year Ending October 31, 2018, Third Quarter
Fiscal Year Ended October 31, 2017, Third Quarter
Net Income per
Share
Fiscal Year ending October 31,
2018: Third quarter
Fiscal Year ended October 31,
2017: Third quarter

Millions of yen%

Millions of yen%

Millions of yen%

13,415

10.9

13,659

9.7

8,255

5.2

12,09714.4

12,449

23.9

7,850

33.3

8,699 (1.9%)
8,537 (43.8%)
Net Income per
Share on a Fully
Diluted Basis

Yen

Yen

233.60－222.15－(2) Consolidated Financial Position
Total Assets

Net Assets

Millions of yen

Fiscal Year ending October 31,
236,542
2018: Third quarter
Fiscal Year ended October 31,
227,545
2017(Reference) Equity (millions of yen)
Fiscal Year Ending October 31, 2018 Third Quarter
Fiscal Year Ended October 31, 2017－%

98,52239.0

91,78837.9

92,36686,2411 －Equity Ratio

Millions of yen

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

Profit Attributable to
Owners of Parent

Ordinary profit

Net Income 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 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, 2018 Third 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 Third 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 Third Quarter:
35,339,051 sharesFiscal year ended October 31, 2017 Third Quarter:
35,339,036 shares

Note: Quarterly earnings reports are not subject to quarterly review by certified public accounts 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 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
7 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 ……………………………………………

5(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, 2018 …………………………………………………….

9

9

Quarterly Consolidated Statements of Comprehensive Income
Consolidated Nine-month Period ended July 31, 2018 …………………………………………………….

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

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

11

－

4 －

1. Qualitative Information Concerning Quarterly Consolidated Operating Results(1) Qualitative Information Concerning Consolidated Operating Results
During the consolidated nine-month period ended July 31, 2018, the employment situation improved becauseof strong corporate operating results, and Japan's economy maintained a gradual recovery trend, including
evident moves toward a recovery in personal consumption. At the same time, trade frictions between countries
intensified, and conditions that warranted close attention to the effects on Japan’s economy continued.
In the construction industry related to the Kanamoto Group, works related to restoration of the Tohoku region
are winding down but demand nevertheless remained brisk, supported by spending on public works projects,
corporate capital investment, and a modest increase in private sector spending, including expenditures forredevelopment projects in major metropolitan areas and energy-related facilities.
Given these conditions, the Kanamoto Group’s consolidated net sales for the nine-month period were
¥125,075 million, up 7.0% over the same period of the previous year. In terms of earnings, operating profit
increased 10.9% from the same period of the previous consolidated fiscal year to ¥13,415 million, ordinary profit
increased 9.7% year-on-year to ¥13,659 million, and third quarter year-to-date profit attributable to owners ofparent rose 5.2% year-on-year to ¥8,255 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 established its
first branch office and a large-scale integrated machine parts center in the Kyushu area, in order to expand andenlarge its domestic base of operations as regional differences emerge in the volume of construction works. This
enabled the Company to strengthen its organization to support related Group companies and improve groupsynergy. On the other hand, in addition to the enhancement of construction equipment for Shinkansen line
extension works and expressway maintenance and repair works, the Company focused on operating
improvements utilizing new systems and on the appropriate positioning of assets to increase the utilization of its
existing rental equipment.
Furthermore, within the Kanamoto Group we established a disaster task force to assist the quick recovery ofareas affected by heavy rains and flooding in western Japan, and continued to bolster our support systems fordisaster recovery and reconstruction activities in regions throughout Japan.
Used construction equipment sales were steady against the backdrop of an excellent market environment fromthe beginning of the period, as prices were pushed higher by growing demand in China and Southeast Asia.
As a result of these factors, net sales for Kanamoto’s construction-related businesses for the first nine monthsof the fiscal year increased 6.4% from the same period of the previous consolidated fiscal year to ¥112,063
million, and operating profit rose 12.7% year-on-year to ¥12,517 million.
< Other businesses >In the Company’s other businesses, steel products-related net sales, information and telecommunicationsrelated net sales and net sales in welfare-related businesses all expanded according to plan. Net sales rose
12.6% from the same period of the previous consolidated fiscal year to ¥13,011 million, while operating profit
declined 12.0% year-on-year to ¥608 million as a result of capital investments in conjunction with the Company’s
push into the Kanto area in its welfare-related operations.
(2) Qualitative Information Concerning Consolidated Financial Position
Assets, liabilities and net assets
Total assets at the end of the third quarter under review increased by ¥8,997 million compared with the end of
the prior consolidated fiscal year to ¥236,542 million. This mainly reflected an increase of ¥3,539 million in rental
equipment, an increase of ¥1,534 million in investment securities, and increase of ¥1,524 million in construction
machine parts, respectively and a decrease of ¥2,094 million in notes and accounts receivable-trade.

