Three-month Consolidated Financial Report for the Fiscal Year ending
October 31, 2020 [Japan GAAP]
March 6, 2020
Listed Company Name
Company Code Number

Kanamoto Co., Ltd.
9678

Listing Exchanges

Tokyo Stock Exchange, Sapporo Stock Exchange

URL
Representative

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

Inquiries

Hiroyuki Isono

Director & Corporate Officer, Division Manager,
Accounting Division
TEL 81-11-209-1600

Scheduled date for submission of Quarterly Report

March 13, 2020

Scheduled date for commencement of dividend payments–

Preparation of Quarterly Settlement Supplementary Explanatory Materials:

No

Quarterly Earnings Briefings

No(Numbers less than one million yen have been rounded down)

1. Consolidated Operating Results for the Three-Month Period of the Fiscal Year Ending October 31, 2020
(November 1, 2019 – January 31, 2020)(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%

Millions of yen%

Millions of yen%

Millions of yen

%

4,266

9.0

4,367

8.9

2,536

2.2

3,913

−27.1

4,010

−27.7

2,482

−27.5

3,027
2,412

( 25.5%)(−34.7%)

Fiscal Year ending October 31,
45,431
3.0
2020: First quarter
Fiscal Year ended October 31,
44,126
4.4
2019: First quarter(Note) Comprehensive income (millions of yen)
Fiscal Year Ending October 31, 2020, First Quarter
Fiscal Year Ended October 31, 2019, First Quarter

Net Income per
Share on a Fully
Diluted BasisNet Income per
Share
Fiscal Year ending October 31,
2020: First quarter
Fiscal Year ended October 31,
2019: First quarter

Yen

Yen

65.48

－

64.30

－

(2) Consolidated Financial Position
Total Assets

Net Assets

Millions of yen

Fiscal Year ending October 31,
276,454
2020: First quarter
Fiscal Year ended October 31,
268,1822019(Reference) Equity (millions of yen)
Fiscal Year Ending October 31, 2020 First Quarter
Fiscal Year Ended October 31, 2019－%

123,23642.2

121,77943.1

116,681
115,507

1 －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, 2019
Fiscal year ending October 31, 2020

Full-year

Yen

Yen

Yen

Yen

Yen

－
－

25.00

－

40.00

65.00

25.00

－

40.00

65.00

Fiscal Year ending October 31, 2020
(Projected)(Note) Has the Company revised its most recently released dividend projection?:No

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 2020
(November 1, 2019 – October 31, 2020)(Percentages show the change from the prior year)

Net Sales
Millions of yen

Interim (Cumulative)
Full year

92,300182,700

Profit Attributableto Owners of
Parent%% Millions of yen% Millions of yen% Millions of yen
0.5
9,400 −16.6
9,500 −17.5
5,700 −21.4
1.1
16,100−9.8
16,400 −10.3
9,900 −13.4
Operating profit

Ordinary profit

Net Income per
Share
Yen

147.14255.56(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:(c) Changes in accounting estimates:

Yes
Yes

(d) Retrospective restatements: No(Note) These changes fall under Article 10-5 of the Regulation on the Terminology, Forms, and Preparation
Methods of Quarterly Consolidated Financial Statements. For details please refer to “2. Quarterly
Consolidated Financial Statements and Notes (3) Notes Concerning Quarterly Consolidated Financial
Statements (Change in Accounting Policy)” on p. 11 of the Attachments.
(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, 2020 First Quarter:
38,742,241 sharesFiscal year ended October 31, 2019:
38,742,241 shares(b) Number of shares of treasury stock at the end of the period
Fiscal year ending October 31, 2020 First Quarter:
3,342 sharesFiscal year ended October 31, 2019:
3,259 shares(c) Average number of shares during the period (consolidated year-to-date)Fiscal year ending October 31, 2020 First Quarter:
38,738,899 sharesFiscal year ended October 31, 2019 First Quarter:
38,608,623 shares

Note: Quarterly earnings reports are not subject to quarterly review by certified public accountants or independent accountauditors.
Note: Explanation concerning appropriate use of the projected operating results and other items to note
Note Concerning Forward-Looking Statements
The forward-looking statements, including business results forecasts, contained in these materials are based on
information currently available to the Company and on certain assumptions deemed to be reasonable. The Company
does not guarantee the achievement of the projections. Actual operating results may differ substantially due to anumber of factors. Please refer to “1. Qualitative Information Concerning Quarterly Consolidated Operating Results(3) Explanation Concerning Future Forecasts Including Projected Consolidated Operating Results” on Page 6 of the
Attachments for the conditions used as assumptions for the projected operating results and matters to note before
using the projected operating results.

