RNS Number:3378S
Kajima Corporation
21 November 2003
KAJIMA CORPORATION
NOTICE OF INTERIM CONSOLIDATED AND NON-CONSOLIDATED
FINANCIAL STATEMENTS
(For the Period from April 1 to September 30, 2003)
1. Date of the Board of Directors' Meeting to Approve
the Interim Consolidated Financial Statements : November 21, 2003
2. Financial Highlights
(1) Results of Operations
First Half of Financial Years from April 1 to September 30
-----------------------------------------------------------
Millions of Yen Thousands of
U.S. Dollars
------------ ----------- -----------
2003 2002 2003
----------- ----------- -----------
Revenues Yen 783,372 Yen 822,792 $ 7,057,405
Operating 17,011 12,505 153,252
Income
Net 6,080 2,472 54,775
Income ----------- --- ----------- -----------
Yen U.S. Dollars
------------------------------- -----------
Basic Net Yen 6.35 Yen 2.58 $ 0.06
Income per
Share
(2) Assets and Equity
As of September 30
--------------------------------------------------------
Millions of Yen Thousands of
U.S. Dollars
----------- ----------- -----------
2003 2002 2003
----------- ----------- -----------
Total Yen 1,896,364 Yen 2,081,334 $ 17,084,360
Assets
Total 180,148 168,777 1,622,955
Stockholders Equity
Equity/ 9.5 8.1 9.5
Assets Ratio
(%)
Yen U.S. Dollars
------------------------------------- ------------
Equity per Yen 188.32 Yen 176.07 $ 1.70
Share
(3) Cash Flows
First Half of Financial Years from April 1 to September 30
-------------------------------------------------------------
--------------------------------- ------------
Millions of Yen Thousands of
U.S. Dollars
---------------------------------
2003 2002 2003
----------- ----------- -----------
-Operating Yen 35,556 Yen 4,243 $ 320,324
Activities
Investing (8,225) (6,490) (74,099)
Activities
Financing (5,444) (3,626) (49,045)
Activities
Cash and Cash
Equivalents,
End of the 108,739 89,548 979,631
Period
(4) Forecast of major financial results for the financial year from April 1,
2003 to March 31, 2004
Year ending March 31, 2004
-------------------------------------------------------
Millions of Yen Thousands of
U.S. Dollars
----------------- ------------
Revenues Yen 1,680,000 $ 15,135,135
Net Loss (5,000) (45,045)
(5) Basis of Presentation
(a) The accompanying consolidated financial statements of Kajima Corporation
(the "Company") and its consolidated subsidiaries (together, the
"Companies") have been prepared in accordance with the provisions set forth in
the Japanese Securities and Exchange Law and its related accounting regulations
and in conformity with accounting principles and practices generally accepted in
Japan, which are different in certain respects as to application and disclosure
requirements of International Financial Reporting Standards (IFRSs). Differences
between the accounting policies followed by the Companies and IFRSs are
described in Note 2. The consolidated financial statements are not intended to
present the consolidated financial position and the consolidated results of
operations and cash flows in accordance with accounting principles and practices
generally accepted in countries and jurisdictions other than Japan.
In preparing this Notice (the "NOTICE") of the consolidated financial
statements, certain reclassifications and rearrangements have been made to the
NOTICE issued domestically in order to present these consolidated statements in
a form which is more familiar to readers of these statements outside Japan. In
accordance with accounting procedures generally accepted in Japan, certain
comparative disclosures are not required to be and have not been presented
herein.
The accounts of the Company and its Japanese subsidiaries are maintained in
Japanese yen, the currency of the country in which they are incorporated and
principally operate. The U.S. dollar amounts included in Financial Highlights
above and elsewhere in the NOTICE are presented solely for convenience of the
reader.
Such dollar amounts have been translated from yen at the approximate exchange
rate in Tokyo on September 30, 2003 of Yen111 = U.S. $1. The translations should
not be construed as representations that Japanese yen have been, could have
been, or could in the future be, converted into U.S. dollars at that or any
other rate.
