FY2007 Kobe City IR Seminar. FY2006 Results AA. (Stable) KOBE CITY.

Transcription

1 FY2007 IR Seminar FY2006 Results AA (Stable) KOBE CITY 1

2 Table contents Toward Creation Affluent City Table contents P 1 Expenditure by item P11 Overview P 3 Bond outsting P12 Size Economy Industrial Structure P 5 P 6 Driving for systematic Administrative/Financial P13 Reform Public Subscription Bonds Issuing Plan P15 Attracting Businesses P 7 System Local Authority Bonds in Japan P16 FY2006 Results General Accounts P 9 Tax exemption for interest on transfer local authority bonds P17 City Tax Revenue P 10 1

3 1. Today Hyogo Pref. Kyo Pref. Kyo Osaka Int l Airport Akashi Strait Bridge Shin-Kobe Kobe Airport Shin-Osaka Kansai Int l Airport 2 Kinki Expressway Expressway Maizuru-Wakasa Expressway Chugoku Longitudinal Expressway Sanyo Expressway Osaka Pref. Hanwa Expressway Kobe-Awaji-Naru Expressway

4 Overview Fact Fact Sheet Sheet L area: km 2 [Sixth largest among all government-designated cities] Population: 1,530,912 Population Population Change Change *As Dec. 1, 2007 [Fifth largest among all government-designated cities] The population dropped by approx. 100,000 in 1995 following Great Hanshin Earthquake. The population recovered pre-quake level in November 2004, it has been growing consistently since. Economy Economy Growing Economy Increased capex Toward Creation Affluent Kobe Improved employment rate wages Strong consumer spending *Source: The Summary Regional Economy Finance, Bank Japan Kobe Branch, Ocber 2007 The The City s City s Image Image Cosmopolitan city full exotic atmosphere Port wn Fashionable city (person) 1,550,000 Great Hanshin Earthquake Population City 1,500,000 1,450,000 1,400, Forecast (Health, Labor, Welfare Ministry, December 2003)

5 2.Economic Fact Sheet Taking f from Kobe Airport 4

6 Size Economy Toward creation Affluent Kobe Real Real Gross Gross Product Product in in Kobe Kobe 6 trillion trillion billion billion yen yen (FY (FY 2006) 2006) The The city s city s economy economy is is called called 1% 1% Economy Economy as as it it accounts accounts for for 1% 1% GDP GDP Growth Growth for for 2 consecutive consecutive years years attained attained in in FY FY 06 06is is due due a substantial substantial growth growth in in manufacturing manufacturing industries industries such such as as transportation transportation equipment, equipment, etc. etc. Real Economic Growth Rate ( Kobe Nationwide) Kobe Nationwide

7 Industrial Structure Main Main industries Heavy Heavy industries industries such such as as shipbuilding, shipbuilding, steel, steel, etc. etc. machinery & appliances machinery & appliances Foods due location near sea, manufacturing Foods due location near sea, manufacturing industries industries such such as as rubber rubber goods goods Chemical Chemical shoes, shoes, western western confectionery, confectionery, apparel, apparel, pearls, pearls, brewing, brewing, etc. etc. Toward Creation Affluent Kobe Main Main business corporations Mitsubishi Mitsubishi Heavy Heavy Industries, Industries, Ltd., Ltd., Kawasaki Kawasaki Heavy Heavy Industries, Industries, Kobe Kobe Steel, Steel, Ltd. Ltd. Nestle Nestle Japan Japan Asics Asics P&G P&G RIKEN RIKEN Japan, Japan, Eli Eli Lilly Lilly Japan Japan K.K. K.K. Nippon Nippon Boehringer Boehringer Ingelheim Ingelheim Co., Co., Ltd. Ltd. Gross Production - Percentage Distribution by industry (Kobe & Nationwide) Service Industry producers non-governmental services producers government services Transportation forestry fisheries industry KOBE FY 2006 Real Estate mining manufacture construction Finance/Insurance electronic, gas, water system 1.7 retail/wholesale producers government services Service Industry Transportation 0.9 producers nongovernmental services Real Estate Nationwide FY 2006 forestry fisheries industry mining Finance/Insurance manufacture construction electronic, gas, water system retail/wholesale 2.6 6

