Six-month Consolidated Financial Report for the Fiscal Year ending
October 31, 2015 [Japan GAAP]
June 5, 2015
Listed Company Name
Kanamoto Co., Ltd.
Company Code Number
9678
Listing Exchanges
Tokyo Stock Exchange, Sapporo Stock Exchange(URL
http://www.kanamoto.co.jp)
Representative
Kanchu Kanamoto
President and CEO
Nobuhito Utatsu
Inquiries
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 11, 2015
Scheduled date for commencement of dividend payments
July 7, 2015
Preparation of Quarterly Settlement Supplementary
Yes
Explanatory Materials
Quarterly Earnings Briefings
Yes(For institutional investors and analysts)
1. Operating Results for the Six-Month Period of the Fiscal Year Ending October 31, 2015
(November 1, 2014 - April 30, 2015)(1) Consolidated operating results (Cumulative)(Numbers less than one million yen have been rounded down)(Percentages shown are the percent increase or decrease compared to the prior consolidated fiscal year)

Net Sales
Millions of yen

Operating Income

Ordinary Income

Millions of yen%

Millions of yen%

Millions of yen%

10,652

5.8

10,655

8.1

6,528

15.5

10,072

49.2

9,860

46.9

5,651

52.1

%

Fiscal Year ending October 31,
68,307
6.4
2015: Second quarter
Fiscal Year ended October 31,
64,212 17.3
2014: Second quarter(Note) Comprehensive income (millions of yen)
Fiscal Year Ending October 31, 2015, Second Quarter
Fiscal Year Ended October 31, 2014, Second Quarter
Net Income per
Share
Fiscal Year ending October 31,
2015: Second quarter
Fiscal Year ended October 31,
2014: Second quarter

Net Income

7,283 (16.9%)
6,228 (19.5%)
Net Income per
Share on a Fully
Diluted Basis

Yen

Yen

181.14－156.82－(2) Consolidated financial position
Total Assets
Fiscal Year ending October 31,
2015: Second quarter
Fiscal Year ended October 31,
2014:

Net Assets

Equity Ratio

Millions of yen

Millions of yen%

201,700

72,062

34.5

188,491

65,513

33.6(Reference) Equity(millions of yen)
Fiscal Year Ending October 31, 2015 Second Quarter:
Fiscal Year Ended October 31, 2014

69,661
63,365－1－2. Dividends

Fiscal year ended October 31, 2014
Fiscal year ending October 31, 2015
Fiscal Year ending October 31, 2015 (Projected)

End of 1Q
Yen－－

Annual Dividends per Share
End of 2Q End of 3Q
Year-end
Yen
Yen
Yen
15.00
－
20.00
15.00
－
15.00

(Notes) 1. Has the Company revised its most recently released dividend projection:

Total
Yen
35.00
30.00

No

2. Breakdown of interim dividend for the Fiscal Year ended October 31, 2014
Ordinary dividend 10.00 yen
Commemorative dividend 5.00 yen
Breakdown of planned year-end dividend for the fiscal year ended October 31, 2014
Ordinary dividend 10.00 yen
Commemorative dividend 10.00 yen
3. Projected Consolidated Operating Results for the Fiscal Year ending October 2015
(November 1, 2014 - October 31, 2015)(Percentages indicate percent change from prior consolidated fiscal year)

Net Sales

Full year

Operating Income

Ordinary Income

Net Income
per Share

Net Income

Millions of yen%

Millions of yen%

Millions of yen%

Millions of yen%

Yen

128,600

2.4

16,9603.1

16,610

3.3

9,520

2.4

264.16(Note) Has the Company revised its most recently released projected consolidated operating results during the quarter:
No

－

2

－

Notes(1) Were there changes to material subsidiaries during the period under review (transfer of specified subsidiaries in
conjunction with revisions to the scope of consolidation) : No
Company newly included―
Company newly excluded―(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: No(d) Retrospective restatements: No(4) Number of shares issued (common stock)(a) Number of shares outstanding at the end of the period (including treasury stock)
Fiscal year ending October 31, 2015 Second Quarter
36,092,241 sharesFiscal year ended October 31, 2014
36,092,241 shares(b) Number of shares of treasury stock at the end of the period
Fiscal year ending October 31, 2015 Second Quarter
52,930 sharesFiscal year ended October 31, 2014
52,930 shares(c) Average number of shares during the period (consolidated year-to-date)Fiscal year ending October 31, 2015 Second Quarter
36,039,311 sharesFiscal year ended October 31, 2014 Second Quarter
36,040,030 shares