(b) Scope of Consolidation
The consolidated financial statements for the first half of financial year from
April 1 to September 30, 2003 include the accounts of the Company and its 85
significant subsidiaries. Under the control or influence concept, those
companies in which the Company, directly or indirectly, is able to exercise
control over operations are fully consolidated, and those companies over which
the Companies have the ability to exercise significant influence are accounted
for by the equity method.
Other 62 subsidiaries were not consolidated as they would not have a material
effect on the accompanying consolidated financial statements.
All unconsolidated subsidiaries and 34 affiliates were accounted for using the
equity method.
The excess of the cost of an acquisition over the fair value of the net assets
of the acquired subsidiary and affiliate at the date of acquisition is being
amortized over a period of 5 years. All significant inter-company balances and
transactions have been eliminated in consolidation. All material unrealized
profit included in assets resulting from inter-company transactions is
eliminated.
The breakdown and changes of fully consolidated companies and companies
accounted for using the equity method are summarized below:
i) Breakdown as of September 30, 2003
Number of consolidated : 85
subsidiaries
Principal consolidated : Taiko Trading Co., Ltd.
subsidiaries Kajima Leasing Corporation
Kajima Road Co., Ltd.
Kajima U.S.A. Inc.
Kajima Europe B.V.
Kajima Overseas Asia Pte. Ltd.
Number of unconsolidated : 62
subsidiaries
accounted for using the ARTES Corporation, Japan Sea Works Co., Ltd. and
equity method 60 other companies
Number of affiliated : 34
companies
accounted for using the Katabami Kogyo Co., Ltd., Yaesu Book Center Co.,
equity method Ltd. and 32 other companies
ii) Changes in the first half of financial year from April 1 to September 30,
2003
Newly consolidated : 3 subsidiaries of Kajima Europe B.V.
companies
Companies excluded from : 1 subsidiary of Kajima U.S.A. Inc. and 1
consolidation subsidiary of Kajima Europe B.V.
Companies newly accounted
for
using the equity method : 1 subsidiary
Companies excluded from the : 1 affiliated company
equity method
(c) Per Share Information
Basic net income per share is computed by dividing net income available to
common stockholders by the weighted-average number of common shares outstanding
for the period, retroactively adjusted for stock splits. The weighted-average
number of common shares used in the computation for the first half of financial
years from April 1 to September 30, 2003 and 2002 were 956,671,298 and
958,686,086 shares, respectively.
Equity per share data is calculated using the number of shares at the end of
each period.
Diluted net income per share is not disclosed because the Companies have nothing
which might dilute the per share information for the first half of financial
year from April 1 to September 30, 2003 and 2002, respectively.
3. Further information is available at :
Mr. Hironobu Takano
General Manager
Accounting Department
Treasury Division
Kajima Corporation
2-7, Motoakasaka 1- chome,
Minato-ku, Tokyo 107-8388, Japan
Telephone (03)3404-3311
International 81-3-3404-3311
Facsimile (03)3746-7168
International 81-3-3746-7168
I.Summary and Forecast of Business Performance
(a) Business Performance
1.Summary of Business Performance for the first half of financial year from
April 1 to September 30, 2003
Overview
As of the mid-point of the current financial year, the jury still seemed to be
out on whether the current economic uptrend would represent the beginning of a
full-fledged recovery. We saw positive signs in robust exports, increased
capital spending by some businesses, better corporate earnings and the stock
market rallies. Negatives, however, abounded. Land values kept falling in a
continuing deflationary environment. Weak job markets, combined with wage
erosion, served to constrain personal spending. On top of this came the recent
surges of the Japanese yen which tend to put a damper on further export-led
growth.
Domestic construction markets continued to scale down as a whole. The public
sector, both on local and central government levels, awarded less projects under
tight budget constraints, while the private sector demand for construction
services rebounded in certain manufacturing segments.
In overseas markets, the U.S. economic recovery as well as China?fs continued
growth provided causes for optimism.
Against such economic backdrop, the Companies performed during the first half of
this financial year as follows.
Consolidated revenues for this six-month period came in at Yen783.3 billion,
down 4.8% from the same period of last year, reflecting the setbacks in total
construction revenues of the Company and its subsidiaries.
