| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥6023.8B | ¥5786.0B | +4.1% |
| Operating Income / Operating Profit | ¥342.7B | ¥279.9B | +22.4% |
| Ordinary Income | ¥365.2B | ¥274.7B | +32.9% |
| Net Income / Net Profit | ¥240.3B | ¥178.8B | +34.4% |
| ROE | 8.3% | 6.6% | - |
For the fiscal year ended March 2026, consolidated results recorded Revenue of ¥6023.8B (YoY +¥237.8B, +4.1%), Operating Income of ¥342.7B (YoY +¥62.8B, +22.4%), Ordinary Income of ¥365.2B (YoY +¥90.5B, +32.9%), and Net Income attributable to owners of the parent of ¥232.8B (YoY +¥55.1B, +23.7%), achieving both revenue and profit growth. Operating margin improved to 5.7% (up +0.9pt from 4.8% a year earlier), and Net margin improved to 3.9% (up +0.8pt from 3.1%), reflecting higher profitability. Gross margin rose to 15.4% (up +0.7pt from 14.7%), while SG&A ratio was stable at 9.8% (prior year 9.8%), indicating cost control contributed to margin expansion. Growth in the ICT Solutions Business (Lantrovision sales +29.1%, Operating Income +91.1%) and higher profitability at regional subsidiaries (Shikoku Tsuken Operating margin 10.7%) drove consolidated performance.
[Revenue] Revenue was ¥6023.8B (YoY +4.1%), securing top-line growth. By business, the ICT Solutions Business expanded to ¥1738.3B (sales composition 28.9%), up from ¥1432.7B a year earlier (+21.3%), and became the primary growth driver. Lantrovision saw sales of ¥443.2B (+29.1%) and Operating Income of ¥27.0B (+91.1%), a significant expansion; TTK recorded sales of ¥453.6B (+19.6%) and Operating Income of ¥33.6B (+39.2%), both posting double-digit growth. Shikoku Tsuken surged to sales of ¥378.2B (+50.7%) and Operating Income of ¥40.3B (+32.7%), achieving the highest margin among segments at 10.7%. Meanwhile, flagship MIRAITONE delivered sales of ¥3077.5B (+0.9%), a modest increase, but Operating Income rose to ¥181.4B (+18.9%) as margins improved to 5.9% (up +0.9pt from 5.0%), driving profit growth. Seibu Construction recorded lower sales of ¥616.1B (-13.9%), but Operating Income improved to ¥15.5B (+17.5%), with margin up to 2.5% (from 1.8%, +0.7pt). The Telecommunications Infrastructure Business was solid at ¥2352.5B (+1.6%), while the Environmental & Social Innovation Business declined to ¥1933.0B (-5.1%).
[Profitability] Cost of sales ratio improved to 84.6% (down -0.7pt from 85.3%), resulting in Gross margin of 15.4% (up +0.7pt). This was driven by remediation of construction project profitability and rigorous cost control; provision for construction losses decreased to ¥14.7B (down -10.3% from ¥16.4B). SG&A increased to ¥587.4B (prior year ¥568.7B, +3.3%) but the SG&A ratio remained stable at 9.8%. Goodwill amortization recorded ¥23.1B (prior year ¥24.9B), and Operating Income totaled ¥342.7B (+22.4%). Non-operating items included foreign exchange gains of ¥15.0B (prior year recorded foreign exchange gain ¥4.5B — although prior period information contained contradictory notes about a foreign exchange loss of ¥4.5B, the current period recorded a foreign exchange gain of ¥15.0B) and dividend income received of ¥4.8B, contributing to Non-operating income of ¥33.8B (up +110.0% from ¥16.1B). Interest expense increased to ¥9.7B (prior year ¥6.6B), but interest coverage remained healthy at 35.2x (Operating Income ¥342.7B ÷ Interest expense ¥9.7B). Ordinary Income was ¥365.2B (+32.9%). After income taxes of ¥126.7B (effective tax rate 34.5%), Net Income attributable to owners of the parent was ¥232.8B (+23.7%). In conclusion, revenue and profit growth were achieved, with improved profitability driven by cost control and portfolio changes.
MIRAITONE is the core segment, contributing Operating Income of ¥181.4B (prior year ¥152.6B, +18.9%), representing 51.7% of consolidated profit. Sales were ¥3077.5B (+0.9%), with margin improving to 5.9% (up +0.9pt from 5.0%). Lantrovision delivered Operating Income of ¥27.0B (prior year ¥14.1B, +91.1%) and sales of ¥443.2B (+29.1%), with margin expanding to 6.1% (up +2.0pt from 4.1%), combining growth and profitability. TTK posted Operating Income of ¥33.6B (prior year ¥24.2B, +39.2%) and sales of ¥453.6B (+19.6%), with margin at 7.4% (up +1.0pt from 6.4%). Shikoku Tsuken recorded Operating Income of ¥40.3B (prior year ¥30.4B, +32.7%) and sales of ¥378.2B (+50.7%) with the highest segment profitability at 10.7%. SOLCOM had Operating Income of ¥14.3B (prior year ¥14.1B, +1.4%) and sales of ¥372.5B (+11.5%), with margin slightly down to 3.8% (from 4.2%, -0.4pt). MIRAITONE SYSTEMS was broadly flat with Operating Income ¥20.2B (prior year ¥20.3B, -0.5%) and sales ¥297.8B (-0.7%). Kokudo Kogyo (Kokusai Kogyo / International Aeronautical Survey — presented as 国際航業) posted Operating Income of ¥18.4B (prior year ¥15.4B, +19.7%) and sales ¥496.4B (+0.2%), improving margin to 3.7% (up +0.6pt from 3.1%). Seibu Construction achieved Operating Income of ¥15.5B (prior year ¥13.2B, +17.5%) on sales of ¥616.1B (-13.9%), improving margin to 2.5% (up +0.7pt from 1.8%).
