This document is a translation of the Japanese financial statements and is not in conformity with accounting principles of the United States.

SENKO Group Holdings Co., Ltd.

Summary of Financial Statements for the First Quarter of the Fiscal Year Ending March 31, 2018
[Japan GAAP]
August 9, 2017
Name of Listed Company: SENKO Group Holdings Co., Ltd.
Stock Listed on: The First Section of the Tokyo Stock Exchange
Code Number:
9069
URL http://www.senkogrouphd.co.jp/en/
Representative:
Title: President
Name: Yasuhisa Fukuda
Inquiries:
Title: Executive Officer, Public Relations and IR
Name: Noburoh Sasaki
Tel. (06) 6440-5155
Scheduled Date of Issue of Financial Report:
August 14, 2017
Scheduled Date of Dividend Paid:−
None
Supplemental Information Materials:
None
Scheduled Date of Quarterly Information Meeting:
1. Consolidated Operating Results for the Three Months Ended June 30, 2017
(1) Consolidated Operating Results
Operating revenue
Million yen
119,605
110,287

Three months ended June 30, 2017
Three months ended June 30, 2016

%
8.4
3.7

Note: Amounts less than ¥1 million have been rounded down.
Profit attributable toOperating profit
Ordinary profit
owners of parent
Million yen%
Million yen%
Million yen
%
3,830
(7.9)
3,954
(2.3)
1,901
(9.3)
4,156
8.2
4,048
7.8
2,096
7.4

(Note) Comprehensive income
Three months ended June 30, 2017: ¥2,991 million (38.3%)
Profitper share

Three months ended June 30, 2016: ¥2,163 million (-30.5%)
Diluted profit
per share

Yen
12.54
14.66

Yen
11.63
13.79

Total assets
Million yen
300,344285,958

Net assets
Million yen
116,779
114,090Three months ended June 30, 2017
Three months ended June 30, 2016
(2) Consolidated Financial Position

As of June 30, 2017
As of March 31, 2017
(Reference) Shareholders’ equity:
As of June 30, 2017: ¥101,283 million

Equity ratio
%
33.7
35.1

Net assets per share
Yen
667.54661.61

As of March 31, 2017: ¥100,287 million

2. Dividends
June 30
Yen

September 30
Yen
11.00

−
Fiscal year ended March 31, 2017−
Fiscal year ending March 31, 2018
Fiscal year ending March 31, 2018
11.00
(Forecast)(Note) Change in the estimation of dividend for the fiscal year in this period: None

Annual dividend
December 31
YenMarch 31

Total

−

Yen
11.00

Yen
22.00

−

11.00

22.00

3. Forecast of Consolidated Operating Results for the Fiscal Year Ending March 31, 2018 (From April 1, 2017 to March 31, 2018)
Operating revenue
Million yen%
First half ending September 30, 2017
237,000
5.6
Fiscal year ending March 31, 2018
500,000
9.8(Note) Change in the forecast made in this period: None

Operating profit
Million yen%
7,700 (13.2)
18,000
5.4(Percentage figures represent year-on-year changes)
Profit attributable toProfitOrdinary profit
owners of parent
per share
Million yen% Million yen%
Yen
7,900 (9.6)
3,900(12.8)
25.73
18,300
5.8
9,900
10.6
65.31

Notes(1) Changes in significant subsidiaries during the period (Changes in specified subsidiaries associated with change in scope of
consolidation): None
(2) Use of accounting methods specifically for the preparation of the quarterly consolidated financial statements: None
(3) Changes in accounting principles and estimates, and retrospective restatement(a) Changes due to revision of accounting standards: None(b) Changes other than in (a): None(c) Changes in accounting estimates: None(d) Retrospective restatement: None
(4) Shares outstanding (Common shares)(a) Shares outstanding (including treasury shares)
As of June 30, 2017:

152,861,921 shares

As of March 31, 2017:

152,861,921 shares

1,134,337 shares

As of March 31, 2017:

1,279,937 shares(b) Treasury shares
As of June 30, 2017:(c) Average number of shares (quarterly consolidated cumulative period)
Three months ended June 30, 2017:

151,619,822 shares

Three months ended June 30, 2016:

142,979,415 shares(Note) Starting with the first quarter of the consolidated fiscal year ended March 31, 2015 (the three months ended June 30, 2014), thenumber of treasury shares at term-end includes Senko shares owned by the employee stock ownership plan (ESOP) trust,
following revisions to accounting principles due to the amendment of accounting standards. (As of March 31, 2017: 873,200
shares; as of June 30, 2017: 736,600 shares.)
Quarterly financial results reports are not required to be subjected to quarterly reviews.
Cautionary statement regarding forecasts of operating results and special notes
Forward-looking statements in these materials are based on information available to management at the time this report was prepared
and assumptions that management believes are reasonable. Actual results may differ significantly from these statements for a number ofreasons. For information about the assumptions used for forecasts and precautions concerning the use of forecasts, please see “Forecast
for the six-month period and the full-term of the fiscal year ending March 31, 2018” on page 3.

