NEXCO CENTRAL (Central Nippon Expressway Company Limited)




April 23, 2008 Chairman Yano's regular press conference

Conference Summary

(Moderator)

Thank you for joining us while you are busy.
Now, let me start a regular press conference.


(Chairman)

NEXCO CENTRAL Hironori Yano, Chairman and CEOHello everyone.
I have a few projects to explain today.

First is the overview of the business. This time, the figures for the year up to March are also summarized in the preliminary figures, so I will report that as well. Regarding road conditions, toll revenue in March was down 2.2% year-on-year. The breakdown is minus 3.6% for highways and plus 13.8% for general pay. Highways have the same pattern as usual, but the increase in discount rates due to the spread of ETC is a factor in the decrease in sales. The general charge is due to the opening effect of the Ken-O Road.
The number of passing vehicles is + 3.5%. High speed is + 2.0%, general charge is + 9.7%.
The ETC discount amount is 16.2 billion yen, which is a 12.0% increase from 14.4 billion yen in the same month of the previous year. If there was no ETC discount, the revenue would be 67.9 billion, an increase of 0.9% from the same month of the previous year. Therefore, this month's ETC discount rate is 23.8%.
Next, for the year, the charge is minus 1.0%. Highways are minus 1.6%, and general charges are plus 6.1%. The reason is the same as before.
The total number of traffic is + 2.3%. High speed is + 2.2%, general charge is + 2.8%.
The discount amount of ETC throughout the year is 170.6 billion yen, which is 10.1% more than the previous year. If there was no ETC discount, the revenue would be 774.9 billion yen, up 1.3% from the previous year. Therefore, the ETC discount rate for fiscal 2007 was 22.0%.

The construction situation has not changed. One thing, as I mentioned earlier at the press conference, Tokai-Hokuriku Expressway is set to open on July 5th.

Regarding the successful bid rate for construction contracts for the main types of work, there were 13 successful bids in March, with an average successful bid rate of 88.72%. The cumulative total for the year is 86.68%.

Next is the usage status of ETC. March is 74.6%. The average for the year is 72.3%. Looking at the latest data, it was 75.3% in the week from April 11th to 17th. Weekdays are 77.4% and Saturdays, Sundays, and holidays are 69.6%, and the tendency is the same as usual when Saturdays and Sundays are low, but the situation is that Saturdays and Sundays are about to reach 70%.
The company has set an ETC penetration target of 74% for fiscal 2007, and we believe that the initial target was achieved with the figure of 74.6% for March.

SA sales are plus 11.7%. The cumulative total for the year is only slightly higher. The breakdown of 11.7% is + 7.3% for the food and beverage department, + 11.0% for the product sales department, minus 5.4% for the rest-in and bath, plus 18.3% for the gasoline department, and the absolute amount for the advertising department is small. However, 6 million yen has increased to 21 million yen.
The above is the current state of the business.

Next, I will explain the topics.
First of all, it was decided that Seisho By-Pass, which was damaged by Typhoon No. 9 that struck from September 6th to 7th last year, will be put into service on a provisional 4-lane basis. Thank you for your understanding and cooperation in the restoration work. The provisional 4-lane service will be available from 5 pm on April 25, the day after tomorrow, as shown in the material. One is in charge of our company in the paid section, and the other is in charge of Ministry of Land, Infrastructure, Transport and Tourism, which means that these can be opened at the same time. I have included the location map of the site, the photos at that time, and the latest photos, but the place we are in charge of is where you can best understand page 5, where there is a ramp bridge, and the main line is on the right side. is. Shortly after the accident, I went to see it and realized the strength of the wave front or the horror. Actually, Yokohama National Highway Office and our company Yokohama Regional Head Office announced this announcement in Kanto at the same time, and I will be able to report it today at the same time.

Next is the forecast of Expressway congestion during the GW period. This was already announced on April 4th, and the content is not new, but the GW is finally approaching, so I have created an opportunity to explain it again. It is generally common to our Central Japan jurisdiction and the whole country, but we expect that it will peak around May 3, 4, and 5. We hope that you can use these materials to create a comfortable travel plan, and we have added a national version of the Traffic Congestion Prediction Guide, so we would appreciate it if you could use it.
In connection with this, we will offer a half-price discount TDM for GW. We also made a press release on April 4, but we have attached two types of leaflets that were not attached at that time. Talent Becky is the character. There are two types, one for Tomei and one for Higashi-Meihan. Both Tomei and Tomei Osaka decided to continue on the In-bound line from April 26th to May 6th. Tomei is the second time for GW and the first time for Tomei Osaka. As for the time zone, we will divide it into morning and afternoon according to the traffic situation. We hope that many people will utilize it and alleviate traffic congestion as much as possible.

