Press Release

Fukuyama Transporting FY2018 Q3 Summary

Third Quarter consolidated results for Financial Year 2018 (Japan GAAP)



Listed Company Name: Fukuyama Transporting Co., Ltd.
Listed Section: East
Code No. 9075 URL: http://www.fukutsu.co.jp
Representatives: (Position) President and C.E.O. (Name) Shigehiro Komaru
Contact: (Position) Managing Corporate Officer (Name) Satoshi Kuwamoto
TEL: 084-924-2000
Expected date of delivery of quarterly statement: February 14th, 2018
Expected date of dividend payment: -
Supplementary documents for quarterly results: Yes
Presentation event of quarterly results: None


(Data Rounded to nearest 1 million JPY)

1. Financial Year 2018 : Third Quarter consolidated results (April 1st, 2017 - December 31st, 2017)


(1) Consolidated business results (Cumulative)
(% column shows percentage change from same quarter of previous FY)

(Note) Comprehensive income: FY2018 Third Quarter 14,615 mill. JPY (32.3%), FY2017 Third Quarter 11,047 mill. JPY (23.7%)
*Effective as of October 1, 2017, the stock consolidation was conducted at the ratio of 1 share per 5 ordinary shares. Quarterly net profits per share is an estimate given the stock consolidation was conducted at the start of the previous consolidated financial year.

(2) Consolidated Financial Position

(Reference) Net Worth FY2018 Third Quarter 241,509 mill. JPY, FY2017 Third Quarter 231,579 mill. JPY

*Effective as of October 1, 2017, the stock consolidation was conducted at the ratio of 1 share per 5 ordinary shares. Net assets per share is an estimate given the stock consolidation was conducted at the start of the previous consolidated financial year.

2. Dividends



(Note) Revisions since latest published dividend forecast: None
*Effective as of October 1, 2017, the stock consolidation was conducted at the ratio of 1 share per 5 ordinary shares. The end of FY dividends of FY2018 (forecast) states the amount in respect to the aforementioned stock consolidation, therefore the total annual dividends is written as "-". The end of FY dividends per share of FY2018 (forecast) pre-revaluation is 5, therefore the total annual dividends is 10. For further information, please refer below to "Use of business result forecasts, and other notable reports".

3. Financial Year 2018 Third Quarter consolidated result forecasts (April 1st, 2017 - March 31st, 2018)


(% column shows percentage change from same quarter of previous FY)
(Note) Revisions since latest published dividend forecast: Yes
*The net income per share of FY2018 (forecast) states the amount in respect to the aforementioned stock consolidation. For further information, please refer below to "Use of business result forecasts, and other notable reports".

*Note

1. Important changes regarding subsidiary companies on current cumulative quarterly consolidated term (Changes in subsidiary companies regarding the adjustment in range of consolidation): None

2. Accounting processes used to create quarterly consolidated financial statement: None

3. Changes in accounting method, changes in accounting invoice, changes and corrections

  1. Changes in accounting processes reflecting revisions in accounting standards: None

  2. Changes in accounting processes for reasons outside of (a): None

  3. Changes in accounting invoice: None

  4. Corrections: None


4. Number of the issued shares (Ordinary Shares)

a. Number of Issued shares at end of term (including treasury stocks) FY2018 Third Quarter 55,770,363 shares FY2017 55,770,363 shares
b. Number of treasury stocks at end of term FY2018 Third Quarter 4,816,624 shares FY2017 4,270,408 shares
c. Average number of shares outstanding during the period (Cumulative) FY2017 Third Quarter 51,095,011 shares FY2018 Third Quarter 49,078,657 shares


*Effective as of October 1, 2017, the stock consolidation was conducted at the ratio of 1 share per 5 ordinary shares. Number of issued shares, number of treasury stocks, as well as average number of shares outstanding during the period is calculated given the stock consolidation was conducted at the start of the previous consolidated financial year.

* Quarterly consolidated results are not subject to Quarterly review
* Use of business result forecasts, and other notable reports

- Statements regarding the future on matters such as business result outlook included in this document are based on information acquired by the company that is within rational assumption. However, it is not the company's intent to make promises regarding the completion of such forecasts. Furthermore, actual results are subject to variables that could greatly affect the outcome. For information regarding the conditions that affect business forecasts, and cautionary note regarding the use of such data, please refer to page 2 of the attached document: "1. Qualitative Information regarding current quarter results (3) Regarding the use of information regarding future outlooks such as consolidated result forecasts".