Index to accompanying materials

1．Results of Operations and Financial Condition ........................................................................................................................................ 2(1) Results of operations ......................................................................................................................................................................... 2(2) Financial condition ............................................................................................................................................................................. 3(3) Forecast for the six-month period and the full-term of the fiscal year ending March 31, 2018 ......................................................... 3
2．Consolidated Financial Statements ......................................................................................................................................................... 4(1) Consolidated balance sheets .............................................................................................................................................................. 4(2) Consolidated statements of (comprehensive) income ....................................................................................................................... 6
Consolidated statements of income
For the Three months ended June 30, 2016 and 2017 .................................................................................................................. 6
Consolidated statements of comprehensive income
For the Three months ended June 30, 2016 and 2017 .................................................................................................................. 7

1

1.

Results of Operations and Financial Condition(1) Results of operations
In the three-month period of the fiscal year ending March 31, 2018 (April 1, 2017 to June 30, 2017), the Japanese economy has been
recovering at a moderate pace amid improvement in consumer spending and capital expenditure brought about by factors that include
more upbeat corporate earnings and a better employment environment. Meanwhile, the global economy has also been on a path ofrecovery, yet the business outlook remains unpredictable amid uncertainties regarding potential economic effects of political risk inEurope and the U.S. and geopolitical risk in Asia.
In the logistics industry where our core business lies, freight volume has been heading toward recovery but the business environment
overall has remained challenging due to shortages of drivers and workers combined with increasing costs particularly with respect toexpenses for hiring vehicles and other outsourcing costs.
In this environment, the Company was renamed as “SENKO Group Holdings Co., Ltd.” in April, 2017, and transitioned to a holding
company structure. The Company categorized each of the Group companies into one of the five business domains of logistics, trading &commerce, living support, agriculture, and business support to strengthen Group alliances.
Moreover, having embarked on the “Senko Innovation Plan 2021 (SIP21)” five-year medium-term business plan beginning in April, we
have been working to create new services and products centering on our logistics and commercial distribution business geared toaccomplishing objectives set forth as part of our “Moving Global” corporate slogan.
The following provides an outline of our main activities in the first quarter of the current fiscal year.
In Japan, we have been forging ahead with efforts to expand our marine shipping business, which has involved adding NIPPON MARINE
CO., LTD. which engages in marine transport for the JX Nippon Mining & Metals Group, as well as with EIKICHI KAIUN CO.,LTD, to the
Senko Group in April. Also, in April we commenced operations of the Yokkaichi No. 2 PD Center (Yokkaichi City, Mie Prefecture) with theaim of fortifying our logistics functions in the Mie region, and in June we commenced operations of our Ranzan Logistics Center (Ranzan
Town, Saitama Prefecture) which engages in operations for major drug stores.
Meanwhile outside Japan, Singapore-based Skylift Consolidator (Pte) Ltd., which engages in the business of international air and marinetransport and other such operations, became a Group company in April. Going forward, we will take steps that involve upgrading ourlogistics network and strengthening our business infrastructure primarily in the ASEAN region.
Also, our overseas subsidiary established last year in Vietnam launched full-scale forwarding business operations in May serving
Japanese companies situated in the suburbs of Ho Chi Minh City, and we are proceeding with construction of logistics centers located in
the suburbs of Busan, South Korea and Hanoi City, Vietnam with the aim of commencing operations this fiscal year. We have also been
taking steps to enhance and expand our overseas business through efforts that included the establishment of an overseas subsidiary in
Vietnam in April by SMILE CORP. which engages in trading & commerce business operations.
In June, we received the Logistics Environment Special Award at the Japan Association for Logistics and Transport’s 18th Logistics
Environment Awards Ceremony, in recognition of three instances where we switched to the use of railroads and marine vessels, fromtrucks previously, for long-distance transport of apparel, housing, food and other items, with respect to shifting modes of transport with theaim of reducing environmental impact and addressing the driver shortage.

