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 Second Quarter of the Fiscal Year Ending March 31, 2019
[Japan GAAP]

Name of Listed Company:
Code Number:
Representative:
Inquiries:

November 9, 2018
SENKO Group Holdings Co., Ltd.
Stock Listed on: The First Section of the Tokyo Stock Exchange
9069
URL http://www.senkogrouphd.co.jp/en/
Title: President
Name: Yasuhisa Fukuda
Title: Executive Officer, Public Relations and IR
Name: Noburoh Sasaki
Tel. (06) 6440-5155

Scheduled Date of Issue of Quarterly Financial Report:
Quarterly Supplemental Information Materials:
Scheduled Date of Quarterly Information Meeting:

November 14, 2018

Scheduled Date of Dividend Paid: December 4, 2018

Yes
Yes (for analysts)(Amounts less than ¥1 million have been rounded down)

1. Consolidated Operating Results for the Six Months Ended September 30, 2018
(1) Consolidated Operating Results (Cumulative)
Operating revenue
Six months ended September 30, 2018
Six months ended September 30, 2017

Million yen
260,339
242,300%
7.4
7.9(Percentage figures represent year-on-year changes)
Profit attributable toOperating profit
Ordinary profit
owners of parent
Million yen%
Million yen%
Million yen
%
9,108
14.0
9,368
16.7
5,616
29.1
7,991
(10.0)
8,025
(8.2)
4,351
(2.7)

(Note) Comprehensive income
Six months ended September 30, 2018: ¥6,033 million (–3.7%)
Profitper share

Six months ended September 30, 2017: ¥6,264 million (23.0%)
Diluted profit
per share

Yen
36.96
28.68

Yen
34.28
26.60

Total assets
Million yen
342,729
333,972

Net assets
Million yen
124,270
118,056

Six months ended September 30, 2018
Six months ended September 30, 2017(2) Consolidated Financial Position

As of September 30, 2018
As of March 31, 2018
(Reference) Shareholders’ equity:

As of September 30, 2018: ¥116,804 million

Equity ratio
%
34.1
33.7

Net assets per shareYen
769.27741.44As of March 31, 2018: ¥112,643 million

2. Dividends
June 30

September 30
Yen
11.00
13.00

Yen
Fiscal year ended March 31, 2018–
Fiscal year ending March 31, 2019–
Fiscal year ending March 31, 2019
(Forecast)(Note) Change in the estimation of dividend for the fiscal year in this period: None

Annual dividend
December 31
Yen––March 31

Total

Yen
11.00

Yen
22.00

13.00

26.00

3. Forecast of Consolidated Operating Results for the Fiscal Year Ending March 31, 2019 (From April 1, 2018 to March 31, 2019)
Operating revenue
Million yen%
Fiscal year ending March 31, 2019
530,000
7.7(Note) Change in the forecast made in this period: None

Operating profit
Million yen
19,300%12.9(Percentage figures represent year-on-year changes)
Profit attributable toProfitOrdinary profit
owners of parent
per share
Million yen% Million yen%
Yen
19,300 11.5
11,50021.0
75.70

Notes(1) Changes in significant subsidiaries during the period (Changes in specified subsidiaries associated with change in scope of
consolidation): Yes
Newly included: 1 company (Company name) M-Senko Logistics Co., Ltd.
(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 September 30, 2018:

152,861,921 shares

As of March 31, 2018:

152,861,921 shares

1,024,453 shares

As of March 31, 2018:

937,015 shares(b) Treasury shares
As of September 30, 2018:(c) Average number of shares (Cumulative)
Six months ended September 30, 2018: 151,958,664 shares

Six months ended September 30, 2017:

151,724,773 shares(Note) Starting with the first quarter of the fiscal year ended March 31, 2015, the number of treasury shares at term-end includes Senko
shares owned by the trust account of employee stock ownership plan (as of September 30, 2018: – shares; as of September 30,
2017: 589,000 shares), following revisions to accounting principles due to the amendment of accounting standards. Starting withthe third quarter of the fiscal year ended March 31, 2018, the number of treasury shares at term-end includes Senko shares ownedby the trust accounts of Performance-linked Stock Compensation Plan for Employees (as of September 30, 2018: 351,500 shares)
and Performance-linked Stock Compensation Plan for Directors (as of September 30, 2018: 353,000 shares).
Quarterly financial results reports are exempt from quarterly reviews conducted by certified public accountants or an audit corporation.
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 full-term of the fiscal year ending March 31, 2019” on page 4.