8 Attracting Businesses Toward Creation Affluent Kobe Positive Ripple Ripple Effects Effects Due Due Opening Kobe Kobe Airport Airport Attracting Attracting Businesses Businesses An An increased increased number number companies companies came came Port Port Isl Isl II II because because close close proximity proximity airport airport The The number number companies companies increased increased from from (before (before airport airport opening) opening) 365 (after opening) 365 (after opening) Many Many more more companies companies joined joined Healthcare Healthcare Industry Industry City City Project Project The The number number increased increased from from companies companies (As Dec. 7, 2007) Or Or Positive PositiveEffects In In April April 2007, 2007, 3 3 universities universities opened opened in in Port Port Isl Isl I I (former (former container container berth berth portion): portion): Approximately Approximately 8,000 8,000 new new students students came came Port Port Isl Isl Hotel Hotel occupancy occupancy rate rate improved improved by: by: +6.1% +6.1% y/y y/y Average figures for period from April 2006 March 2007 The number visirs increased : The number visirs increased : million million ( ( 2 2 nd nd largest largest figure figure in in its its hisry) hisry) Fiscal 2006 ( 千人 ) Airport Airport Users Users Approx million passengers used airport in FY2006 alone The number passengers is continuing increase 1,000 passengers The number passengers H18 年度旅客数 H18 年度搭乗率 Number passengers FY2006 Capacity utilization rate FY % 76.4% 90% Number passengers H19 年度旅客数 FY2007 Capacity utilization rate FY2007 H19 年度搭乗率 80% [ H18 年 4 月 ~H19 年 3 月平均 ] 68.2% 66.4% 67.0% 63.5% 65.8% 65.6% 68.1% 61.9% 62.4% 65.2% 58.5% % 60.8% 58.9% 60.9% 55.4% % 52.7% % 4 月 5 月 6 月 7 月 8 月 9 月 10 月 11 月 12 月 1 月 2 月 3 月 Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar % 60% 50% 40% 30% 20% 10% 0% 7

9 3.Financial Condition Administrative Reform Urban District viewed from Ikariyama 8

10 FY2006 Results General Accounts Toward Creation Affluent Kobe Growing Growing city city revenue revenue helped helped city city steadily steadily improve improve self-financing self-financing ratio ratio Revenue: Revenue: City City revenue revenue increased increased due due reform reform economic economic recovery. recovery. Receipts Receipts local local allocation allocation declined declined sharply. sharply. Expenditure: Expenditure: Payroll Payroll public public assistance assistance slightly slightly increased. increased. Debt Debt expenditure expenditure significantly significantly reduced. reduced. Revenue in General Account Revenue in General Account Expenditure in General Account Expenditure in General Account 9, , , , , , , , , Total amount billion Total amount billion 56.1 Granted from government Granting local allocation Provision for asset revenue Money 繰入金 transferred Or revenue Or City Granted from Hy ogo Pref. Granting income Or Charge commissions Total amount billion Changes from City : + 12 billion City bonds: - 17 billion Granting local allocation : billion 9, , , , , , , , , Total amount billion Total amount billion Total amount billion Investm ent 76.0 Debt expenditure Public assistance H16 H H H16 H17 H18 Self-financing ratio 56.0% 56.7% 59.1% 53.4% 54.0% Or Payroll Compulsory expense ratio 55.4% *Breakdowns or billion Money drawn 89.3 billion Loan 65.4 billion Cost properties, etc billion Changes from Debt expenditure: billion Investment: billion 9

11 City Tax Revenue Toward Creation Affluent Kobe City City revenue revenue botmed botmed out out in in FY2006 FY2006 after after 8th 8th consecutive consecutive annual annual decline decline that that started started in in The The revenue revenue continued continued increase increase in in FY2006 FY2006 FY2007 FY2007 due due economic economic recovery recovery transfer transfer sources. sources. (Billions Yen) 3, , Government-designated cities average Due Due reform reform economic economic recovery, recovery, revenue revenue from from city city inhabitant inhabitant (individual (individual / / corporation) corporation) property property started started increase. increase. 2, , City Kobe City revenue breakdown FY2005 FY2006 Change City inhabitant (individual) City inhabitant (corporation) Property City planning Or Total *The ratio city revenue is shown in parenses ,007 (Fiscal year) (forecast) 10

12 Expenditure by Item Toward Creation Affluent Kobe Debt expenditure peaked out in FY2004, declining consistently since. Payroll has been restrained by headcount reduction. Investment is lowered no more than one fourth pre-quake level. (Billions yen) Investment FY1994 FY1995 FY1996 3, , , General account Expenditure Of which compulsory expense FY 2005 results FY 2006 results Change Payroll Public assistance Debt expenditure Total *General account (Billions yen) 1, , Public assistance Payroll Debt expenditure Investment 0 * Debt expenditure in FY2005 does not include redemption amount city bonds ( 300 billion) relating investment in / loan Recovery Fund (Forecast) (Fiscal year) 11

13 Outsting Balance City Bonds (All Accounts) Toward Creation Affluent Kobe The The outsting balance city city bonds bonds has has been been reduced by by approx. approx. 20% 20% compared that that in in FY2002 in in all all accounts. (Billions yen) 35,000 3,500 30,000 3,000 Business account Special account General account The balance outsting peaked out in FY2002, declining for 5 years in a row. 2, , , , , , , , , , , ,000 2,500 2, , ,000 2,000 1, , ,000 1,500 10,000 1,000 5, (Fiscal year) (Forecast) 12