An improved gross profit margin on a lower consolidated revenue base resulted in
a consolidated gross profit that is roughly on a par with the same period of
last year. Furthermore, the reduction in selling, general and administrative
cost of the Company and its domestic subsidiaries helped the consolidated
operating profit Yen17.0 billion, up 36.0% from the same period of last year.
Consolidated net income reached Yen6.1 billion, up 145.9% from the same period
of last year.
Segment Performance
(1) Construction Operations
i) Domestic Operations
New construction orders for the Group companies for first half of this year
totaled Yen592.7 billion, up 12.6% from the same period of last year. The
Company itself accounted for Yen122.3 billion in civil engineering contracts (up
8.9% from the same period of last year) and Yen414.7 billion in architectural
construction contracts (up 17.1% from the same period of last year), for a total
of Yen537.0 billion (up 15.1% from the same period of last year). The civil
engineering business advanced mainly due to increase in private orders from the
oil sector, while the architectural construction business increased in contracts
both from manufacturing and non-manufacturing clients.
Group revenues for the period stood at Yen 537.7 billion, a 11.5% slide from the
same period of last year, mostly attributable to the drops in revenue to the
Company, Taiko Trading Co., Ltd. and others. The Company registered total
revenues of Yen491.9 billion (down 11.7% from the same period of last year),
with Yen131.0 billion in civil engineering contracts (down 9.5% from the same
period of last year) and Yen361.0 billion in architectural construction
contracts (down 12.5% from the same period of last year). The
percentage-of-completion method, adopted in April of 2000, had tended to inflate
reported period revenues, but such impact mostly ceased during the current
period.
ii) Overseas Operations
New orders received amounted to Yen51.7 billion (down 31.1% from the same period
of last year), which breaks down to Yen42.8 billion awarded to overseas
subsidiaries and Yen8.9 billion secured by the Company and its domestic
subsidiaries. This meant that good results for the same period of last year,
when large-scale infrastructure contracts poured in, were unsustainable.
Total revenues reached Yen63.4 billion (up 35.2% from the same period of last
year), consisting of Yen50.0 billion posted by overseas subsidiaries and Yen13.4
billion by the Company and its domestic subsidiaries.
iii) Profit Margins
The Group finished the semi-annual period with a gross profit of Yen43.2
billion, down Yen0.8 billion from the same period of last year. This means that,
while the Group companies?f gross profit margin on completed construction jobs
improved from 6.7% last year to 7.2% this year, it was swamped by the negative
impact from an 8.1% decline in total revenue base . The Company itself enjoyed a
year-on-year improvement in the same margin from 6.8% to 7.4%.
Group?fs construction business generated consolidated operating income of Yen2.5
billion, up 6.2% from the same period of last year, as a result of the reduction
of selling, general and administrative expenses.
iv) Principal works awarded during the first half of financial year ended
September 30, 2003
( Client ) ( Works )
Mitsubishi Estate Co., Ltd. Tokyo Building
UDX Special Purpose Company Akihabara IT Center UDX Building
ORIX Real Estate Co., Ltd.; Mitsui Fudosan Benten 1-Chome Multi-Purpose
Co., Ltd.; Hankyu Realty Co., Ltd. Complex
Teikoku Oil Co., Ltd. Shizuoka Pipeline
Pioneer Corporation Pioneer Display Products
Corporation, Yamanashi Plant #1
Japan LPG Storage Co., Ltd. The National LPG Storage Project,
Kurashiki Base 1
Note: All of the above are the contracts awarded to the Company.
v) Principal works completed during the first half of financial year ended
September 30, 2003
( Client ) ( Works )
Kyodo News Shiodome Media Tower
Mori Trust Co., Ltd. MARUNOUCHI TRUST TOWER NORTH
Nippon Express Co., Ltd. New Headquarters Building
Teikoku Oil Co., Ltd. Matsumoto-Kofu Pipeline
UMCi Pte. Ltd. FAB 12S Main Contractor Works (*)
Izumi Co., Ltd. Youme Town Kurume Store
Note: Project with (*) was awarded to Kajima Overseas Asia Pte. Ltd.
(Singapore); all the rest are projects of the Company.