－

3 －〇Attachments Table of Contents
1. Qualitative Information Concerning Quarterly Consolidated Operating Results ……………………………………

5(1) Qualitative Information Concerning Consolidated Operating Results ……………………………………………

5(2) Qualitative Information Concerning Consolidated Financial Position ……………………………………………

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 Three-month Period ended January 31 ……………………………………………….……..

9

9

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

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(Change in Accounting Policy) ………………………………………………………………………………………

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

12

－

4 －

1. Qualitative Information Concerning Quarterly Consolidated Operating Results(1) Qualitative Information Concerning Consolidated Operating Results
During the consolidated three-month period ended January 31, 2020, Japan’s economy maintained its moderate
recovery trend despite weakness in exports and production, as the employment and income environment and otheraspects continued to improve against the backdrop of strong corporate earnings. Conditions will continue towarrant vigilance, however, because of the economic impact from the spread of the new coronavirus, in addition to
the prolonged trade friction between the U.S. and China and heightened geopolitical tensions.
In the construction industry related to the Kanamoto Group, demand generally remained strong. In addition torobust private sector capital investment, spending on public works projects remains focused on works related todisaster recovery and disaster prevention and mitigation.
Given such circumstances, to realize its new Medium-Term Management Plan (FY2020-FY2024) “Creative 60”
the Kanamoto Group strove to build the organization that will be the foundation of the new plan, and moved ahead
with its three priority policies of expanding its domestic base of operations, developing its overseas business, andoptimizing internal operational processes.
For the three-month consolidated accounting period of the current fiscal year, the Company reported net sales of¥45,431 million, up 3.0% compared with the same period of the previous consolidated fiscal year. In terms ofearnings, operating income increased 9.0% from the same period of the previous consolidated fiscal year to ¥4,266
million, ordinary income increased 8.9% year-on-year to ¥4,367 million, and first-quarter profit attributable toowners of parent rose 2.2% year-on-year to ¥2,536 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, construction equipment rental demand
was supported by activities such as infrastructure-related works, works related to disaster prevention and mitigation,energy-related works, and redevelopment works, and remained brisk as a whole.
In addition, to strengthen its support organization for restoration and reconstruction activities following themultiple natural disasters that occurred in various regions of Japan, the Kanamoto Group worked to expand its
response capabilities through steps such as appropriate deployment of rental equipment in the stricken areas andexpansion of its asset portfolio.
Used construction equipment sales were basically at the same level as in the previous fiscal year, as theCompany proceeded with sales in line with its plan at the beginning of the fiscal year.
As a result of the above factors, first quarter net sales for Kanamoto’s construction-related businesses rose 3.4%
from the same period of the previous consolidated fiscal year to ¥40,934 million, and operating income increased
11.3% year-on-year to ¥3,910 million.
< Other businesses >In the Company’s other businesses, sales from welfare-related business expanded steadily, but because steel
products-related sales and sales in the information and telecommunications-related division declined in reaction to
the jump in the prior year and returned to levels seen in a more typical year, net sales slipped 1.3% from the same
period of the previous consolidated fiscal year to ¥4,497 million, and operating income fell 16.7% year-on-year to¥246 million.

(2) Qualitative Information Concerning Consolidated Financial Position
Assets, liabilities and net assets
Total assets at the end of the first quarter under review increased by ¥8,271 million compared with the end of theprevious consolidated fiscal year to ¥276,454 million. This change mainly reflected an increase in rental equipmentof ¥8,286 million.
Total liabilities were ¥153,218 million, an increase of ¥6,814 million compared with the end of the previous
consolidated fiscal year. The principal items contributing to this change were an increase of ¥2,046 million in notes－ 5 －and accounts payable-trade, an increase of ¥1,718 million in accounts payable-other, an increase of ¥1,196 million
in long-term loans payable and an increase of ¥5,024 million in long-term accounts payable-other, and a decreaseof ¥3,152 in income taxes payable.
Total net assets came to ¥123,236 million, ¥1,457 million higher than at the end of the previous consolidated
fiscal year. This was mainly because of profit attributable to owners of parent for the three-month period of ¥2,536
million, and a decrease of ¥1,549 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, 2019 (Japan GAAP) released on December 6, 2019.

