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Summary of President's speech / Main questions and answers 4Q FY2013

Financial Results Briefing for the fiscal year ended March 2014

Summary of President's speech

Market

  • Market competition is in trend to ease as we find some cancelation of biding in public works, but price competition is not yet to calm down in private sector.
  • We face the tightening of workforce cause of rush demand before consumption tax rising and also there is inflationary risk after receiving orders. Therefore, we will maintain cautious stance to taking new orders.

Profit

  • Although we could achieved the major target in previous fiscal year by receiving dividend from securitization project in real estate segment, there was significant profit deterioration in building construction. But we forecast of recovery in this fiscal year.
  • With careful examination we set operating income target in consolidated base as 47 billions of yen that is the same with target of medium term business plan.
  • And this time we could offer dividend increase of one yen because we are confident to ensure stable net profit.

Outlook

  • I am sure that self-reliant effort is the way for us to retrieve of profit in private sector as volume zone by avoiding price completion and setting out in value-added project.
  • We will see the launch of topical projects such as national stadium and new maglev Shinkansen in this year, and considerable commitment is still needed in disaster area in Tohoku.
  • As there is high expectation for domestic market to rise firmly, the difficult situation continues for a while facing both of limitation of capability to handle projects and inflationary risk.
  • Not just for construction industry, innovation is created in harsh business environment. So we are setting out the various R&D practical for serious shortage of construction worker.
  • By continuous R&D, execution of value-added projects, and cost reduction effort, we would like to meet various customer needs and also ensure recovery of profitability.

Main questions and answers

Q:
You received dividend from securitization project in real estate segment but also reported write down of real estate for sale. What is the detail of this write down?
A:
It occurred by amending the sales scheme or sales schedule.
Q:
Financial condition seems healthy enough. Do you plan to accelerate the investment in real estate business?
A:
We don't intend to take a risk with no expectation of specific profit at the time of investment.
Q:
How do you assume the recovery of profitability and further risks in building construction business?
A:
Cost inflation and price competition has not calmed down yet. Such situation was reflected to previous financial results and we expect the recovery in this fiscal year. The risk is inflation beyond assumption.
Q:
Why the number of employees will decrease this year in spite of strong demand.
A:
Practical capacity is enhanced by adding reemployment of retired person and outsourcing engineers.
Q:
Some subsidiaries decrease profit this fiscal year. Is there any macro modulation?
A:
Although there is some conservative assumption, the main factor is downturn from good performance in previous fiscal year and we don't see macro modulation in business condition of subsidiaries.