(2)Real Estate Operations
Consolidated revenues from real estate operations advanced to Yen126.2 billion,
up 16.6% from the same period of last year, with Yen93.0 billion from domestic
operations and Yen33.3 billion from overseas. The big jump was due to revenues
posted by Kajima Shiodome Kaihatsu co., Ltd. for the sale of a large project in
downtown Tokyo. Consolidated operating income from real estate operations
overall was Yen9.6 billion, down 8.9% from the same period of last year.
(3)Others
Other segments, consisting mainly of processed construction materials and design
/engineering and property management services, reported consolidated revenues of
Yen56.0 billion (down 7.2% from the same period of last year) and consolidated
operating loss of Yen0.5 billion (Loss of Yen0.3 billion was reported for the
same period of last year).
2. Declaration of Dividends
We plan on declaring an ordinary semi-annual payout of Yen2.5 per share.
3. Business Performance Forecast for the Whole Financial Year
While Japan?fs real GDP growth for the financial year is expected to be above
zero, negative forces, such as slow deflationary trends, strengthening of the
Japanese Yen, weak consumer spending, and uncertainties in the global economy,
are also likely to remain over the short run. We expect a real economic revival
to come about only after these are resolved.
Domestically, we expect the private sector to continue on with a mild upward
trend in capital investments, whereas further reductions in public works
spending are likely throughout the period under the tight budget constraints;
thus, we are looking at an industry where competition is to intensify in
shrinking markets.
We expect positive spillovers from the expanding U.S. economy and the robust
growth of China. For the overseas markets in general, however, it remains to be
seen how extensive such effects will be.
Finally, the Company projects its consolidated financial performance as follows:
Revenue is projected at Yen1,680 billion, down 10.4% from last year.
However, net loss is projected at Yen5 billion for this accounting period. This
is a direct result of a Yen40 billion extraordinary loss to be posted in
conjunction with the proposed dissolution of Kajima Pension Fund and the
adoption of a defined-contribution program. All of this is part of our bid to
revamp the Company?fs retirement benefit program and thereby establish a solid
foundation for superior financial performance.
Shown below are contract award and revenue targets for the financial year
respectively of the Group and the Company itself broken down by segment.
The Group aims at winning construction contract awards worth Yen1,160 billion
from domestic works and Yen150 billion from overseas. The Company itself expects
to secure construction contracts worth Yen1,034 billion from the domestic market
and Yen36 billion from overseas.
(b) Financial Condition
Net cash provided by operating activities was a surplus of Yen35.6 billion (up
738.1% from the same period of last year). This resulted from net income before
income taxes and minority interests of Yen12.8 billion, which was adjusted,
among others, by adding back depreciation and an increase provision for doubtful
account, which was then increased, among others, by a Yen127.9 billion decrease
of receivables and reduced, among others, by a Yen97.9 billion decrease in
payables and Yen13.5 billion decrease in advances received.
Net cash used in investing activities amounted to Yen8.2 billion (up 26.7% from
the same period of last year) as payment for purchase of property and equipment
etc. exceeded proceeds from sales of marketable and investment securities etc.
Net cash used in financing activities amounted to Yen5.4 billion (up 50.1% from
the same period of last year), most of which consisted the amount to reduce
interest-bearing liabilities of the Consolidated Group and paid out in
dividends.
Thus, the balance of cash and cash equivalents as of the end of first half of
financial year totaled Yen108.7 billion, up Yen22.0 billion from the end of last
financial year.
