Message from the President

I am pleased to have this opportunity to report on the activities of Kanamoto and the Kanamoto Group during the first half of the Business Period ending October 31, 2014 and discuss our policies for the future.

During the first two quarters, Japan's economy traced a modest recovery trend that was driven by an increase in public works investment and supported by proactive fiscal policy expenditures, and factors such as a surge in demand ahead of the consumption tax hike.
In the construction industry that is Kanamoto's main customer, the supplementary budget served as one positive factor, and brisk market conditions continued. In addition to a shortage of skilled construction workers, a sharp rise in the cost of raw materials and equipment parts was a source of concern, but projects that must be addressed, including reconstruction in natural disaster-stricken regions and infrastructure construction ahead of the 2020 Tokyo Olympic and Paralympic Games, continued to mount.
To respond to this vigorous construction demand, the Kanamoto Group continued the aggressive capital investment it began in the previous fiscal year, supplying large quantities of materials and equipment to customers on a timely basis to meet local construction site needs.
As a result, net sales and earnings at nearly every domestic business unit were higher than Kanamoto's plan values, and consequently we revised our full-year earnings projections sharply upward.
Because it single-handedly equips the construction sector, the supply obligation fulfilled by the construction equipment rental industry is vitally significant, and we will continue to perform our activities in the future with an awareness of their importance as a critical component of Japan's social infrastructure.

In our overseas operations, which we have positioned as an engine for medium to long-term growth, we will continue to concentrate on the expansion of Kanamoto's business in China and Singapore, and seek to expand earnings by working to reliably attract vigorous demand in mainland China, Hong Kong, and Singapore.

We look forward to continuing to receive your unwavering support and encouragement for the Kanamoto Group in the future.

Kanchu Kanamoto, President and Chief Executive Officer