Kanamoto : Nine months ended Jul, 2022

Nine-Month Consolidated Financial Report

for the Fiscal Year Ending October 31, 2022 (Japan GAAP)

Listed Company Name	Kanamoto Co., Ltd.		September 2, 2022
Company Code Number	9678
Listing Exchanges	Tokyo Stock Exchange, Sapporo Stock Exchange
URL	https://www.kanamoto.co.jp
Representative	Tetsuo Kanamoto	President and CEO
Inquiries	Shun Hirose	Director & Corporate Officer, Division Manager,
		Accounting Division
		TEL [phone]
Scheduled date for submission of Quarterly Report		September 13, 2022
Scheduled date for commencement of dividend payments	-
Preparation of Quarterly Settlement Supplementary Explanatory Materials	No
Quarterly Earnings Briefings			No

(Numbers less than one million yen have been rounded down)

1. Consolidated Operating Results for the Nine-Month Period of the Fiscal Year Ending October 31, 2022

										(November 1, 2021 - July 31, 2022)
	(1) Consolidated Operating Results (Cumulative)	(Percentages show the change from the prior year)
		Net Sales		Operating Profit		Ordinary Profit	Profit Attributable to
				Owners of Parent
		Millions of yen		%	Millions of yen		%	Millions of yen	%	Millions of yen	%
	Fiscal year ending
	October 31, 2022:	138,828		-	9,162			-15.2	9,679	-15.6	5,927	-13.2
	Third quarter
	Fiscal year ended
	October 31, 2021:	141,455		6.4	10,810			1.4	11,462	9.6	6,829	11.2
	Third quarter
	(Note) Comprehensive	income (millions	of yen)
	Fiscal year ending October 31, 2022, Third quarter	8,108	(-7.0%)
	Fiscal year ended October 31, 2021, Third quarter	8,716	(43.0%)
		Earnings per	Earnings per
		Share on a Fully
		Share
		Diluted Basis
		Yen		Yen
	Fiscal year ending
	October 31, 2022:	159.27		-
	Third quarter
	Fiscal year ended
	October 31, 2021:	180.61		-
	Third quarter

(Notes) 1. The Company applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the fiscal year ending October 31, 2022, and the figures for the third quarter of the fiscal year ending October 31, 2022 are figures after the application of the said accounting standard. As a result, the percentage of change for net sales from the same period of the previous year is not shown.

1. 2. In the previous fiscal year, the Company finalized the provisional accounting treatment for business combinations, and the figures for the third quarter of the fiscal year ended October 31, 2021 reflect the finalized content of the provisional accounting treatment.

2. Consolidated Financial Position

		Total Assets		Net Assets	Equity Ratio
		Millions of yen		Millions of yen	%
	As of July 31, 2022		309,542		138,043	41.9
	As of October 31,		303,754		134,917	41.8
	2021
	(Reference) Equity (millions of yen)
	As of July 31, 2022	129,614
	As of October 31, 2021	126,956

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(Note) The Company applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the fiscal year ending October 31, 2022, and the figures as of July 31, 2022 are figures after the application of the said accounting standard.

2. Dividends

				Annual Dividends per Share
		End of		End of		End of	Year-end		Full-year
		first quarter		second quarter		third quarter
		Yen		Yen		Yen	Yen		Yen
	Fiscal year ended October 31,	-	25.00		-	45.00	70.00
	2021
	Fiscal year ending October 31,	-	35.00		-
	2022
	Fiscal year ending October 31,						40.00	75.00
	2022 (projected)
	(Note) Has the Company revised its	most recently released dividend projection?: No

3. Projected Consolidated Operating Results for the Fiscal Year Ending October 31, 2022 (November 1, 2021 - October 31, 2022)

(Percentages show the change from the prior year)

	Net Sales		Operating Profit	Ordinary Profit	Profit Attributable to	Earnings per
		Owners of Parent	Share
	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%	Yen
Full year	186,900	-	13,500	-7.7	14,000	-9.0	8,600	-3.4	231.07

(Notes) 1. Has the Company revised its most recently released projected consolidated operating results during the quarter?: Yes For the revisions to projected consolidated operating results, please refer to the "Notification Concerning Revision of Projected Full-Year Operating Results for the Fiscal Year Ending October 31, 2022" announced today (September 2, 2022).

2. As the Company applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the fiscal year ending October 31, 2022, the above projected consolidated operating results are after the application of the said accounting standard. As a result, the percentage of change for net sales from the previous fiscal year is not shown.

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Notes

1. Changes in material subsidiaries during the period under review (Changes in specific subsidiaries in conjunction with a change in the scope of consolidation): No
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
4. 1. Changes in accounting policy in conjunction with revision of accounting standards: Yes
   2. Changes other than the above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatements: No

(Note) For details, please refer to "2. Quarterly Consolidated Financial Statements and Significant Notes Thereto (3) Notes Concerning Quarterly Consolidated Financial Statements (Changes in Accounting Policies)" on page 11 of the Attachments.