II.CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
As of September 30
--------------------------
--- ---------
Millions of Yen Thousands of
U.S. Dollars
------------------ ---------
2003 2002 2003
------------------------ --------- --- --------- --- ---------
ASSETS
------------------------ --------- --- --------- --- ---------
CURRENT ASSETS:
Cash and cash equivalents Yen 108,739 Yen 89,548 $ 979,631
Marketable securities 145 804 1,306
Notes and accounts 351,014 343,570 3,162,288
receivable-trade
Allowance for doubtful (12,113) (12,881) (109,126)
accounts
Inventories:
Construction projects in 217,111 358,522 1,955,955
progress
Development projects in 236,864 229,108 2,133,910
progress, real estate and
other
Deferred income taxes 68,861 77,772 620,369
Other current assets 174,344 193,709 1,570,667
--------- --------- ---------
Total current assets 1,144,965 1,280,152 10,315,000
--------- --------- ---------
PROPERTY AND EQUIPMENT:
Land 174,174 179,096 1,569,135
Buildings and structures 333,233 331,029 3,002,099
Machinery and equipment 112,676 116,469 1,015,099
Construction in progress 29,446 38,905 265,279
--------- --------- ---------
Total 649,529 665,499 5,851,612
Accumulated depreciation (254,898) (252,347) (2,296,378)
--------- --------- ---------
Net property and equipment 394,631 413,152 3,555,234
--------- --------- ---------
INVESTMENTS AND OTHER ASSETS:
Investments in securities 180,161 193,454 1,623,072
Investments in unconsolidated 26,232 23,945 236,324
subsidiaries and affiliates
Long-term loans receivable 49,988 48,447 450,342
Long-term loans to
unconsolidated subsidiaries and
affiliates
23,315 25,626 210,045
Allowance for doubtful (69,539) (67,217) (626,477)
accounts
Deferred income taxes 77,843 81,085 701,288
Other 68,768 82,690 619,532
--------- --------- ---------
Total investments and other 356,768 388,030 3,214,126
assets --------- --------- ---------
TOTAL Yen 1,896,364 Yen 2,081,334 $ 17,084,360
========= ========= =========
As of September 30
Millions of Yen Thousands
of
U.S.
Dollars
2003 2002 2003
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings Yen 135,112 Yen 163,660 $ 1,217,225
Commercial paper 28,000 84,500 252,252
Current portion of long-term debt 82,691 103,470 744,964
Notes and accounts payable-trade 426,145 416,578 3,839,144
Advances received:
Construction projects in progress 211,638 339,684 1,906,649
Development projects in progress, 35,530 32,477 320,090
real estate and other
Income taxes payable 4,420 1,336 39,820
Accrued expenses 23,938 27,200 215,658
Other current liabilities 201,788 204,196 1,817,910
Total current liabilities 1,149,262 1,373,101 10,353,712
LONG-TERM LIABILITIES:
Long-term debt 345,629 306,491 3,113,775
Deferred income taxes on revaluation 11,325 10,406 102,027
of land
Liability for retirement benefits 96,847 93,918 872,495
Allowance for loss on development 21,695 22,156 195,450
projects
Equity loss in excess of investments
in and loans to unconsolidated
subsidiaries and affiliates 11,515 21,137 103,739
Other long-term liabilities 64,794 70,247 583,730
Total long-term liabilities 551,805 524,355 4,971,216
MINORITY INTERESTS 15,149 15,101 136,477
CONTINGENT LIABILITIES (See Note 5)
STOCKHOLDERS' EQUITY:
Common stock, authorized,
1,920,000,000 shares;
issued 961,312,022 shares 64,071 64,071 577,216
Additional paid-in capital 32,147 32,147 289,613
Retained earnings 41,893 34,682 377,415
Revaluation surplus of land 16,012 14,149 144,252
Unrealized gain on available-for-sale 25,803 24,225 232,459
securities
Foreign currency statements 1,497 404 13,486
translation adjustments
Treasury stock - at cost, 4,696,062
shares in 2003
and 2,733,242 shares in 2002 (1,275) (901) (11,486)
Total stockholders' equity 180,148 168,777 1,622,955
TOTAL Yen Yen $
1,896,364 2,081,334 17,084,360
CONSOLIDATED STATEMENTS OF INCOME
First Half of Financial Years from April
1 to September 30
Millions of Yen Thousands
of
U.S.
