Kanamoto : Nine-month Consolidated Financial Report for the Fiscal Year ending October 31, 2021 (Japan GAAP)

Nine-Month Consolidated Financial Report

for the Fiscal Year Ending October 31, 2021 (Japan GAAP)

Listed Company Name	Kanamoto Co., Ltd.		September 3, 2021
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, 2021
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, 2021

(November 1, 2020 - July 31, 2021)

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, 2021:	141,455		6.4	10,895				2.2	11,548	10.4	6,826	11.1
	Third quarter
	Fiscal year ended
	October 31, 2020:	132,961		-0.6	10,658			-19.4	10,459	-23.0	6,143	-28.1
	Third quarter
	(Note) Comprehensive	income (millions	of yen)
	Fiscal year ending October 31, 2021, Third quarter	8,713	(42.9%)
	Fiscal year ended October 31, 2020, Third quarter	6,096	(-29.7%)
		Earnings per		Earnings per
			Share on a Fully
		Share
			Diluted Basis
		Yen			Yen
	Fiscal year ending
	October 31, 2021:	180.53			-
	Third quarter
	Fiscal year ended
	October 31, 2020:	160.09			-
	Third quarter

(2) Consolidated Financial Position

		Total Assets		Net Assets	Equity Ratio
		Millions of yen		Millions of yen	%
	As of July 31, 2021		300,982		132,455	41.4
	As of October 31,		300,748		126,188	39.6
	2020
	(Reference) Equity (millions of yen)
	As of July 31, 2021	124,718
	As of October 31, 2020	119,091

(Note) In the first quarter of the fiscal year ending October 31, 2021, the Company finalized the provisional accounting treatment for business combinations, and the figures for the fiscal year ended October 31, 2020 reflect the finalized content of the provisional accounting treatment.

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2. Dividends

				Annual Dividends per Share
		End of		End of second		End of third	Year-end		Full-year
		first quarter		quarter		quarter
		Yen		Yen		Yen	Yen		Yen
	Fiscal year ended October 31,	-	25.00		-	40.00	65.00
	2020
	Fiscal year ending October 31,	-	25.00		-
	2021
	Fiscal year ending October 31,						45.00	70.00
	2021 (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, 2021 (November 1, 2020 - October 31, 2021)

(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	190,300	6.3	15,000	5.3	15,200	6.5	9,000	6.3	238.02

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

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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

Company newly included (Company name)	─
Company newly excluded (Company name)	─

1. Application of special accounting method in the preparation of quarterly consolidated financial statements: No
2. Changes in accounting principles, changes in accounting estimates and retrospective restatements
3. 1. Changes in accounting policy in conjunction with revision of accounting standards: No
   2. Changes other than the above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatements: No
4. Number of shares issued (common shares)
5. 1. Number of shares outstanding at the end of the period (including treasury shares)

As of July 31, 2021:	38,742,241 shares
As of October 31, 2020:	38,742,241 shares

1. Number of treasury shares at the end of the period

As of July 31, 2021:	924,846 shares
As of October 31, 2020:	939,142 shares

1. Average number of shares outstanding during the period (cumulative from the beginning of the fiscal year)

Fiscal year ending October 31, 2021: Third quarter:	37,812,715 shares
Fiscal year ended October 31, 2020: Third quarter:	38,377,113 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 ............................................	5
(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-MonthPeriod Ended July 31) ......................................................	9
	(Quarterly Consolidated Statements of Comprehensive Income) ................................	10
	(Consolidated Nine-MonthPeriod 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
	(Supplemental Information)........................................................................................	11
	(Segment Information) ...............................................................................................	11

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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 continued to face difficult conditions due to the impact of the spread of COVID-19. Although the economy is expected to recover due to a range of policies and the promotion of vaccination against COVID-19, the future continues to remain uncertain given factors such as the repeated issuance of state of emergency declarations and semi-state of emergency COVID-19 measures.

In the construction industry in which the Group is involved, public sector investment including activity being carried out for the Japan's National Resilience Plan remained strong. Private sector construction investment saw signs of partial recovery begin to appear, however there is uncertainty about the future and we continue to remain cautious.

In such circumstances, based on the three key measures of the Medium-Term Corporate Management Plan "Creative 60" (FY2020-2024), in addition to strengthening the foundation of the Alliance Group, we are pursuing an asset strategy that carefully assesses changes in the business environment. Furthermore, we are actively involved in business collaboration and technology development for future industry reorganization and the promotion of ICT construction solutions in order to expand the scope of the business and enhance corporate value.

For the nine-month period under review, the Group reported net sales of ¥141,455 million, up 6.4% compared with the same period of the prior year. Operating profit increased 2.2% from the same period of the prior year to ¥10,895 million, ordinary profit increased 10.4% year on year to ¥11,548 million, and profit attributable to owners of parent increased 11.1% year on year to ¥6,826 million.

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, in addition to signs of recovery beginning to be seen in private sector construction investment, rental demand for construction equipment remained solid overall due to strong public sector investment centered on construction related to disaster recovery work and infrastructure-related construction as well as disaster prevention-related construction.

At the same time, the Group is pressing forward with the strengthening of collaboration across various areas and the efficient use of management resources to achieve sustainable growth while also making efforts to build a structure that will strengthen our ability to respond to frequent natural disasters and the renewable energy field.

Used construction equipment sales fell 7.0% year on year, as disposals were proceeded with as planned at the beginning of the period.

Reflecting these factors, the Group posted net sales in the construction-related businesses of ¥128,085 million, an increase of 6.8% year on year, and operating profit of ¥9,715 million, an increase of 1.1%.

< Other businesses >

In the Group's other businesses, net sales increased by 3.0% year on year to ¥13,370 million and operating profit increased by 14.9% to ¥828 million, as the business related to the Steel Sales Division as well as the business related to the Information Products Division and welfare-related business performed well.

(2) Qualitative Information Concerning Consolidated Financial Position

With regard to the business combination with KANAMOTO AUSTRALIA HOLDINGS PTY LTD conducted on October 15, 2020, although provisional accounting treatment was carried out in the previous consolidated fiscal year, it was finalized in the first quarter under review. As a result of the finalization of the said provisional accounting treatment, a review of the allocation of acquisition costs is applied in the

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