－6 －2. Quarterly Consolidated Financial Statements and Notes(1) Quarterly Consolidated Balance Sheets(Unit: Millions of yen)
As of October 31, 2019
AssetsCurrent assets
Cash and deposits
Notes and accounts receivable - trade
Electronically recorded monetary claims - operating
Merchandise and finished goods
Costs on uncompleted construction contracts
Raw materials and supplies
Construction machine parts
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Rental equipment
Accumulated depreciation
Rental equipment, net
Buildings and structures
Accumulated depreciation
Buildings and structures, net
Machinery, equipment and vehicles
Accumulated depreciation
Machinery, equipment and vehicles, net
Land
Other
Accumulated depreciation
Other, net
Total property, plant and equipment
Intangible assets
Goodwill
Other
Total intangible assets
Investments and other assets
Investment securities
Deferred tax assets
Other
Allowance for doubtful accounts
Total investments and other assets
Total non-current assets
Total assets－

7 －As of January 31, 2020

43,751
39,574
6,347
1,017
33
800
17,5672,527−225
111,393

42,426
39,206
6,485
1,203
48
1,286
17,642
2,959−222
111,036

220,812−134,957
85,85537,453−22,060
15,393
7,828−6,377
1,451
37,211
2,857−1,684
1,173
141,084

234,223−140,082
94,14138,366−22,324
16,042
7,872−6,393
1,479
37,3082,552−1,697855
149,827

201
1,478
1,680

166
1,499
1,665

9,319
1,714
3,344
−353
14,024
156,789
268,182

9,674
1,251
3,359
−360
13,925
165,418
276,454

(Unit: Millions of yen)
As of October 31, 2019

As of January 31, 2020

33,657
1,120
11,147
885
4,245
1,320
23,3702,772
78,51935,704
1,620
11,212
895
1,092
615
25,0892,685
78,915

17,2061,800
48,043285
492
55
67,883
146,403

18,403
1,932
53,068333503
61
74,302
153,218

17,82919,324
76,638−9113,783

17,82919,324
77,625−9
114,770

1,918
0
−192
−2
1,723
6,272
121,779
268,182

2,043
－
−106
−26
1,910
6,555
123,236
276,454

Liabilities
Current liabilities
Notes and accounts payable - trade
Short-term loans payable
Current portion of long-term loans payable
Lease obligations
Income taxes payable
Provision for bonuses
Accounts payable - other
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Lease obligations
Long-term accounts payable - other
Net defined benefit liability
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Shareholders’ equity
Capital stock
Capital surplus
Retained earnings
Treasury shares
Total shareholders’ equity
Accumulated other comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets－

8 －(2) Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of Comprehensive Income(Quarterly Consolidated Statements of Income)(Consolidated Three-month Period ended January 31)(Unit: Millions of yen)Three months ended
January 31, 2019
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Operating profit
Non-operating income
Interest income
Dividend income
Rent income
Other
Total non-operating income
Non-operating expenses
Interest expenses
Foreign exchange losses
Share issuance cost
Loss on cancellation of leases
Other
Total non-operating expenses
Ordinary profit
Extraordinary income
Gain on sales of non-current assets
Subsidy income
Gain on sales of investment securities
Total extraordinary income
Extraordinary losses
Loss on sales and retirement of non-current assets
Loss on valuation of shares of subsidiaries andassociates
Total extraordinary losses
Profit before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitProfit attributable to non-controlling interests
Profit attributable to owners of parent－

9 －Three months ended
January 31, 2020

44,126
31,607
12,5198,605
3,913

45,431
32,166
13,264
8,998
4,266

6
63
20
121
212

10
71
22
105
210

24
5
46
9
29
115
4,010

20
31
－
23
34
109
4,367

24
5
5
35

2
－
－
2

10

47

－

66

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

114
4,255
983
422
1,406
2,848
311
2,536

(Quarterly Consolidated Statements of Comprehensive Income)(Consolidated Three-month Period ended January 31)(Unit: Millions of yen)Three months ended
January 31, 2019
ProfitOther comprehensive income
Valuation difference on available-for-sale securities
Deferred gains or losses on hedges
Foreign currency translation adjustment
Remeasurements of defined benefit plans, net of tax
Total other comprehensive income
Comprehensive income
Comprehensive income attributable toComprehensive income attributable to owners of parent
Comprehensive income attributable to non-controllinginterests－