- Based on the decisions made on the 69th ordinary general shareholders' meeting held on June 28th, 2017, a stock consolidation was conducted at the ratio of 1 share per 5 ordinary shares, effective as of October 1st, 2017. Based on the above, the dividend forecasts as well as the consolidated result forecast of FY2018 pre-consolidation is as stated below:

1. Dividends of FY2018
Dividends per share: End of second quarter 5.00 (Note 1), End of Year (Forecast) 5.00 (Note 2)

2. Forecast of consolidated results at end of FY2018
Net profit per share at end of period 33.66
(Note 1) Dividend payments at the end of the second quarter have been conducted based on number of shares before stock consolidation.
(Note 2) Dividend amount has been calculated before stock consolidation.
(Note 3) The yearly dividends per share as of FY2018 (before stock consolidation) is 10.00.

1. Qualitative information regarding current quarter results


(1) Information regarding operation results

While the Company's business benefited from an improvement in the improving domestic economy during the first three quarters of the current fiscal year due to higher personal consumption and better employment figures, there is continued uncertainty due to geo-political risk in overseas markets.

Continued, modest recovery is expected in the Cargo Automobile Transport Industry in Japan, bringing a slight increase in volume. However, acquisition of labor force such as drivers remains a subject of concern due to increasing labour costs and rising safety standards.

Against this backdrop, Fukuyama Transporting is committed to revising costs and fees, as well as developing a cost-effective logistics network to deliver improved quality, productivity.

As a result of these measures stated above, the company achieved sales of 201.412 billion JPY (4.6% increase since same quarter of the previous year), operating profit of 11.636 billion JPY (23.7% increase since same quarter of the previous year), ordinary income of 12.773 billion JPY (18.8% increase since same quarter of the previous year), and Net income returned to parent company equity of 8.386 billion JPY (3.3% increase since same quarter of the previous year).

Highlights of each business segments is as follows.

The transportation business has been continuously promoting the implementation of the new transportation fares in conjunction to the revision of contracts regarding shipping costs and fees. Moreover, as an effort to diversify the modes of transport, in October a brand-new 25 meter long van-type trailer, a first of it's kind in Japan, was put into service that is expected to increase efficiency of route transport and labor productivity. As a result of the measures above, sales was 1,76.443 billion JPY (4.2% increase since same quarter of the previous year), and operating profit of 11.236 billion JPY (22.7% increase since same quarter of the previous year).

Warehouse processing business has increased it's efficiency in logistic services given the newly operational Fukuyama Kita distribution center as of December.

Sales and operating profit of this segment are as follows: Sales 8.788 billion JPY (1.1% increase since same quarter of the previous year), and operating profit 435 million JPY (3.5% increase since same quarter of the previous year).

Internationally, the company has expanded truck delivery routes within the ASEAN region led to a significant results. Furthermore, sales in customs clearance services have shown steady increase, given the stable flow of import cargo from China, and south east Asian countries.

Total sales in this segment was 6.073 billion JPY (28.8% increase since same quarter of the previous year), and operating profit 390 million JPY (69.7% increase since same quarter of the previous year).

In addition to the above, the facilities leasing business showed a steady increase.

Total sales in this segment was 10.107 billion JPY (1.6% increase since same quarter of the previous year), and operating profit 2.761 billion JPY (2.7% increase since same quarter of the previous year).

(2) Information regarding financial status

Assets
Compared to the end of the previous fiscal year, the total consolidated assets at the end of the third quarter of this fiscal year increased by 19.951 billion JPY, totaling to 437.071 billion JPY. The increase is attributable mainly to the increase in trade notes and accounts receivable, which increased current assets by 10.958 billion JPY, as well as the increase in market value of investment securities that resulted in an increase of 8.787 billion JPY in investments and other assets.

Liabilities
Compared to the end of the previous fiscal year, the total consolidated liabilities at the end of the third quarter of this fiscal year increased by 9.823 billion JPY, totaling to 192.432 billion JPY.The increase is attributable mainly due to an increase in long-term borrowings (including one-year scheduled repayments).

Net assets
Compared to the end of the previous fiscal year, the net consolidated assets at the end of the third quarter of this fiscal year increased by 10.128 billion JPY, totaling to 244.638 billion JPY.This is attributable mainly to an increase in retained earnings and the difference in the valuation of available-for-sale securities.