The three-month-period performance was as follows.
(Unit: Millions of yen)

Operating revenue
Operating profit
Ordinary profit
Profit attributable to owners ofparentThree months ended
June 30, 2016
110,287

Three months ended
June 30, 2017
119,605

9,317

8.4

4,156
4,048

3,830
3,954

(326)
(93)

(7.9)
(2.3)

2,096

1,901

(195)

(9.3)

Change%Consolidated operating revenue for the three-month period ended June 30, 2017 of the current fiscal year increased 8.4% year on year to¥119,605 million. This result mainly reflected the aggressive expansion of sales and the contribution of NIPPON MARINE CO., LTD. and
EIKICHI KAIUN CO.,LTD, which were made consolidated subsidiaries of the Company.
On the profit front, despite factors buoying profits brought about by sales expansion and moves to make NIPPON MARINE CO., LTD. andanother entity consolidated subsidiaries, consolidated operating profit decreased to ¥3,830 million, down 7.9% year on year, consolidated
ordinary profit decreased to ¥3,954 million, down 2.3% year on year, and profit attributable to owners of parent decreased to ¥1,901
million, down 9.3% year on year. The downturn in profits was largely attributable to factors that include higher costs due to rising fuel2

prices and actuarial differences in accounting for retirement benefit obligations, in addition to factors such as a decline in freight volumes
from existing customers and diminished demand in relation to the 2016 Kumamoto Earthquake.
The three-month-period operating revenue by segment was as follows.
Logistics
Operating revenue grew 8.4% year on year to ¥83, 823 million in this segment. This was mainly attributable to higher revenues generated
through the consolidation of NIPPON MARINE CO., LTD. and another entity, and was also a result of operating large facilities opened in
the previous fiscal year and having expanded sales to new and existing customers particularly with respect to major drug stores.
Trading & commerce
Operating revenue grew 7.4% year on year to ¥34,189 million in this segment. This was mainly attributable to higher revenues due toincreasing fuel prices along with expansion of sales to new customers, despite diminished demand in relation to the 2016 Kumamoto
Earthquake.
OthersOperating revenue rose 44.1% year on year to ¥1,592 million in this segment. This was mainly attributable to the growth of sales in thecall center business.
(2) Financial condition
Assets, liabilities and net assets
Total assets
Total assets as of June 30, 2017 were ¥300,344 million, ¥14,385 million higher than at the end of the previous fiscal year. Current assets
amounted to ¥106,860 million, down ¥1,838 million from the end of the previous fiscal year. This mainly reflected decreases of ¥1,117
million in cash and deposits and ¥285 million in notes and operating accounts receivable. Non-current assets totaled ¥193,406 million, up¥16,230 million from the end of the previous fiscal year. This was primarily due to increases of ¥14,361 million in property, plant andequipment, ¥900 million in intangible assets and ¥968 million in investments and other assets.
Liabilities
Liabilities as of June 30, 2017 increased ¥11,696 million from the end of the previous fiscal year to ¥183,564 million. Current liabilities
totaled ¥97,938 million, up ¥4,024 million from the end of the previous fiscal year. This was mainly due to an increase of ¥4,123 million in
short-term loans payable. Non-current liabilities totaled ¥85,625 million, up ¥7,672 million from the end of the previous fiscal year. Thiswas primarily due to an increase in long-term loans payable of ¥6,631 million.
Net assets
Net assets as of June 30, 2017 rose ¥2,689 million from the end of the previous fiscal year to ¥116,779 million. This was mainly
attributable to increases of ¥394 million in retained earnings, ¥256 million in valuation difference on available-for-sale securities, ¥239
million in remeasurements of defined benefit plans and ¥1,762 million in non-controlling interests. The equity ratio as of June 30, 2017
decreased by 1.4 percentage points to 33.7% from the end of the previous fiscal year.
(3) Forecast for the six-month period and the full-term of the fiscal year ending March 31, 2018
No revisions have been made to the forecast of consolidated operating results for the first half ending September 30, 2017 and the fiscal
year ending March 31, 2018, announced in “Summary of Financial Statements for the Fiscal Year Ended March 31, 2017” on May 11,
2017.

3

2.