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 full-term of the fiscal year ending March 31, 2019................................................................................................... 4
2. Consolidated Financial Statements ........................................................................................................................................................... 5(1) Consolidated balance sheets .............................................................................................................................................................. 5(2) Consolidated statements of (comprehensive) income ....................................................................................................................... 7
Consolidated statements of income
For the six months ended September 30, 2017 and 2018 ............................................................................................................. 7
Consolidated statements of comprehensive income
For the six months ended September 30, 2017 and 2018 ............................................................................................................. 8(3) Consolidated statements of cash flows .............................................................................................................................................. 91

1.

Results of Operations and Financial Condition(1) Results of operations
In the six-month period of the fiscal year ending March 31, 2019 (April 1, 2018 to September 30, 2018), the Japanese economy has
been on a path of recovery despite adverse effects of natural disasters, due to factors that include improvement in the employment andincome environment as well as corporate earnings. Meanwhile, the overseas economy has been continuing to mount a modest
recovery on the whole, despite concerns that include uncertainty regarding political measures of respective nations and trade friction
triggered by U.S. trade policy.
In the logistics industry where our core business lies, a harsh business environment continued due mainly to labor shortages and therise in fuel prices. Freight volume, however, has been following a path of recovery, particularly for consumer-related andproduction-related cargo despite the effect from natural disasters.
In this environment, the Senko Group has been working to expand its business areas, upgrade its operating system and strengthen its
earnings capacity, as the second year of “Senko Innovation Plan 2021 (SIP21)” five-year medium-term business plan.
The following provides an outline of our main activities in the six-month period.
To expand its business areas, SENKO Co., Ltd. commenced operations of Higashi Fuji PD Center (Fuji City, Shizuoka Prefecture) in
April, Nagareyama Logistics Center (Nagareyama City, Chiba Prefecture) in May, and Koga PD Center (Koga City, Ibaraki Prefecture)
and Kazo PD Center Warehouse No. 2 (Kazo City, Saitama Prefecture) in August.
The Kazo PD Center Warehouse No. 2 is the first three-temperature-zone center operated jointly by SENKO Co., Ltd. and Runtec
Corporation. The total floor area of the Kazo PD Center, including the existing warehouse, amounts to 103,000 m², making it one of the
Senko Group’s largest logistics facilities.
In April, Runtec Corporation commenced operations of its Osaka Branch Nanko Center (Osaka City), and expanded its Fukuoka
Branch Center (Fukuoka City).
Outside Japan, in May SHANGHAI SENKO INTERNATIONAL FREIGHT FORWARDING INC. commenced operations of its Qingpu
Logistics Center (Shanghai, China). Moreover, we have been working to strengthen operations in the ASEAN region, having madeThailand-based Best Global Logistics Co., Ltd., which engages in the business of air and marine transport and other such operations, aGroup company in September.
To upgrade our operating system, we have been actively moving ahead with labor-saving and mechanization initiatives in our
distribution centers by adopting the latest technologies such as robotic arms and unmanned forklifts. In order to further accelerate suchinitiatives going forward, in April we set up the AI Project and the Robotics Project, both promoting R&D and other such endeavors. Alsoin July, we established innovatech studio Co., Ltd., which develops next-generation technologies and engages in system sales.
Moreover, having succeeded SENKO Co., Ltd.’s marine shipping business, Senko Line Co., Ltd. started business operations in April,
and aims to expand the marine shipping business.
With respect to our modal shift initiatives, in June we received the Logistics Environment Grand Prix Award (the highest Logistics
Environment Award) and three Logistics Environment Special Awards from the Japan Association for Logistics and Transport inrecognition of our four initiatives that include switching from the previous use of trucks to the use of railroads and marine vessels forlong-distance transport of beverage, chemical product, food, housing material and other items.
To strengthen our earnings capacity, we worked on streamlining back office operations, improving productivity at distribution sites andother initiatives.
The six-month-period performance was as follows.
(Unit: Millions of Yen)

Operating revenue
Operating profit
Ordinary profit
Profit attributable to owners ofparentSix months ended
September 30, 2017242,300

