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Japanese Economy Improving
We are pleased to be able to report several encouraging trends in the Japanese
economy during the financial year ended March 31, 2004. Exports were up amid signs
of recovery in the global economy, and business confidence grew with improvements
in private-sector capital investment, corporate performance, and stock prices.
Further, these positive developments appear to be taking hold, with research institutes
forecasting GDP growth of more than 2% for the coming financial year.
Solid Performance and a Stronger Financial Position for
the Kajima Group
The first year of our medium-term business plan (for April 1, 2003 to March 31,
2006) yielded solid performance for the Kajima Group. Consolidated recurring profit,
at  37.7 billion, was
above target for the term, and we expect to reach 40.0
billion in the coming year. The target for the plan's final year is 42.0
billion, and we are confident that our group-wide effort to meet it will be successful.
Consolidated revenues for the financial year ended March 31, 2004
were down 13.5% to 1,621.7
billion. However, our gross profit margin improved to 9.0%, bringing gross profit
up 1.9% year on year to 146.2
billion. As a result, operating income reached 46.4
billion, up 27.9%. A consolidated net loss of 4.4
billion was posted due to an extraordinary loss of 43.3
billion recorded mainly on dissolution of the Kajima Pension Fund, which is projected
to reduce the Company's retirement benefit obligations by more than 20
billion.
We took other bold steps to improve Kajima's financial position
in the term under review. In October 2003, we raised 34.4
billion through a public offering, in line with our strategy to reduce interest-bearing
debt by shifting to equity financing of investments in long-term development and
private finance initiative (PFI) projects. Working to enhance the efficiency of
assets, we are closing in on the goal of improving Kajima's debt-equity ratio
to no more than 2.0 on a consolidated basis (480
billion in interest-bearing debt) and nearly 1.0 on a non-consolidated basis (300
billion in interest-bearing debt) by March 31, 2006. As noted above, we dissolved
the Kajima Pension Fund at the end of the term to convert to a more efficient
defined contribution pension system.
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Rokuro Ishikawa
Chairman |
Sadao Umeda
President |
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