10 －Three months ended
January 31, 2020

2,746

2,848

−273
−0
−59
−0
−333
2,412

124
−0
86
−30
179
3,027

2,150

2,723

262

304

(3) Notes Concerning Quarterly Consolidated Financial Statements(Notes Relating to the Going Concern Assumption)
The Company had no material items to report.
(Notes on Significant Changes to Shareholders’ Equity)
The Company had no material items to report.
(Change in Accounting Policy)(Changes in accounting policies that are difficult to separate from changes in accounting estimates)
Traditionally, certain of the Company’s domestic consolidated subsidiaries depreciated rental assets by applying
the declining balance method. From the beginning of the three-month consolidated accounting period under review,
these subsidiaries have changed their depreciation method to the straight-line depreciation method.
This change was based on the judgment the straight-line method is a reasonable method to appropriately reflect
actual conditions of future use as the long-term, stable use of rental assets is achieved through actions to “enhancethe environment to promote Group logistics” and other measures, and was the result of using the formulation of theKanamoto Group’s new Medium-Term Corporate Management Plan “Creative 60”, which positions “strengthening
intra-Group cooperation and aligning vectors up to the strategic and tactical levels” as a key component, as anopportunity to review the depreciation method.
As a result, operating income, ordinary income and income before income taxes and minority interests for thethree-month period ended January 31 increased by ¥228 million, respectively, compared with what they otherwise
would have been had the traditional depreciation method been applied. The effect of this change on the Company’s
information by segment is described in the relevant section.

－

11 －

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

Other Businesses(See note)

39,5694,556

44,126－－－

39,5694,556

44,126

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

Total

Segment profit
3,514
295
3,810
(Note) The “Other businesses” classification encompasses business segments not included in the reporting
segment, and includes business related to the Steel Sales Division, the Information Products Division,
welfare-related businesses and other businesses.
2. Difference between total reporting segment profit or loss and the amount reported on the Quarterly
Consolidated Statements of Income, and the main reasons for the difference (Matters Pertaining toReconciliation of Difference)(Unit: Millions of yen)
IncomeAmountReporting segment total
Income for “Other businesses” classification
Other adjustments

3,514
295
103

Operating profit reported on the Consolidated
Quarterly Statements of Income

3,913

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

－

12 －

II

First quarter of the current consolidated fiscal year (From November 1, 2019 to January 31, 2020)
1. Information on the amount of net sales and profit or loss by reporting segment(Millions of yen)
Reporting segment
Business related to theConstruction Equipment
Rental Division

Other Businesses(See note)

40,934

4,497

45,431－－－40,934

4,497

45,431

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

Total

Segment profit
3,910
246
4,157
(Note) The “Other businesses” classification encompasses business segments not included in the reporting
segment, and includes business related to the Steel Sales Division, the Information Products Division,
welfare-related businesses and other businesses.
2. Difference between total reporting segment profit or loss and the amount reported on the Quarterly
Consolidated Statements of Income, and the main reasons for the difference (Matters Pertaining toReconciliation of Difference)(Unit: Millions of yen)
IncomeAmountReporting segment total
Income for “Other businesses” classification
Other adjustments

3,910
246
109

Operating profit reported on the Consolidated
Quarterly Statements of Income

4,266

3. Information concerning fixed asset impairment loss and goodwill by reporting segment
The Company had no material items to report.
4. Matters concerning changes to reporting segments(Change in the depreciation method of property, plant and equipment)
As described in Change in Accounting Policy, beginning from the first quarter of the current
consolidated accounting fiscal year, certain domestic subsidiaries have changed their method for
depreciation of rental equipment from the declining balance method to the straight-line depreciation
method.
In conjunction with this change, the income from business related to the Construction Equipment
Rental Division for the three-month consolidated accounting period under review increased by ¥228
million compared with what it otherwise would have been had the accounting standard used in past
periods been applied.

－

13 －