Next, we would like to inform you about the intensive work of Meishin, the refreshment work of Higashi-Meihan, and the nighttime closure of Isewangan Expressway. This was announced in the press on the 12th of last month. Today, we are announcing three new leaflets, the contents of the three places I just mentioned. The Meishin Expressway runs from May 12th to 19th, the Tomei Expressway runs from 26th to June 2nd, and Isewangan Expressway runs from the night of June 7th to 6am the next day. It is also posted on our WEB page, and we will strive for various public relations so that the driver will not be inconvenienced.

The following topics. We are pleased to inform you that we have decided to introduce "Quality Control Intermediate Inspection" in the construction from this year. As you know, from April 2005, the so-called Quality Assurance Act, "Act on Promoting Quality Assurance of Public Works," came into effect. We have been providing quality control patrol guidance in order to make use of that idea. Also, in July of last year, we set up a technical inspection department that was independent of the business division to deal with it. From this year's construction, in addition to the Shunkou inspection, we will introduce a "quality control intermediate inspection" during the construction work. The outline is as shown in the material, but the contents are construction management, quality control, work, such as dispatching inspectors to the site, doing not only once but twice for low bid construction, making unannounced inspection possible, etc. The idea is to use the final inspection results as part of the construction grade evaluation, such as shape and workmanship. There are quite a few cases, but I would like to do my best and work on ensuring quality.

Next, although this is a new announcement, we have decided to release a bus travel product that allows you to tour the Tokai-Hokuriku Expressway before it opens. We decided to partner with Hankyu Travel International Co., Ltd. to combine a walk through the world heritage sites of Shirakawa-go and Takayama, a walk through the Tokai-Hokuriku Expressway before the opening, and a tour of the Hida Tunnel. The main premise is that there will be no hindrance to the construction, and as you can see here, it will be held for 5 days, 5 days in late June.
There is a map on the next page, but you can walk around Nagoya early in the morning, go around Miboro, and see the courses of Shirakawago, Hida Tunnel, and Takayama. I'm thinking about sightseeing and lunch in Shirakawa-go, sightseeing in Takayama, taking a hot spring, etc., and I hope that many people can use it.
We have previously announced that we have registered for the travel business, and this is one of the planned products.

And finally, this is another new announcement, we have obtained a national currency issuer rating AAA. This is a rating of a company called Moody's, and until now I had received a triple A rating from R & I and Rating and Investment Information, Inc., but I've been preparing for another company, and now Moody's I got a triple A rating from. This will create an environment for agile corporate bond issuance utilizing the issuance registration system, and we believe that we can steadily Large the voluntary procurement of funds. By reducing the government guarantee year by year and finally reducing it to zero, we are steadily proceeding as planned. I think this second rating will be very useful for achieving those goals.

That's all for my opening explanation.

 


(Moderator)

Then, thank you if you have any questions.


(Reporter)

Regarding the launch of travel products that allow you to tour the construction site of the Tokai-Hokuriku Expressway, please tell us your aim again, how many people you expect, and your sales goals.


(Chairman)

After all, the most eye-catching eyes are Shirakawa-go and Takayama. As I announced earlier, it is a combination of the desire to have many people see our Hida Tunnel and the difficult construction of the century before it actually opens and to know the situation. .. I have no idea how many applications there will be, but fortunately Hankyu Travel International Co., Ltd. has the ability to provide enough buses, so I think it's okay to have quite a lot of applications. At this stage, we do not have a target for the number of people or sales, but we are grateful that you can see the Hida Tunnel, so we would like to strive for service.


(Reporter)

I think that there will be a lot of demand in the future, but this time I will miss the time of scraping such as Golden Week. Did you have a desire to make a big contribution to your income in advance?


(Chairman)

The round trip on the Tokai-Hokuriku Expressway will certainly increase the number of buses operating due to the increase in users, which will contribute to our income. However, my first motivation was to have a look before the opening on July 5th. As a result, the number of visitors and tour participants will increase, and if the income increases, I think it would be better.


(Reporter)

I would like to ask you a little more about this bus trip, but how do you and Hankyu Travel International Co., Ltd. divide the profits?


(Chairman)

I would like to forgive the amount of our company due to the relationship between the two companies, but let me just say the idea, is it the planning fee because we first created the idea, or something similar is our company It will be the income of. The actual application is also received through our WEB site, but since the procedure itself is accepted by Hankyu Travel International Co., Ltd., I think that most of the income will go to Hankyu Travel International Co., Ltd. I think it's not a big deal to make a direct profit to our company, but rather, I've just started the travel business, so I wanted to do various things, so I will increase sales in the travel business in the future. I would like to create such a business structure so that I can make a profit. I'm still in the beginning, so I don't expect much big things yet.