Dollars
2003 2002 2003
REVENUES:
Construction projects Yen 601,102 Yen 654,136 $ 5,415,333
Real estate and other 182,270 168,656 1,642,072
Total revenues 783,372 822,792 7,057,405
COST OF REVENUES:
Construction projects 557,878 610,132 5,025,928
Real estate and other 158,869 146,018 1,431,252
Total cost of revenues 716,747 756,150 6,457,180
Gross profit 66,625 66,642 600,225
SELLING, GENERAL
AND ADMINISTRATIVE EXPENSES 49,614 54,137 446,973
Operating income 17,011 12,505 153,252
OTHER INCOME (EXPENSES):
Interest and dividends 2,129 3,079 19,180
Interest expense (5,411) (6,261) (48,748)
Equity in earnings (losses) of
unconsolidated subsidiaries and
affiliates 44 (184) 396
Valuation loss on marketable and (271) (1,889) (2,441)
investment securities
Gain on sales of marketable and 1,394 1,883 12,559
investment securities-net
Loss on sales or disposals of (149) (215) (1,342)
property and equipment-net
Provision for doubtful accounts (2,026) (2,636) (18,252)
Other-net 83 (2,019) 747
Other expenses-net (4,207) (8,242) (37,901)
INCOME BEFORE INCOME TAXES AND
MINORITY INTERESTS 12,804 4,263 115,351
INCOME TAXES
Current 4,294 1,518 38,685
Deferred 3,282 581 29,567
Total income taxes 7,576 2,099 68,252
MINORITY INTERESTS 852 308 7,676
NET INCOME Yen 6,080 Yen 2,472 $ 54,775
CONSOLIDATED STATEMENTS OF CASH FLOWS
First Half of Financial Years from April
1 to September 30
Millions of Yen Thousands
of
U.S.
Dollars
2003 2002 2003
OPERATING ACTIVITIES :
Income before income taxes and minority Yen 12,804 Yen 4,263 $ 115,351
interests
Adjustments for :
Income taxes-paid (3,126) (2,471) (28,162)
Depreciation and amortization 10,197 10,789 91,865
Provision for doubtful accounts 2,185 4,782 19,685
Equity in (earnings) losses of
unconsolidated subsidiaries and
affiliates
(44) 184 (396)
Valuation loss on marketable and 271 1,889 2,441
investment securities
Loss on sales or disposals of property 149 215 1,342
and equipment ?? net
Gain on sales of marketable and (1,394) (1,883) (12,559)
investment securities ?? net
(Increase) decrease in receivables 127,868 132,518 1,151,964
(Increase) decrease in inventories 11,087 (13,944) 99,883
Increase (decrease) in payables (97,928) (76,549) (882,234)
Increase (decrease) in advances received (13,452) (25,870) (121,189)
Increase (decrease) in liability for 2,445 (745) 22,027
retirement benefits
Other net (15,506) (28,935) (139,694)
Net cash provided by operating activities 35,556 4,243 320,324
INVESTING ACTIVITIES:
Payment for purchases of marketable and (12,933) (4,605) (116,514)
investment securities
Proceeds from sales and redemption of
marketable
and investment securities 5,933 14,581 53,450
Payment for purchases of property and (4,741) (15,053) (42,712)
equipment
Proceeds from sales of property and 1,410 4,363 12,703
equipment
Disbursements for loans (1,799) (3,408) (16,207)
Proceeds from collection of loans 1,035 1,782 9,324
Other ?? net 2,870 (4,150) 25,857
Net cash used in investing activities (8,225) (6,490) (74,099)
FINANCING ACTIVITIES:
Decrease in short-term borrowings 14,047 18,096 126,550
Net issuance (repayment) of commercial (26,000) 500 (234,234)
paper
Proceeds from issuance of long-term debt 46,780 31,645 421,441
Repayment of long-term debt (62,523) (65,672) (563,270)
Proceeds from issuance of bonds 24,764 15,231 223,099
Cash dividends paid (2,389) (3,347) (21,523)
Other ?? net (123) (79) (1,108)
Net cash used in financing activities (5,444) (3,626) (49,045)
FOREIGN CURRENCY TRANSLATION ADJUSTMENT
ON CASH AND CASH EQUIVALENT 107 (1,066) 965
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 21,994 (6,939) 198,145
CASH AND CASH EQUIVALENTS, BEGINNING OF 86,745 97,015 781,486
YEAR
CASH AND CASH EQUIVALENTS OF SUBSIDIARIES
EXCLUDED FROM CONSOLIDATION, BEGINNING OF
YEAR - (528) -
CASH AND CASH EQUIVALENTS, END OF THE Yen 108,739 Yen 89,548 $ 979,631
PERIOD
This information is provided by RNS
The company news service from the London Stock Exchange
END
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