Consolidated Financial Statements(1) Consolidated balance sheets(Unit: Millions of Yen)
As of March 31, 2017

As of June 30, 2017

AssetsCurrent assets
Cash and deposits

27,162

26,045

Notes and operating accounts receivable

61,97561,689Merchandise and finished goods

7,006

6,975

Work in process

305

443

Raw materials and supplies

292

512

11,978

11,210(21)(17)

108,699

106,860

Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings and structures, net

53,42055,071

Land

56,70057,575

Other, net

19,99331,828

Total property, plant and equipment

130,114

144,475

Goodwill

5,617

6,085

Other

4,086

4,519

Total intangible assets

9,704

10,605Investment securities

16,452

18,574

Net defined benefit asset

2,359

2,622

Guarantee deposits

11,197

11,202

Deferred tax assets

2,050

2,082

Other

6,322

4,857

Allowance for doubtful accounts(1,025)(1,013)

Total investments and other assets

37,35738,325

177,175

193,406

Business commencement expenses

83

76

Total deferred assets

8376

285,958

300,344

Intangible assets

Investments and other assets

Total non-current assets
Deferred assets

Total assets

4

(Unit: Millions of Yen)
As of March 31, 2017

As of June 30, 2017

Liabilities
Current liabilities
Notes and operating accounts payable−trade33,731

33,993

Electronically recorded obligations−operating

6,773

7,506

Short-term loans payable

25,63129,755

Income taxes payable

3,916

1,185

Provision for bonuses

4,228

3,430

Provision for directors’ bonuses

210

75

Provision for loss on disaster

96

-

Other

19,32721,991

Total current liabilities

93,914

97,938

Bonds payable

7,000

7,000

Convertible bond-type bonds with subscription rights
to shares

10,04910,047Long-term loans payable

42,483

49,115

Provision for directors’ retirement benefits

276

276

Provision for special repairs

37

66

Net defined benefit liability

7,087

7,136

Asset retirement obligations

817

823

Other

10,20011,160Total non-current liabilities

77,95385,625

171,868

183,564

Capital stock

26,52826,528

Capital surplus

25,411

25,397Retained earnings

48,65449,049Treasury shares

(657)

(507)

99,937

100,467

1,391

1,648

1

27

250

193

(1,293)(1,053)

350

815

Non-current liabilities

Total liabilities
Net assets
Shareholders’ equity

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
Subscription rights to shares

396

327

Non-controlling interests

13,40615,168

Total net assets

114,090

116,779

285,958

300,344

Total liabilities and net assets5(2) Consolidated statements of (comprehensive) income(Consolidated statements of income)(For the three months ended June 30, 2016 and 2017)(Unit: Millions of Yen)
Three months ended
June 30, 2016

Three months ended
June 30, 2017

(April 1, 2016–June 30, 2016)(April 1, 2017–June 30, 2017)

Operating revenue

110,287

119,605

Operating cost

98,031

106,970

Operating gross profit

12,256

12,635

Selling, general and administrative expenses

8,099

8,805

Operating profit

4,156

3,830

25

25

Non-operating income
Interest income
Dividend income

70

74

Other

269

453

Total non-operating income

364

553

Interest expenses

243

241

Other

229

187

Total non-operating expenses

473

429

4,048

3,954

Delinquency charges-

157

Total extraordinary income

-

157

-

269

68

-

Non-operating expenses

Ordinary profit
Extraordinary income

Extraordinary losses
Loss on office withdrawal
Expenses related to commemorative works forcentennial anniversary
Loss on disaster46-

Total extraordinary losses

114

269

3,933

3,842

Profit before income taxes
Income taxes−current

937

858

Income taxes−deferred

445

498

Total income taxes

1,382

1,357

Profit

2,550

2,485

454

584

2,096

1,901

Profit attributable to non-controlling interests
Profit attributable to owners of parent

6

(Consolidated statements of comprehensive income)(For the three months ended June 30, 2016 and 2017)(Unit: Millions of Yen)
Three months ended
June 30, 2016

Three months ended
June 30, 2017

(April 1, 2016–June 30, 2016)(April 1, 2017–June 30, 2017)

Profit

2,550

2,485

Valuation difference on available-for-sale securities

(204)

314

Deferred gains or losses on hedges

(108)

25

Foreign currency translation adjustment

(144)

(74)

69

241

(387)

506

2,163

2,991

1,736

2,365

426

625

Other comprehensive income

Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners ofparentComprehensive income attributable tonon-controlling interests

7