1. Number of shares issued (common shares)
   (a) Number of shares issued at the end of the period (including treasury shares)

As of July 31, 2022:	38,742,241 shares
As of October 31, 2021:	38,742,241 shares
(b) Number of treasury shares at the end of the period
As of July 31, 2022:	1,799,490 shares
As of October 31, 2021:	924,846 shares

(c) Average number of shares outstanding during the period (cumulative from the beginning of the fiscal

year)
Fiscal year ending October 31, 2022: Third quarter:	37,218,062 shares
Fiscal year ended October 31, 2021: Third quarter:	37,812,715 shares

Note: Quarterly earnings reports are not subject to quarterly review by certified public accountants or independent account auditors.

Note: Explanation concerning appropriate use of the projected operating results and other items to note (Note concerning forward-looking statements)

The forward-looking statements, including business results forecasts, contained in these materials are based on information currently available to the Company and on certain assumptions deemed to be reasonable. The Company does not guarantee the achievement of the projections. Actual operating results may differ substantially due to a number of factors. Please refer to "1. Qualitative Information Concerning Quarterly Consolidated Operating Results (3) Explanation Concerning Future Forecasts Including Projected Consolidated Operating Results" on page 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.

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○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)	Explanation Concerning Future Forecasts Including Projected Consolidated Operating Results .......	6
2. Quarterly Consolidated Financial Statements and Significant Notes Thereto .....................................	7
(1)	Quarterly Consolidated Balance Sheets...................................................................................	7
(2)	Quarterly Consolidated Statements of Income and Quarterly Consolidated Statements of
	Comprehensive Income ........................................................................................................	9
	(Quarterly Consolidated Statements of Income) ...................................................................	9
	(Consolidated Nine-Month Period Ended July 31)...............................................................	9
	(Quarterly Consolidated Statements of Comprehensive Income) ...........................................	10
	(Consolidated Nine-Month Period Ended July 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
	(Changes in Accounting Policies).......................................................................................	11
	(Supplemental Information) .............................................................................................	12
	(Segment Information)....................................................................................................	12

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1.Qualitative Information Concerning Quarterly Consolidated Operating Results

(1) Qualitative Information Concerning Consolidated Operating Results

During the nine-month period under review, Japan's economy showed signs of picking up as economic activities normalized due to the gradual easing of restrictions on movement associated with COVID-19. However, the outlook remains uncertain due to concerns about the impact of the recent re-emergence of infection, the prolonged situation in Ukraine, and the acceleration of global inflation.

In the construction industry in which the Group is involved, although public sector investment remained steady and private sector construction investment has shown signs of gradual recovery, the situation still requires monitoring as the supply shortage of semiconductors and soaring material and energy prices are causing construction costs to rise, and as the shortage of skilled construction workers are becoming increasingly more severe.

In such circumstances, based on the three key measures in the Medium-Term Corporate Management Plan "Creative 60" (FY2020-2024), the Group is promoting the Alliance Group's foundations, and working to further develop business through synergistic effects and the establishment of a meticulous service system. In addition, the Group is committed to sustainable development and the enhancement of corporate value through the promotion of flexible investment strategy that responds to actual demand, and through efforts such as focusing on securing and training the human resources who will lead the company in the future.

For the nine-month period under review, the Group reported net sales of ¥138,828 million. On the earnings front, partly due to an increase in selling, general and administrative expenses caused by investment in human resources in addition to a trend of rental demand, operating profit decreased 15.2% from the same period of the prior fiscal year to ¥9,162 million, ordinary profit declined 15.6% to ¥9,679 million, and profit attributable to owners of parent decreased 13.2% to ¥5,927 million.

Please note that the Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) and relevant ASBJ regulations from the beginning of the first quarter. For details, please refer to "2. Quarterly Consolidated Financial Statements and Significant Notes Thereto

1. Notes Concerning Quarterly Consolidated Financial Statements (Changes in Accounting Policies)." Operating 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, which is Kanamoto's core business, although performance of public sector investment remained steady, primarily in disaster prevention and reduction and activities being carried out for Japan's National Resilience Plan as well as maintenance and renewal of aging social capital, a full-scale recovery in rental demand for construction equipment did not eventuate as some regional disparities in construction demand became more apparent.

In addition to strengthening its ability to respond to the fields of maintenance and repair of social infrastructure and renewable energy, where further priority investment is expected, the Group is also promoting technological development and business alliances for environmental equipment as well as measures for saving labor and protecting the environment at construction sites, which are desirable to accelerate digital reform and realize a decarbonized society.

Used construction equipment sales decreased 16.0% year on year, as Kanamoto has carried out the extension of the rental equipment operation period as planned at the beginning of the fiscal year.

Reflecting these factors, the Group posted net sales in the construction-related businesses of ¥125,879 million, and operating profit of ¥7,929 million, a decrease of 17.7% year on year.

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