Note: Disclosure concerning status of implementation of quarterly review procedure
This quarterly earnings report is exempt from the quarterly review procedure based on the Financial Instruments
and Exchange Act. At the time of disclosure of this quarterly earnings report, the Company has not completed thequarterly review procedure for quarterly financial statements.
Note: Explanation concerning appropriate use of the projected operating results and other items to note
Note Concerning Forward-Looking Statements
The above projections were prepared based upon information available to the Company at the time the projections
were announced as well as various assumptions concerning the future economic and business environment. Actual
operating results may differ from the projected figures depending upon various factors in the future. Please refer to“1. Qualitative Information Concerning Quarterly Consolidated Operating Results (3) Qualitative Information
Concerning Projected Consolidated Operating Results” on Page 6 of the Attachments for the conditions used asassumptions for the projected operating results and matters to note before using the projected operating results.
(Revision of unit for presentation of amounts)
In past years the Company reported amounts in its quarterly consolidated financial statements in thousands of yen.
Beginning from the end of the prior consolidated fiscal year, the Company has revised its reporting convention tomillions of yen. To facilitate comparison, the amounts for the second quarter interim consolidated financial
statements of the prior consolidated fiscal year also have been restated in units of millions of yen.

－

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) Qualitative Information Concerning Projected Consolidated Operating Results ……………………………….

6

2. Matters Concerning Summary Information (Notes) ……………………………………………………………………

6

3. Quarterly Consolidated Financial Statements ………………………………………………………………………….

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, 2015 ………………………………………………………….

9

9

Quarterly Consolidated Statements of Comprehensive Income
Consolidated Interim Period ended April 30, 2015 ………………………………………………………….

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

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

13

－

4

－

1. Qualitative Information Concerning Quarterly Consolidated Operating Results(1) Qualitative Information Concerning Consolidated Operating Results[ Management Environment (from November 1, 2014 to April 30, 2015) ]During the first two quarters of Kanamoto’s current consolidated fiscal year, Japan’s economy followed agradual recovery trajectory as corporate earnings improved and the employment situation brightened as well,
supported by a weaker yen and the continuing rise in stock prices against the backdrop of proactive economic
and monetary policy measures.
[ Second Quarter Operating Results (from November 1, 2014 to April 30, 2015) ]In the construction industry related to the Kanamoto Group, activities ranging from public investment toprograms such as earthquake disaster recovery works and disaster prevention measures remained robust.
Viewed nationally, however, activity slowed somewhat compared with the environment one year ago, which
benefited from the implementation of a supplementary budget. In addition, private sector capital spending
exhibited upward momentum because of the improvement in corporate performance. Nevertheless, the industry
continued to struggle with a variety of problems, including increased labor costs because of a shortage of
construction workers, ongoing glitches in project bidding because of the jump in materials prices, and a backlog
of projects on which ground has still not been broken.
In light of these circumstances, the Kanamoto Group continued to focus on critical items, working to strengthen
its business structure for the future and improve its financial position, based on the various measures in its
Medium- term Management Plan (fiscal 2014 - fiscal 2016). With regard to its overseas strategy, which takes afar-sighted view of changes in construction markets, the Group proceeded aggressively with business measuresthat will ensure earnings opportunities for the future, including moves to newly establish joint venture companies
in Thailand, Vietnam and the Philippines.
As a result, consolidated net sales for the interim period were ¥68,307 million, up 6.4% compared with thesame period of the previous consolidated fiscal year. In terms of earnings, operating income expanded 5.8%
from the same period of the previous consolidated fiscal year to ¥10,652 million, ordinary income rose 8.1%
year-on-year to ¥10,655 million, and interim period net income increased 15.5% year-on-year to ¥6,528 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 main business, in addition to full-scale earthquake
reconstruction efforts, construction equipment rental demand remained brisk, centered primarily on disasterprevention works and infrastructure-related projects.
To meet this growth in demand, Kanamoto continued to proactively undertake capital investments, and worked
to maintain and improve its asset utilization ratios by taking steps such as transferring construction equipment to
the Tohoku Region, where demand remains at a high level.
Used construction equipment sales were up 53.9% year-on-year, as Kanamoto pursued sales of equipment
assets based on its initial plan, in order to maintain an appropriate asset portfolio.
As a result of the above factors, consolidated net sales for the interim period for Kanamoto’s constructionrelated businesses expanded 5.9% from the same period of the prior consolidated fiscal year to ¥64,012 million,
and operating income was up 5.3% year-on-year to ¥10,344 million.
< Other businesses >In the Company’s other businesses, steel products-related sales expanded substantially more than initiallyenvisaged, driven by the recovery in private sector demand. Net sales rose 14.1% from the same period of theprior consolidated fiscal year to ¥4,295 million, and operating income climbed 49.9% year-on-year to ¥119 million.
< Change in number of branches >The Company did not open any new branches or close any branches during the interim period consolidated
accounting period.
－