(3) Regarding the use of information regarding future outlooks such as consolidated result forecasts

Given the gradual recovery of the domestic economy, the cargo volume is expected to overwhelm our expectations. Although the shortage of labor and the outsourcing cost of labor is expected to increase, our company has seen positive results from the increased the productivity of operation and cutting down costs. Based on the aforementioned measures, we have revised the forecast announced in "Second Quarter consolidated results for Financial Year 2018", published on November 8th, 2017.

Revision of forecasts of consolidated results of Financial year 2018 (April 1st, 2017 ~ March 31st, 2018)


* Effective as of October 1, 2017, the stock consolidation was conducted at the ratio of 1 share per 5 ordinary shares. Net income per share on current term is calculated given the stock consolidation was conducted at the start of the previous consolidated financial year.

2. Notable information regarding quarterly consolidated financial statements



(1) Quarterly consolidated balance sheet
(Unit 1 Million JPY)

Previous consolidated financial year
(March 31st, 2017)
Current third quarter consolidated results (December 31st, 2017)

Assets

Current Assets

Cash and Deposits 20,877 25,392
Notes and Accounts Receivable 35,020 41,799
Deferred Tax Assets 1,434 901
Other 3,656 3,875
Allowance for Doubtful Accounts (80) (102)
Current Assets Total 60,908 71,866

Fixed Assets

Tangible Fixed Assets
Buildings and Structures 237,281 242,470
Accumulated Depreciation (145,131) (148,650)
Buildings and Structures (Net) 92,150 93,820
Machinery and Transportation Equipment 79,748 83,188
Accumulated Depreciation (62,899) (66,751)
Machinery and Transportation Equipment (Net) 16,849 16,436
Tools, furniture, and Fixtures 13,897 13,936
Accumulated Depreciation (11,261) (11,378)
Tools, Furniture, and Fixtures (Net) 2,636 2,557
Land 191,689 192,901
Construction in Progress 2,359 232
Tangible Fixed Assets Total 305,684 305,948
Intangible Fixed Assets
Other 5,306 5,248
Intangible Fixed Assets Total 5,306 5,248
Investments, and other Assets
Investment Securities 39,897 48,663
Deferred Tax Assets 2,043 2,153
Other 3,954 3,411
Allowance for Doubtful Accounts (675) (221)
Investments, and other Assets Total 45,219 54,007
Fixed Assets Total 356,210 365,204

Assets Total

417,119 437,071



Previous consolidated financial year
(March 31st, 2017)
Current third quarter consolidated results (December 31st, 2017)

Liabilities

Current Liabilities

Notes and Accounts Payable 17,319 17,825
Short-Term Loans Payable 10,685 10,800
Long-Term Loans Payable within 1 Year 16,429 27,250
Lease Obligations 144 28
Accrued Income Tax 2,455 2,111
Accrued Consumption Tax 1,128 3,310
Deferred Tax Liabilities 11 13
Bonuses 3,212 1,404
Other 14,535 16,931
Current Liabilities Total 65,921 79,676
Fixed Liabilities
Long-Term Loans Payable 61,799 55,120
Lease Obligations 1 107
Deferred Tax Liabilities 8,774 11,155
Deferred Tax Liabilities for Land Revaluation 23,688 23,688
Liabilities for Retirement Benefit 20,902 21,191
Asset Retirement Obligations 489 493
Other 1,032 999
Fixed Liabilities Total 116,687 112,756
Liabilities Total 182,609 192,432

Net Assets

Shareholder's Equity
Capital 30,310 30,310
Capital Surplus 39,058 39,065
Retained Earnings 124,415 130,240
Treasure Stocks (10,999) (12,924)
Shareholder's Equity Total 182,784 186,691
Accumulated Other Comprehensive Income
Other Available-for-Sale Securities 14,798 20,594
Revaluation Reserve for Land 34,411 34,411
Foreign Currency Translation Adjustment 21 18
Accumulated Adjustments for Retirement Benefits (436) (207)
Accumulated other Comprehensive Income Total 48,795 54,817
Non-Controlling Interest Component 2,930 3,129
Net Assets Total 234,510 244,638

Liabilities and Net Assets Total

417,119 437,071


(2) Quarterly combined statement of comprehensive income (Current third quarter consolidated period)
(Unit 1 Million JPY)


