Message from the President

Takanori Ono, President

We, Sumitomo Warehouse Group, have provided our customers with high-quality services for their satisfaction through our business since our incorporation in 1899. We would like to hereby express our deep gratitude for your generous support and cooperation.

Our group performance for the fiscal year ending March 2017 saw a steady growth of the warehouse business centered on the archive business and increases in revenue from the land transportation business with the expansion of e-commerce-related transportations and from rent owing to additional operations of commercial facilities in the real estate business. However, a sharp decline in ocean freight market price and a decrease in transactions in the marine transportation business led to the consolidated operating revenue of ¥165.256 billion (down 4.1% from the previous year). Due to this, the consolidated operating income was at ¥9.189 billion (down 14.7% from the previous year), ordinary income was ¥11.327 billion (down 11.4% from the previous year), and profit attributable to owners of parent was ¥7.802 billion (3.5% down from the previous year).

In the meantime, our performance on a non-consolidated basis was favorable and we plan to pay dividends at the rate of ¥15.50 (¥7 for the midterm and ¥8.50 for the end of the year) per share for the fiscal year ended March 2017. This is ¥1.50 up from the previous year and recorded an increase in four successive years.

The recent Japanese economy is expected to mildly recover amid the improved employment and income situations in Japan. However, international economic and political trends are highly unpredictable, and we are concerned that these factors would impact the economy in Japan.

Under these circumstances, our group has newly developed "Challenge 120," a three-year medium-term business plan beginning in fiscal year 2017 and ending in fiscal year 2019, which marks the 120th year of our foundation. With an operating income of ¥12 billion as the goal for 2019, we aim to sustainably grow and enhance our enterprise value and focus on further increasing returns to our shareholders, while simultaneously upholding our financial stability and taking on new challenges to enhance our business bases for further advancements.

I would like to reiterate my sincere thanks to shareholders and investors for their understanding, and I look forward to your continued support.

President Takanori Ono