Kanamoto : Three months ended Jan, 2023

Three-Month Consolidated Financial Report

for the Fiscal Year Ending October 31, 2023 (Japan GAAP)

Listed Company Name	Kanamoto Co., Ltd.		March 3, 2023
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		March 16, 2023
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, 2023

										(November 1, 2022 - January 31, 2023)
	(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, 2023:	49,508		5.9	3,096			-6.5	3,267	-6.9	1,738	-16.1
	First quarter
	Fiscal year ended
	October 31, 2022:	46,730		-	3,311			-16.2	3,509	-16.0	2,072	-8.5
	First quarter
	(Note) Comprehensive	income (millions	of yen)
	Fiscal year ending October 31, 2023, First quarter	1,451	(-45.0%)
	Fiscal year ended October 31, 2022, First quarter	2,636	(-19.7%)
		Earnings per	Earnings per
		Share on a Fully
		Share
		Diluted Basis
		Yen		Yen
	Fiscal year ending
	October 31, 2023:	47.31		-
	First quarter
	Fiscal year ended
	October 31, 2022:	55.04		-
	First quarter

(Note) As the Company has 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 ended October 31, 2022, the percentage of change for net sales from the results for the three months ended January 31, 2021, which was prior to the application of the said accounting standard, etc. is not shown.

(2) Consolidated Financial Position

		Total Assets		Net Assets	Equity Ratio
		Millions of yen		Millions of yen	%
	As of January 31,		309,173		139,112	42.1
	2023
	As of October 31,		305,320		140,611	43.2
	2022
	(Reference) Equity (millions of yen)
	As of January 31, 2023	130,268
	As of October 31, 2022	131,958

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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,	-	35.00		-	40.00	75.00
	2022
	Fiscal year ending October 31,	-
	2023
	Fiscal year ending October 31,		35.00		-	40.00	75.00
	2023 (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, 2023 (November 1, 2022 - October 31, 2023)

(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
Interim period	96,700	3.2	6,200	-12.7	6,200	-16.9	3,600	-20.7	97.96
Full year	198,000	5.3	14,000	5.8	14,100	2.3	8,400	0.7	228.57

(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
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: No
   2. Changes other than the above: No
   3. Changes in accounting estimates: No
   4. Retrospective restatements: No
5. Number of shares issued (common shares)
6. 1. Number of shares issued at the end of the period (including treasury shares)

As of January 31, 2023:	38,742,241 shares
As of October 31, 2022:	38,742,241 shares
(b) Number of treasury shares at the end of the period
As of January 31, 2023:	2,202,190 shares
As of October 31, 2022:	1,799,490 shares

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

Fiscal year ending October 31, 2023: First quarter:	36,749,709 shares
Fiscal year ended October 31, 2022: First quarter:	37,660,982 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 Three-Month Period Ended January 31)	9
		(Quarterly Consolidated Statements of Comprehensive Income)	10
		(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
		(Segment Information)	11

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1.Qualitative Information Concerning Quarterly Consolidated Operating Results

(1) Qualitative Information Concerning Consolidated Operating Results

During the three-month period under review, while the impact of COVID-19 remained, Japan's economy showed signs of a gradual recovery. However, the outlook remains uncertain mainly due to concerns over the impact of uncertainties in overseas economies and heightened geopolitical risks on Japan's economy.

In the construction industry in which the Group is involved, although public sector investment remained firm, backed mainly by Japan's National Resilience Plan, and signs of a recovery in private sector construction investment continued, the impact of soaring labor costs, material prices, etc. on profitability, and other conditions that demand close attention persist.

In such circumstances, in order to achieve the goals of its Medium-Term Corporate Management Plan "Creative 60" (FY2020-2024), the Group is committed to sustainable development and the enhancement of corporate value mainly through a business strategy that matches regional characteristics using Group synergy and the promotion of developing bases for strengthening its overseas business foundation, while also pursuing a flexible asset strategy that is adapted to the external environment and effective asset management.

For the three-month period under review, the Group reported net sales of ¥49,508 million, an increase of 5.9% year on year. On the earnings front, partly due to an increase in selling, general and administrative expenses caused by rises in depreciation and investment in human resources in preparation for the future, operating profit was ¥3,096 million, a decrease of 6.5% year on year, ordinary profit was ¥3,267 million, a decrease of 6.9% year on year, and profit attributable to owners of parent was ¥1,738 million, a decrease of 16.1% year on year.

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 the strength in rental demand for construction equipment overall returned mainly as public sector investment remained steady and private sector construction investment has shown signs of a recovery, price competition accompanying rising construction costs has become increasingly severe.

In addition, the Group is working to ensure a foundation for further improvement in earnings, such as by enhancing its rental equipment in regions where there is expected to be significant construction demand and reorganizing its network of bases in order to improve liquidity.

Used construction equipment sales increased 53.5% year on year, as Kanamoto proceeded with sales to maintain an appropriate asset mix while carrying 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 ¥45,110 million, an increase of 5.8% year on year, and operating profit of ¥2,661 million, a decrease of 8.3% year on year.

< Other businesses >

In the Group's other businesses, net sales was ¥4,397 million, an increase of 7.4% year on year, and operating profit was ¥304 million, an increase of 5.8% year on year, 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

Assets, liabilities, and net assets

Total assets at the end of the first quarter under review stood at ¥309,173 million, an increase of ¥3,853 million compared with the end of the prior fiscal year. This was primarily due to increases of ¥3,682 million

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