Previous third consolidated cumulative period (April 1st, 2016 - December 31st, 2016) Current third consolidated cumulative period (April 1st, 2017 - December 31st, 2017)

Sales

192,644 201.412
Sales Cost 177,202 182,953
Gross Profit 15,442 18,459
Selling, General, and Administrative Expenses 6,034 6,822
Operating Profit 9,408 11,636
Non-Operating Income
Dividends Received 912 936
Subsidies 311 209
Other 472 284
Non-Operating Income Total 1,697 1,429
Non-Operating Expenses
Interest Expenses 218 195
Other 134 97
Non-Operating Expenses Total 353 293
Ordinary Income 10,752 12,773
Special Income
Gain on Sales of Fixed Assets 238 2
Gain on Sales of Investment Securities 1,244 -
Settlement Payment - 57
Special Income Total 1,482 59
Extraordinary Loss
Loss on Sales of Fixed Assets - 3
Loss on Disposal of Fixed Assets 149 77
Impairment Loss 23 -
Loss from a Disaster - 19
Extraordinary Loss Total 173 100
Quarterly Net Income before tax and other adjustments 12,061 12,732
Corporate Income, Local Resident, and Enterprise Tax 2,734 3,913
Corporate Income, and Other Tax Adjustments 989 284
Corporate Income and Other Tax Total 3,723 4,197
Quarterly Net Income 8,338 8,534
(Breakdown)
Net Return on Parent Company Equity 8,121 8,386
Net Income to Non-Controlling Interests 216 148
Other Comprehensive Income
Other Available-for-Sale Securities 3,123 5,851
Foreign Currency Translation Adjustment (243) 1
Accumulated Adjustments for Retirement Benefits (171) 228
Other Comprehensive Income Total 2,708 6,081
Quarterly Comprehensive Income 11,047 14,615
(Breakdown)
Comprehensive Income attributable to Parent Company Equity 10,885 14,408
Comprehensive Income attributable to Non-Controlling Interests 162 207


(3) Note regarding quarterly consolidated financial statements

(Note regarding the assumption of a going concern)
None Applicable.

(Note on significant changes in the amount of shareholders' equity)
None Applicable.

(Segment information)
I. Previous third consolidated cumulative period (April 1st, 2016 - December 31st, 2016)
1. Information regarding Net Sales, Income, and losses for each reportable segments
(Unit 1 Million JPY)

(Note) "Other" defines the business segments that are not included in the reportable segments, which include leasing of real estate, retail business, and labor dispatch business (commission).

2. Total value of Income and Losses of reportable segments, and difference between quarterly consolidated income and comprehensive income and detail of difference (Section regarding difference adjustment)

(Unit 1 Million JPY)
(Note) Head Office Expenses are mainly comprised of expenses that are non-attributable to reportable segments, such as advertisement expenses, and management expenses regarding each consolidated head offices.

3. Information regarding impairment of non-current assets, goodwill, etc for each reportable segment


(Notable impairment of non-current assets)
No impairments attributed to the reportable segments.
Total impairments attributed to segments not included in the reportable segments is 23 million JPY.

(Significant changes in the amount of Goodwill)
In the "International Business" segment, our company had acquired shares of E.H. Utara Holdings Sdn. Bhd., making E.H. Utara Holdings Sdn. Bhd., UFA Utara Forwarding Agency Sdn. Bhd., Chalim Warehouse Sdn. Bhd., and E.H. Utara (Thailand) Co., Ltd. our consolidated subsidiary company, from which a Goodwill amount of 539 million JPY was calculated.

II. Current third consolidated cumulative period (April 1st, 2017 - December 31st, 2017)
1. Information regarding Net Sales, Income, and losses for each reportable segments
(Unit 1 Million JPY)


(Note) "Other" defines the business segments that are not included in the reportable segments, which include leasing of real estate, retail business, and labor dispatch business (commission).

2. Total value of Income and Losses of reportable segments, and difference between quarterly consolidated income and comprehensive income and detail of difference (Section regarding difference adjustment)

(Unit 1 Million JPY)

(Note) Head Office Expenses are mainly comprised of expenses that are non-attributable to reportable segments, such as advertisement expenses, and management expenses regarding each consolidated head offices.

3. Information regarding impairment of non-current assets, goodwill, etc for each reportable segment
None Applicable



Contact (Japanese Only)


Kojima/Doi
Public Relations IR Office
Tel: (03)3643-0292
Fax: (03)3643-3730