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Summary of President's speech / Main questions and answers 4Q FY2011

Financial Results Briefing for the fiscal year ended March 2012

Summary of President's speech

Medium-term Business Plan (FY 2012-2014)

I will explain the outline of the Medium-term Business Plan (FY 2012-2014) formulated this time.
The theme of the Medium-term Business Plan is “building a foundation towards future sustained growth.”

Although investments in construction are estimated to increase due to reconstruction demands from this fiscal year onward, they are expected to be reduced again in the long term.
Medium-term Business Plan focuses on two basic policies below:

  • fulfillment of social responsibilities imposed on the construction industry,
  • establishment of a business structure for the creation of high-added value,

and five business issues.

We shall strive to tackle issues such as post-earthquake reconstruction or development/improvement of social infrastructure with a heightened sense of social responsibilities imposed on the construction industry.

In the midst of shrinking construction market in the long term, we shall solve the pressing issue of securing profits with the following plans:

  • strengthening of the construction business as a core business,
  • establishment of an earnings structure in the overseas business,
  • strengthening of the fields where higher profitability is expected, and
  • strengthening of the business foundations starting with thorough internal control and risk management.

As we estimate our sales remaining equivalent to the current volume, we aim to increase operating income by 10 billion yen and reduce interest-bearing debts by approx. 100 billion yen compared to FY 2011.

Main questions and answers

Q:
How are you planning to accept orders in the domestic construction projects?
A:
Although the domestic construction market is severe, we still maintain the highest standard of profits in the construction industry. Domestic civil engineering work is also becoming more profitable than before. We shall continue to manage our business by securing appropriate profitability matching our quality of work and technology.
Q:
What are your plans on capital policies or return to stockholders?
A:
We shall place our priority on improving financial structure and reinstating reduced equity capital for the time being. We do not think that the current dividend standard is sufficient, so are planning to make mid- to long term recoveries in our performance and return profits to our stockholders.
Q:
What are the reasons for higher profitability in your building construction business?
A:
We are profitable because we focused on our strongest fields, such as airports, pharmaceutical factories, and world-class hotels domestically and internationally where we can remain competitive and advantageous.
Q:
Why do your profit plans seem rather modest?
A:
We have to be cautious since we are going through a difficult time clarifying the trend of the domestic construction market, labor costs, and the like.
Q:
Do your plans include accepting orders in reconstruction projects?
A:
No, they don't.