－5 －Total liabilities were ¥138,019 million, an increase of ¥2,263 million compared with the end of the priorconsolidated fiscal year. The principal items contributing to this change were an increase of ¥2,583 million in
long-term accounts payable-other, an increase of ¥1,453 in short-term loans payable and an increase of ¥805
million in accounts payable-other, respectively, and a decrease of ¥1,556 in income taxes payable.
Total net assets were ¥98,522 million, ¥6,733 million higher than at the end of the prior consolidated
accounting fiscal year. This was mainly because of profit attributable to owners of parent for the third quarter of¥8,255 million, and a decrease of ¥1,943 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 July 31, 201835,22037,057
4,069
200
583
288
12,193
706
1,237
−784
90,77235,99634,962
4,750
200
857
634
13,717
505
1,359
−763
92,218

198,879−125,211
73,66832,910−19,801
13,108
7,290−6,154
1,136
35,6232,170−1,421
749
124,286

204,014−126,806
77,20734,516−20,571
13,944
7,522−6,2781,243
36,566
2,638−1,5141,123
130,086

486
1,110
1,596

379
1,242
1,622

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

9,951
462
2,592
−392
12,614
144,323
236,542(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 July 31, 2018

28,773994
12,029
1,048
3,247
1,099
21,2693,060
71,521

28,6102,447
12,531
988
1,690
769
22,075
2,923
72,036

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

23,4071,870
39,711
−
257
435
300
65,982138,019

13,652
14,91657,172−2,12983,612

13,652
14,91663,483−2,12989,924

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

2,328
−0
109
4
2,442
6,155
98,522
236,542(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)(Unit: Millions of yen)
Nine months ended
July 31, 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
Reversal of allowance for doubtful accounts
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 andassociates
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 －Nine months ended
July 31, 2018

116,903
81,24735,65523,55812,097125,075
86,90038,17524,75913,415

2
136
56
129
32
291
649

13
155
61
－
21
334
586

169
－
128
297
12,449

83
88
170
342
13,659

22
13
5
174
217

6
－
12
0
18

107

87

28

－

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

157
44
290
13,388
4,370
125
4,496
8,892
636
8,255

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

8,445

8,892

136
0
−43
−1
92
8,537

−215
−0
24
−0
−192
8,699

7,933

8,068

604

630

(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)
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 Third quarter of the prior consolidated fiscal year (From November 1, 2016 to July 31, 2017)
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(See note)

105,351

11,551

116,903－－－

105,351

11,551

116,903

11,109691

11,800Net sales
Net sales to outside customers
Net sales or transfers between
related segments
Total
Segment profit

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

11,109691
297

Operating profit 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.

－

11 －

II Third quarter of the current consolidated fiscal year (From November 1, 2017 to July 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(See note)

112,063

13,011125,075－－－

112,063

13,011125,075

12,517608

13,126

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

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

12,517608
289

Operating profit reported on the Consolidated
Quarterly Statements of Income

13,415

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

－

12 －