(Reporter)

In the era of the old road public corporation, I think that I would never have shown it because it would affect the progress of construction or if something should happen, but the chairman did not change that way of thinking. Was it?


(Chairman)

No, this is a young person's idea. Anyway, I'm thinking that I should be open and have as many people as possible see it, so I decided to do a business that seems to be a private company. I think I didn't register the travel industry when I was a road corporation. We are in the travel industry, using the assets of roads, and because it is an area with abundant tourism resources, we also utilize such things, and the question is whether the travel industry will become a pillar of our business even if it is small. Although I had raised it. Fortunately, this is an idea that our department in charge came up with after thinking hard. It can be said that it is a private business.


(Reporter)

Has the problem of using it for your company's business before it opens been cleared internally?


(Chairman)

Since we saw the Hida Tunnel, we have no idea of paying a fee. This is the same idea as the opening of the area before the opening, and it is the sightseeing part of Hida Takayama and Shirakawago that customers pay for this tour. I'm just going to provide a quick valve, so I'm thinking of paying for this. I also have a souvenir called "Toru Ishinuki", but I'm thinking of taking it home. Therefore, I do not consider the direct income from the Hida Tunnel.


(Reporter)

I don't feel like we are ahead of ourselves, but I wonder if there was something like an internal discussion, not about income.


(Chairman)

There is no such internal discussion. Since the opening was delayed by 3 months, I was discussing various things to let people know as much as possible, and then I thought that it was a very natural idea to incorporate it into the sightseeing tour. think. If I miss this time, I will never have such an opportunity again, so I made such a plan.


(Reporter)

Could you tell me the time schedule of the tour?


(Chairman)

In order, there are departures from the west exit of Nagoya Station at 7:45 am and 8:45 am. After departure, go to Shirakawa-go, a World Heritage Site, through Lake Miboro, walk around the village, and then have lunch. I will. From there, enter the section under construction on the Tokai-Hokuriku Expressway, pass through the Hida Tunnel, get off at Hida Kawai PA, and tour the vicinity of the tunnel entrance. After that, leave the section under construction at Hida Kiyomi IC, take a walk through the old streets of Takayama, eat Hida beef dishes, etc., and finally take a bath at "Hidamari no Yu" and then return to the west exit of Nagoya Station. Is 20:15 or 21:15, such a process.


(Reporter)

I would like to ask about the traffic volume of Expressway. Gasoline prices remained high until the end of March due to the effects of high crude oil prices. I don't think the situation in April, when gasoline prices fell, has yet come out, but could you tell us how much impact it had on your business under the situation where gasoline prices were high until the end of March?


(Chairman)

I think we are a rather blessed company. Since I am in charge of a section with heavy traffic, both traffic flow and logistics are active, and if you look at the year up to March, as you can see in today's material, the number of traffic is stable and the same period of the previous year. The ratio continues to be in the + 2% range. In March alone, the situation is + 3.5%, so I think that the situation is such that the economy is good and various favorable conditions overlap. I think the price of oil is also an important factor, but in the economic situation, how the economy moves will be a big final result. When it comes to the decrease in logistics and personnel flow, it will have a huge impact, but I don't think that has happened yet. It depends on the future trend of oil prices, and there are various factors that influence the economic trend, such as the problem of subprime mortgages in the United States, so we must carefully look at these factors and decide ahead. I'm not optimistic at all, but as far as I can see the factual data, I think I've managed to get around until March.


(Reporter)

Regarding related things, I think that the number will probably increase further in April due to the lower gasoline price, but what are your thoughts on the outlook if the gasoline price rises again after May? Do you have


(Chairman)

I agree. I think that the holidays in May will have the greatest impact on individual driver customers, but what is the price at that time? How does the price go up when it goes up? I think it depends on whether you go up fast or slowly. When the price of oil goes down, I think the price goes down much faster than expected, but if it goes up slowly, it will have little effect on traffic volume, but if it goes up suddenly, it will have an effect. I think it will come. I can't even predict that the numbers will be like this. So, if you are watching the situation and the movement of the Diet becomes clear as soon as possible, each driver will be prepared, so that will be offset in various ways and the result will not come out. Is not it.


(Reporter)

Would you please tell me if there are any prospects, such as what percentage of traffic volume is likely to decrease, what percentage of income is likely to decrease, or something in the numbers?


(Chairman)

Hey it doesn't have numbers. We will quietly adapt to changes in the situation, and we hope that there will be no major confusion.


(Moderator)

If you have no other questions, this is the end of the 30th regular press conference.
Thank you very much for your busy schedule today.


(Chairman)

Thank you very much.