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 ¥13,209 million compared with the endof the prior consolidated fiscal year to ¥201,700 million. This mainly reflected an increase of ¥3,712 million in
cash and deposits from the steady collection of receivables, and an increase of ¥6,334 million in rental
equipment, respectively.
Total liabilities were ¥129,638 million, an increase of ¥6,660 million compared with the end of the priorconsolidated fiscal year. The principal items contributing to this change were an increase of ¥1,635 million inaccounts payable-other and an increase of ¥5,120 million in long-term accounts payable-other.
Total net assets were ¥72,062 million, ¥6,548 million higher than at the end of the prior consolidated fiscal year.
This was mainly because of the net income reported for the interim period of ¥6,528 million.
(3) Qualitative Information Concerning 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, 2014 (Japan GAAP) released on December 10, 2014.

2. Matters Concerning Summary Information (Notes)(Supplemental information)
Effect of the change in the corporate tax rate etc.
The Act to Partially Amend the Income Tax Law, Etc. (Act No. 9 of 2015) and the Act to Partially Amend the Local
Tax Law (Act No. 2 of 2015) were promulgated on March 31, 2015. As a result, commencing from the consolidated
fiscal year that begins on or after April 1, 2015, the corporate tax rate will be lowered. In conjunction with thischange, the normal effective statutory tax rate used for the calculation of deferred tax assets and deferred tax
liabilities is expected to be lowered, from the 35.3% rate used in the past, to 32.8% for the temporary difference
forecast to be cancelled in the consolidated fiscal year that begins on November 1, 2015, and to 32.0% for the
temporary difference forecast to be cancelled in the consolidated fiscal year that begins on November 1, 2016,
respectively.
As a result of having applied this normal effective statutory tax rate, total deferred tax assets (amount after the
deduction of total deferred tax liabilities) decreased by ¥39 million, and income taxes-deferred increased by ¥76
million and the valuation difference on available-for-sale securities increased by ¥116 million, respectively.

－

6

－

3. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(Unit: Millions of yen)
Prior Consolidated
Fiscal Year(As of October 31, 2014)

Current Consolidated
Fiscal Year Interim Period(As of April 30, 2015)

31,65033,651
350
595
50
227
6,566
43
656
515
－227
74,08035,36233,851
350
836
36
260
7,482
84
699
486
－229
79,221

150,727－85,083
65,644
23,691－15,663
8,027
5,541－4,882659
31,4591,563－1,013549
106,341

161,333－89,354
71,97923,839－15,904
7,935
5,547－4,857690
31,8052,366－1,066
1,299
113,710

57
208
266

54
200
255

6,286
265
1,854
－491
－110
7,804
114,411
188,491

6,974
285
1,894
－530
－110
8,513
122,479
201,700

AssetsCurrent assets
Cash and deposits
Notes and accounts receivable-trade
Securities
Merchandise and finished goods
Costs on uncompleted construction contracts
Raw materials and supplies
Construction machine parts
Consumption taxes receivable
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
Allowance for investment loss
Total investments and other assets
Total non-current assets
Total Assets

－

7

－

(Unit: Millions of yen)
Prior Consolidated
Fiscal Year(As of October 31, 2014)

Current Consolidated
Fiscal Year Interim Period(As of April 30, 2015)

23,134612
11,883
995
3,729
850
16,4602,988
60,65523,598627
12,668
1,622
4,065
1,005
18,0962,122
63,807

21,6982,082
37,85316
231
440
62,322
122,978

20,001
2,048
42,97321244
542
65,831
129,638

13,652
14,91632,860－56
61,373

13,652
14,916
38,667－56
67,180

1,977
14
1,992
2,147
65,513
188,491

2,445
35
2,481
2,400
72,062201,700

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
Foreign currency translation adjustment
Total accumulated other comprehensive income
Minority 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 Interim Period ended April 30,2015)(Unit: Millions of yen)
Prior Consolidated Fiscal
Current Consolidated
Year Interim Period
Fiscal Year Interim Period(From November 1, 2013 (From November 1, 2014
to April 30, 2014)
to April 30, 2015)
64,21268,30742,70645,746
21,506
22,561
11,434
11,908
10,072
10,652

Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating income
Non-operating income
Interest income
Dividend income
Insurance income
Rent income
A receipt bonus
Foreign exchange gains
Other
Total non-operating income
Non-operating expenses
Interest expenses
Loss on sales of notes payable
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on sales of non-current assets
Subsidy income
Compensation income for damage
Other
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on revision of retirement benefit plan
Total extraordinary losses
Income before income taxes and minority interests
Income taxes-current
Income taxes-deferred
Total income taxes
Income before minority interests
Minority interests in income
Net income

－

9

－

4
23
24
30
41
67
135
327

4
27
16
35
23
143
106
357

329
22
187
539
9,860

260
10
83
354
10,655

31
0
－
0
31

7
3
118
－
128

18
43
61
9,830
3,920
－160
3,759
6,070
418
5,651

49
－
49
10,735
3,979
－34
3,945
6,790
262
6,528

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Interim Period ended April 30)(Unit: Millions of yen)

Income before minority interests
Other comprehensive income
Valuation difference on available-for-sale securities
Foreign currency translation adjustment
Total other comprehensive income
Quarter comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to minority interests－

10

Prior Consolidated Fiscal
Current Consolidated
Year Interim Period
Fiscal Year Interim Period(From November 1, 2013 (From November 1, 2014
to April 30, 2014)
to April 30, 2015)
6,070
6,790

－

161
－3
158
6,228

467
25
493
7,283

5,809
418

7,017
266

(3) Quarterly Consolidated Statements of Cash Flows(Unit: Millions of yen)
Prior Consolidated Fiscal
Current Consolidated
Year Interim Period
Fiscal Year Interim Period(From November 1, 2013 (From November 1, 2014
to April 30, 2014)
to April 30, 2015)
Cash flows from operating activities
Income before income taxes and minority interests
Depreciation
Amortization of goodwill
Loss (gain) on sales and retirement of non-current
assets
The amount of assets buy on the installment planpurchase for small rentals
The amount of cost price transfer with the construction
machine parts sale
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
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in allowance for investment loss
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for retirement benefits
Increase (decrease) in allowance for losses on
employee pension fund withdrawal
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)
Compensation income for damage
Loss on revision of retirement benefit plan
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
Compensation for damage 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
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

－

9,830
8,633
18

10,735
10,172
7

－13

41

0

－

4

3

475

616

－315
－980
－3
42
125
4

－78
－418
17
－
154
－

－200

－

－
－27

4
－32

170

194

329
－73
－
43

260
－103
－118
－

602

－118

－160

－257

948

237

1,386
－330
20,51227－－508－3,362
16,668900－668
21,55132
118－460－3,643
17,596－340－2,075
32
－20
－103
0
－
－
－5
78
－21
－2,456－－1,680
15
－15
－28
－
－72
－54
－
1
－8
－1,842

(Unit: Millions of yen)
Prior Consolidated Fiscal
Current Consolidated
Year Interim Period
Fiscal Year Interim Period(From November 1, 2013 (From November 1, 2014
to April 30, 2014)
to April 30, 2015)
Cash flows from financing activities
Net increase (decrease) in short-term loans payable
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
Proceeds from share issuance to minority shareholders
Cash dividends paid to minority shareholders
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

－

151
2,400
－7,752－7,301
－654
－7
－0
－350
8
－3
－13,509－1
5,432－6,448－9,806
－504
－
－0
－720
－
－3
－12,05112

9715
32,95733,672

3,712
31,98035,692

(4) 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.
(Business Segment Information)【 Segment information 】
I Interim period of the previous consolidated fiscal year (from November 1, 2013 to April 30, 2014)
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)

Total

Net sales
Net sales to outside
customers
Net sales or transfers
between related segments

60,4493,762

64,212

－

1

1

Total

60,4493,763

64,213

Segment income
9,825
79
9,905
(Note) The “Other Businesses” classification encompasses business segments not included in thereporting segment, and includes business related to the Steel Sales Division and business related
to the Information Products Division 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

9,825
79
166

Operating income reported on the Consolidated
Quarterly Statements of Income

10,072

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

Interim period of the current consolidated fiscal year (from November 1, 2014 to April 30, 2015)
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)

Total

Net sales
Net sales to outside
customers
Net sales or transfers
between related segments

64,012

4,295

68,307

－

－

－

Total

64,012

4,295

68,307

Segment income

10,344

119

10,463－13－

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

10,344
119
188

Operating income reported on the Consolidated
Quarterly Statements of Income

10,652

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

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14－