To our shareholders
We would like to express our sincere appreciation to all shareholders and investors for their continued support.
In the first three quarters of the fiscal year ending on June 30, 2019, orders received increased 10.5% from one year earlier to ¥58,444 million as the business climate for new orders remained favorable. The order backlog further increased during third quarter and was ¥52,698 million at the end of the quarter, 30.8% higher than one year earlier. Sales increased 2.9% from one year earlier to ¥46,291 million due to steady progress with work at large projects. Earnings increased as the gross profit margin for construction projects improved for all projects, mainly at projects for the national government that were completed in the third quarter. Gross profit increased 9.1% to ¥12,825 million, operating profit increased 7.3% to ¥9,873 million and profit attributable to owners of parent increased 8.3% to ¥6,771 million. All percentage increases in earnings were higher than the sales growth rate.
The environment for receiving new orders remained extremely favorable in the third quarter. We have received large orders from expressway companies and the volume of orders from national and local governments that were funded by the second supplementary government budget approved in Fiscal 2018 has been climbing since the middle of February. During the fiscal year’s first half, there was a big increase in expressway company orders as a share of the order backlog. We have used this growth as an opportunity to achieve the proper balance among sources of orders by focusing on receiving new orders from local governments. Due to these activities, the number and monetary value of local government orders in the third quarter were higher than one year earlier. Increasing the order backlog is normally difficult during January and March since there is a large volume of completions of national and local government projects during this period. Our backlog at the end of March was ¥52,698 million, ¥2,901 million more than at the end of December. This growth puts SHO-BOND in a good position for our performance in the next fiscal year.
SHO-BOND will conduct a two-for-one stock split with a record date of June 30, 2019. Our stock price has remained firm at around ¥8,000 over more than one year. At shareholders meetings and information meetings for individual shareholders, we have received requests from individuals for a stock split. We believe that using this split to lower the cost of one investment unit will increase the liquidity of SHO-BOND stock and attract a broader range of investors, including an increase in the number of individuals who own our stock.
As announced on February 8, 2019, SHO-BOND and Mitsui & Co., Ltd. established a joint venture SHO-BOND & MIT Infrastructure Maintenance Corporation on April 1, 2019. The new company plans to start operating its website soon and begin seeking business opportunities in markets outside Japan. All group companies will continue to vigorously implement numerous measures in order to achieve our financial targets and the goals of our Medium-term Business Plan. We sincerely ask for your continued understanding and support as we take the actions needed to accomplish our goals.
President and Representative Director
SHO-BOND Holdings Co., Ltd.