14 Steady Progress in Administrative Fiscal Reforms Toward Creation Affluent Kobe The City has consistently promoted administrative fiscal reforms resre its financial status after earthquake. The City has consistently promoted administrative fiscal reforms resre its financial status after earthquake. We are now aggressively carrying out administrative fiscal reforms in accordance with Administrative Policy We are now aggressively carrying out administrative fiscal reforms in accordance with Administrative Policy (Target year: FY2010). (Target year: FY2010). Hisry Hisry our our administrative administrative fiscal fiscal reforms reforms Three-Year Urgent Plan for Three-Year Urgent Plan for Improve Its Financial Status Improve Its Financial Status (FY1996 (FY1996 FY1998) FY1998) Renewed Renewed Plan Plan for for Improving Improving Administration Administration Finance Finance (FY1999 (FY1999 FY2003) FY2003) Outcome administrative fiscal reforms Outcome administrative fiscal reforms (up FY2003) (up FY2003) Net loss for one fiscal year: Improved by 96 billion Net loss for one fiscal year: Improved by 96 billion Headcount: Reduced by 2,185 Headcount: Reduced by 2,185 Reorganization: Reduced 353 positions Reorganization: Reduced 353 positions Implementation Implementation Administrative Administrative Policy Policy (Target (Target year: year: FY2010) FY2010) Reducing outsting balance city bonds by 500 billion in real terms Reducing headcount by 3,000 Exploiting private secr (privatization /contracting out services private secr) Introducing system Licensed Managers (545 facilities) Reduced cost: approx billion ( ) Contracted out a half City s bus service private secr, transferring 5 bus routes Reduced cost: approx. 3 billion ( ) Management reforms universities Cityowned companies Reorganized operate Shin Chuo City Hospital, using PFI Reduced cost: approx. 4.8 billion ( ) Making University Foreign Studies an independent administrative agency (April 2007) Reviewing, suspending, abolishing businesses facilities 13

15 4. Funding A view from Kazamidori-no-yakata house 14

16 Schedule Issuing Offering Bonds Public Toward Creation Affluent Kobe Schedule Schedule Issuing Issuing Bonds Bonds in in FY2007 FY2007 Billions yen Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Total 5-yr bond yr bond yr bond yr bond Co-issuance bond Total *The above schedule may be changed from time time. *We plan issue bonds presumably underwritten by banks approximately 50 billion. The City will issue fer bonds 160 billion public in FY2007 In addition holding IR seminars for major shareholders, we will continue conduct proactive invesr relations activities including one-on-one meetings For reference: Issuer Rating The City obtained rating from Rating Investment Information, Inc. (R&I) in January 2007 as follows: Previous rating (op) AA- Present rating AA Outlook: Stable * Op ratings are determined chiefly on basis publicly available, disclosed information. * AA is defined as a very high degree capacity for payment issuance claims. It is also accompanied by excellent elements. 15

17 System Local Authority Bonds (LAB) in Japan Toward Creation Affluent Kobe Mechanism Principal & Interest Interest (P&I) (P&I) repayment assured Securing financial resources for repayment P&I Obtain local revenue based on right ation Budget expenditure for public bonds (for P&I repayment) as a part annual expenditure in budget proposals Obtain a level local allocation es enough match annual expenditure including expenditure for public bonds with revenue Include a part LAB P&I repayment fund in stard financial needs in calculation local allocation es Bond issuance permission system as a prompt corrective action Restriction issuance on local authorities with real debt expenditure ratio 18% Restriction issuance on local authorities with deficit The national government secures financial resources for repayment LAB P&I The system aims avoid problems in repayment LAB P&I by each local government authority Action take if real deficit exceeds a prescribed level=financial Reconstruction Financial reconstruction under state control Consultation with consent national government is required on it Annual budget must be adjusted in accordance with reconstruction plan Repayment is assured because national government will be involved in budget-making 16

18 Tax-Exemption for interest on transfer local authority bonds Toward Creation Affluent Kobe Outline Outline -exemption for for interest interest on on LAB LAB payable non-residents, etc. etc. The following revisions are applicable interest on transfer LAB payable after January 1, For interest on transfer LAB payable non-residents or foreign legal entities, income or corporate shall not be imposed if application -exemption application submitted for withholding exemption as in case transfer national bonds Preferential measures shall be prescribed for those already submitted application -exemption for interest on transfer national bonds y should aumatically obtain -exemption for interest on transfer LAB under certain conditions Transfer local authority Bonds A new system transfer LAB: By book-entry increase/reduction balance in ledger transfer account in transfer institution or account management institution (completely paperless), such bonds shall be treated as transfer LAB As for general bond transfer system, Japan Securities Deposiry Center shall be transfer institution system starts on January 10, 2006 As for new issuance transfer bonds transfer outsting bonds transfer bonds, consent issuers for transfer institutions are required. However, almost all prefectural governments, ordinancedesignated cities municipal governments, who issued bonds, have already given consent 17

19 If you have any inquiries on this presentation, please contact: Bond Finance Section, Finance Department, Administration Finance Bureau, The City Kobe Phone: (078) Kano-cho, Chuo-ku, A view from Kobe Airport 18