Six months ended
September 30, 2018260,339

18,039

7.4

7,991
8,025

9,108
9,368

1,117
1,343

14.0
16.7

4,351

5,616

1,265

29.1

Change%Consolidated operating revenue for the six-month period ended September 30, 2018 of the current fiscal year increased 7.4% year on
year to ¥260,339 million despite adverse effects of natural disasters. This result mainly reflected effects of expanding sales and revising
the freight charges, year-on-year differences arising with respect to ANZEN YUSO CO., LTD. and OKUMURA CO., LTD. which became
consolidated subsidiaries in the previous fiscal year, and furthermore moves taken since April this year to make operating companies ofliving support services into consolidated subsidiaries (KEIHANNA helper station Co., Ltd., VENUS CO., LTD., BLUE EARTH JAPANCo., Ltd., etc.).
On the profit front, despite factors that include higher costs largely stemming from rises in outsourcing costs and increases in fuel prices,2

consolidated operating profit increased to ¥9,108 million, up 14.0% year on year, and consolidated ordinary profit increased to ¥9,368
million, up 16.7% year on year. The upturn in profits was largely attributable to positive effects on profits brought about by expanding
sales, revising freight charges and making entities into consolidated subsidiaries, and furthermore due to the decrease in the amountamortized for actuarial differences in accounting for retirement benefit obligations. Profit attributable to owners of parent increased to¥5,616 million, up 29.1% year on year, partially as a result of having made Runtec Corporation and other entities into wholly owned
subsidiaries.
The six-month-period operating revenue by segment was as follows.
Logistics
Operating revenue grew 8.0% year on year to ¥184,044 million in this segment, despite adverse effects of natural disasters. This was
mainly attributable to higher revenues generated by large facilities opened in the previous fiscal year, expansion of sales to new
customers with respect to daily-use items, food products, apparel, and chemical products, effects of revising the freight charges, andyear-on-year differences related to the timing of consolidation of ANZEN YUSO CO., LTD.
Trading & commerce
Operating revenue grew 2.7% year on year to ¥70,427 million in this segment. This was attributable to higher revenues mainly fromtrade operations and sales of petroleum products, and also due to year-on-year differences related to the timing of consolidation of
OKUMURA CO., LTD.
OthersOperating revenue rose 78.3% year on year to ¥5,868 million in this segment. This was mainly attributable to higher revenues due tothe consolidation of operating companies of living support services.
(2) Financial condition
1) Assets, liabilities and net assets
Total assets
Total assets as of September 30, 2018 were ¥342,729 million, ¥8,756 million higher than at the end of the previous fiscal year.
Current assets amounted to ¥119,773 million, up ¥5,625 million from the end of the previous fiscal year. This mainly reflected increasesof ¥1,753 million in cash and deposits, ¥704 million in notes and operating accounts receivable and ¥2,031 million in securities.
Non-current assets totaled ¥222,909 million, up ¥3,143 million from the end of the previous fiscal year. This was primarily due toincreases of ¥2,286 million in property, plant and equipment, ¥291 million in intangible assets and ¥565 million in investments and otherassets.
Liabilities
Liabilities as of September 30, 2018 increased ¥2,542 million from the end of the previous fiscal year to ¥218,458 million.
Current liabilities totaled ¥110,363 million, up ¥4,314 million from the end of the previous fiscal year. This was mainly due to an increaseof ¥7,531 million in short-term loans payable, despite decreases of ¥1,639 million in notes and operating accounts payable-trade and¥1,073 million in income taxes payable.
Non-current liabilities totaled ¥108,095 million, down ¥1,771 million from the end of the previous fiscal year. This was primarily due to adecrease in long-term loans payable of ¥2,076 million.
Net assets
Net assets as of September 30, 2018 rose ¥6,213 million from the end of the previous fiscal year to ¥124,270 million. This was mainly
attributable to increases of ¥3,672 million in retained earnings and ¥2,000 million in non-controlling interests. The equity ratio as of
September 30, 2018 increased by 0.4 percentage points to 34.1% from the end of the previous fiscal year.
2) Cash flows
Cash and cash equivalents as of September 30, 2018 decreased by ¥290 million from the end of the previous fiscal year to ¥23,504
million.
Net cash provided by operating activities amounted to ¥9,335 million. This was mainly due to profit before income taxes of ¥9,166
million and depreciation of ¥7,003 million, despite a ¥993 million decrease in cash from an increase in notes and accounts
receivable-trade, a ¥1,530 million decrease in cash from a decrease in notes and accounts payable-trade and income taxes paid of¥4,631 million.
Net cash used in investing activities totaled ¥13,133 million. This was mainly due to payments into time deposits of ¥3,042 million,
purchase of securities of ¥2,080 million, purchase of property, plant and equipment of ¥16,293 million and purchase of shares ofsubsidiaries and associates of ¥1,146 million, despite proceeds from sales of property, plant and equipment of ¥9,244 million.
Net cash provided by financing activities totaled ¥2,486 million. This was mainly due to net increase in short-term loans payable of3¥5,316 million, proceeds from long-term loans payable of ¥2,311 million and proceeds from share issuance to non-controllingshareholders of ¥2,305 million, despite a repayment of long-term loans payable of ¥3,359 million, repayments of finance leaseobligations of ¥1,979 million and cash dividends paid of ¥1,697 million.
(3) Forecast for the full-term of the fiscal year ending March 31, 2019
No revisions have been made to the forecast of consolidated operating results for the fiscal year ending March 31, 2019, announced in“Summary of Financial Statements for the Fiscal Year Ended March 31, 2018” on May 10, 2018.

