To our shareholders
In the first quarter of the fiscal year ending on June 30, 2018, orders received were ¥18,849 million, 17.0% higher than in the first quarter of the previous fiscal year. Growth in orders from expressway companies was the main reason for this increase. As work progressed as planned on the order backlog, which was ¥7,286 million higher than one year earlier at the beginning of the first quarter, sales increased 15.4% to ¥12,320 million. Operating profit was up 23.1% to ¥2,094 million, ordinary profit increased 22.9% to ¥2,138 million and profit attributable to owners of parent increased 21.3% to ¥1,400 million.
As in prior years, expressway companies are placing orders for maintenance and repairs, recovery work following natural disasters, and other projects. In addition, the number of large-scale renewal and repair works needed to ensure the long-term safety of highways are increasing. As a result, the total volume of expressway orders is climbing. We are receiving an increasing number of large orders from the national government as well as the Metropolitan Expressway Company and other expressway companies. In the first quarter, we received more than 30 large-scale (at least ¥100 million) orders. As total first quarter orders were higher than sales, the order backlog increased 20.2% to ¥38,897 million at the end of the quarter.
The environment for receiving new orders is expected to remain favorable in the second quarter. In addition, as is every year, we plan to start posting sales in the second quarter for orders that were received from the national and local governments as well as expressway companies. However, large-scale orders, which are accounting for a rising share of the order backlog, will not produce sales for the time being. Consequently, there are no revisions at this time to the first half and fiscal year sales and operating profit forecasts. We will reexamine the forecast based on our first half performance.
“Inheriting and passing on social infrastructure to the next generation in good condition” is the mission that underlies all our activities. As a leading company in the infrastructure maintenance business, we will continue to strive to stabilize operations by acquiring large-scale orders and a strategy for receiving orders that aims for profitability while meeting the requirements of our customers. 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.