4

2.

Consolidated Financial Statements(1) Consolidated balance sheets(Unit: Millions of Yen)
As of March 31, 2018

As of September 30, 2018

AssetsCurrent assets
Cash and deposits

24,99526,749Notes and operating accounts receivable

70,526

71,231

–

2,031

7,293

7,514

Work in process

351

645

Raw materials and supplies

536

571

10,46011,047(16)(17)

114,148

119,773

Buildings and structures, net

55,04564,740

Securities
Merchandise and finished goods

Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Land59,61359,227

Other, net

45,41138,389Total property, plant and equipment

160,071

162,357

Intangible assets
Goodwill

6,522

6,740

Other

4,225

4,298

Total intangible assets

10,747

11,038Investments and other assets
Investment securities

22,642

21,910Long-term loans receivable

3,709

3,268

Net defined benefit asset

3,658

3,970

Guarantee deposits

12,11812,886

Deferred tax assets

4,317

4,201

Other

3,718

3,975

Allowance for doubtful accounts(1,216)(698)

Total investments and other assets

48,94749,513219,766

222,909

Business commencement expenses

57

45

Total deferred assets

57

45

333,972

342,729

Total non-current assets
Deferred assets

Total assets

5

(Unit: Millions of Yen)
As of March 31, 2018

As of September 30, 2018

Liabilities
Current liabilities
Notes and operating accounts payable-trade37,41835,779

Electronically recorded obligations-operating

7,189

7,083

Current portion of bonds

48

48

Short-term loans payable

29,35136,883

Lease obligations

3,073

3,011

Income taxes payable

4,509

3,435

Provision for bonuses

4,625

5,340

Provision for directors’ bonuses

197

152

Provision for loss on disaster

–

267

Other

19,634

18,360Total current liabilities

106,048

110,363

Bonds payable

17,16817,144

Convertible bond-type bonds with share acquisitionrights10,03910,034Long-term loans payable

63,232

61,155

Lease obligations

7,342

7,662

Provision for directors’ retirement benefits

159

155

Provision for special repairs

82

69

Net defined benefit liability

6,901

6,683

Asset retirement obligations

819

912

4,120

4,277

109,866

108,095

215,915

218,458

26,52826,528Non-current liabilities

Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus

29,73030,006

Retained earnings

54,96858,641

Treasury shares

(590)

(697)

110,637

114,477

1,775

2,018

Deferred gains or losses on hedges

(61)

18

Foreign currency translation adjustment

334

142

Remeasurements of defined benefit plans

(42)

147

2,005

2,326

Share acquisition rights

373

424

Non-controlling interests

5,040

7,040

118,056

124,270

333,972

342,729

Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities

Total accumulated other comprehensive income

Total net assets
Total liabilities and net assets

6

(2) Consolidated statements of (comprehensive) income(Consolidated statements of income)(For the six months ended September 30, 2017 and 2018)(Unit: Millions of Yen)
Six months ended
September 30, 2017

Six months ended
September 30, 2018

(April 1, 2017–September 30, 2017)(April 1, 2018–September 30, 2018)

Operating revenue

242,300

260,339

Operating cost

217,093232,038

Operating gross profit

25,20728,301

Selling, general and administrative expenses

17,21619,192

Operating profit

7,991

9,108

Interest income

43

57

Dividend income

89

93

Other

789

1,041

Total non-operating income

922

1,192

Interest expenses

476

561

Other

413

371

Total non-operating expenses

889

932

8,025

9,368

–

1,156

110

365

–

40

Delinquency charges

157–

Gain on sales of investment securities

66–

Total extraordinary income

334

1,563

Loss on reduction of non-current assets

–

1,144

Provision for loss on disaster–

267

Loss on liquidation of subsidiaries–

168

Loss on office withdrawal

311

96

Loss on retirement of non-current assets

109

87

Total extraordinary losses

420

1,765

Profit before income taxes

7,939

9,166

Income taxes-current

2,410

3,381

Income taxes-deferred

131

(21)

Total income taxes

2,542

3,359

Profit

5,396

5,806

Profit attributable to non-controlling interests

1,044

189

Profit attributable to owners of parent

4,351

5,616

Non-operating income

Non-operating expenses

Ordinary profit
Extraordinary income
Subsidy income
Gain on sales of non-current assets
Reversal of allowance for doubtful accounts for
subsidiaries and associates

Extraordinary losses

7

(Consolidated statements of comprehensive income)(For the six months ended September 30, 2017 and 2018)(Unit: Millions of Yen)
Six months ended
September 30, 2017

Six months ended
September 30, 2018

(April 1, 2017–September 30, 2017)(April 1, 2018–September 30, 2018)

Profit

5,396

5,806

Valuation difference on available-for-sale securities

390

268

Deferred gains or losses on hedges

3682

Foreign currency translation adjustment

(42)

(313)

Remeasurements of defined benefit plans, net of tax

483

190

Total other comprehensive income

868

227

6,264

6,033

Comprehensive income attributable to owners ofparent

5,177

5,938

Comprehensive income attributable tonon-controlling interests

1,087

95

Other comprehensive income

Comprehensive income
Comprehensive income attributable to8

(3) Consolidated statements of cash flows(Unit: Millions of Yen)
Six months ended
September 30, 2017

Six months ended
September 30, 2018

(April 1, 2017–September 30, 2017)(April 1, 2018–September 30, 2018)

Cash flows from operating activities
Profit before income taxes

7,939

9,166

Depreciation

5,817

7,003

Loss (gain) on sales of non-current assets

(102)

(349)

Loss on retirement of non-current assets

109

87

Loss on reduction of non-current assets

–

1,144

Subsidy income–(1,156)

Loss on liquidation of subsidiaries–

168

Decrease (increase) in net defined benefit asset

136

(29)

Increase (decrease) in net defined benefit liability

(78)

(229)

Increase (decrease) in provision for bonuses

493

676

Increase (decrease) in provision for loss on disaster

(96)

267

Interest and dividend income

(133)

(150)

Interest expenses

476

561

(4,101)

(993)

247

(547)

1,257

(1,530)

Increase (decrease) in accrued consumption taxes

711(1,223)

Decrease (increase) in consumption taxes refund
receivable

(750)

1,815

Other

839

(606)

Subtotal

12,765

14,074

Decrease (increase) in notes and accounts
receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts
payable-trade

Interest and dividend income received

271

139

Interest expenses paid

(487)

(558)

Proceeds from subsidy income

1,252

310

Income taxes paid

(3,071)(4,631)

Net cash provided by (used in) operating activities

10,731

9,335

Payments into time deposits–(3,042)

Purchase of securities–(2,080)Purchase of property, plant and equipment(13,724)(16,293)

Proceeds from sales of property, plant and equipment

10,493

9,244

Purchase of investment securities

(33)

(38)

Proceeds from sales of investment securities

145

80

Purchase of shares of subsidiaries resulting in change
in scope of consolidation(1,375)–Purchase of shares of subsidiaries and associates(4,153)(1,146)

Payments for investments in capital of subsidiaries
and associates(1,082)

(1)

(998)

143

(10,728)(13,133)

Cash flows from investing activities

Other
Net cash provided by (used in) investing activities

9Six months ended
September 30, 2017

Six months ended
September 30, 2018

(April 1, 2017–September 30, 2017)(April 1, 2018–September 30, 2018)

Cash flows from financing activities
Net increase (decrease) in short-term loans payable

3,862

5,316

Proceeds from long-term loans payable

8,092

2,311

Repayment of long-term loans payable(9,184)(3,359)

Repayments of finance lease obligations(1,599)(1,979)

–

(24)

209

–

–

2,305

(1,675)(1,697)

(124)

(72)

–

(169)

Other

(503)

(144)

Net cash provided by (used in) financing activities

(922)

2,486

Effect of exchange rate change on cash and cash
equivalents

(17)

(73)

Net increase (decrease) in cash and cash equivalents(937)(1,384)

Cash and cash equivalents at beginning of period

26,197

23,795

Increase in cash and cash equivalents from newly
consolidated subsidiary

55

1,093

25,31423,504

Redemption of bonds
Proceeds from sales of treasury shares
Proceeds from share issuance to non-controllingshareholders
Cash dividends paid
Dividends paid to non-controlling interests
Payments from changes in ownership interests in
subsidiaries that do not result in change in scope of
consolidation

Cash and cash equivalents at end of period10