[Profitability] Operating margin was 5.7% (up +0.9pt from 4.8%), and Net margin was 3.9% (up +0.8pt from 3.1%). ROE was 8.3% (up +1.6pt from 6.7%), supported by improved Net margin and Total Asset Turnover of 1.05x (prior year 1.08x). Gross margin was 15.4% (up +0.7pt from 14.7%), and SG&A ratio remained at 9.8%. [Cash Quality] Operating Cash Flow (OCF) was ¥240.8B, equal to Net Income ¥240.3B (1.00x), indicating healthy accruals, but OCF being ¥240.8B versus an OCF subtotal of ¥364.0B is somewhat concerning. Accounts receivable increased by ¥104.9B, and corporate tax payments of ¥121.3B pressured OCF. OCF/EBITDA ratio was 0.53x (OCF ¥240.8B ÷ EBITDA ¥454.1B = Operating Income ¥342.7B + Depreciation & Amortization ¥118.7B - goodwill amortization approx. ¥7.3B adjustment), which is low and indicates room to improve cash conversion efficiency. [Investment Efficiency] ROA was 4.2% (Ordinary Income ¥365.2B ÷ Average total assets for the period ¥555.6B). Total Asset Turnover was 1.05x (Revenue ¥6023.8B ÷ Average total assets), showing stable asset efficiency. Capital expenditures were ¥86.0B, 0.72x of depreciation ¥118.7B, indicating mainly maintenance/renewal investment and subdued growth investment. [Financial Soundness] Equity Ratio was 50.3% (up +1.7pt from 48.6%), and D/E ratio was 0.33x (interest-bearing debt ¥895.8B ÷ equity ¥2794.4B), maintaining a healthy level. Current ratio and quick ratio were both 196.9%, indicating adequate short-term liquidity. Interest coverage was 35.2x (Operating Income ¥342.7B ÷ Interest expense ¥9.7B). Cash and deposits of ¥598.5B versus short-term borrowings of ¥495.2B provide a liquidity buffer.
Operating Cash Flow was ¥240.8B (prior year ¥180.5B, +33.4%) and increased, but changes in working capital reduced the OCF subtotal of ¥364.0B (prior year ¥260.4B) by ¥123.2B. The main factors were an increase in accounts receivable of -¥104.9B (increase in completed construction accounts receivable) and corporate tax payments of -¥121.3B; accounts payable also decreased by -¥14.2B. Partially offsetting this, advances received for construction in progress increased by ¥40.8B. Investing Cash Flow was -¥112.0B (prior year -¥93.7B), driven by capital expenditures of -¥86.0B (prior year -¥56.9B) and intangible asset acquisitions of -¥24.6B. Financing Cash Flow was -¥67.3B (prior year -¥64.1B); funding included long-term borrowings +¥100.0B (same as prior year) and bond issuance +¥300.0B (same as prior year), while uses included dividend payments -¥71.8B (prior year -¥64.2B), share repurchases -¥30.0B (prior year -¥49.9B), long-term debt repayments -¥5.2B (prior year -¥6.4B), and lease liability repayments -¥28.9B (prior year -¥22.8B). Free Cash Flow was ¥128.8B (OCF ¥240.8B + Investing CF -¥112.0B), sufficiently covering total shareholder returns of ¥101.8B (dividends + share buybacks). Cash and cash equivalents increased to ¥570.8B (prior year ¥513.5B, +11.2%), improving liquidity.
Earnings quality is generally good. Non-operating income was ¥33.8B (0.6% of Revenue), of which foreign exchange gains ¥15.0B are a one-off factor; dividend income received ¥4.8B and interest income received ¥3.2B are considered recurring. Special items netted to +¥1.9B (Special gains ¥7.0B - Special losses ¥5.1B), a minor impact; main components include gain on sale of investment securities ¥3.4B, gain on sale of fixed assets ¥2.2B, impairment losses ¥1.4B, and loss on retirement of fixed assets ¥1.0B. OCF equals Net Income (1.00x) indicating soundness, but the OCF subtotal of ¥364.0B decreased by working capital movement of -¥123.2B to ¥240.8B, as increased completed contract receivables temporarily suppressed cash conversion. Comprehensive income of ¥287.7B exceeded Net Income ¥240.3B by ¥47.4B, mainly due to valuation differences on available-for-sale securities +¥36.8B and actuarial differences related to retirement benefits +¥14.4B, indicating valuation improvements contributed. Goodwill amortization ¥23.1B is a JGAAP-specific expense; on an EBITDA basis of ¥454.1B (Operating Income ¥342.7B + Depreciation & Amortization ¥118.7B - adjustment for goodwill amortization approx. ¥7.3B), underlying earning power is stable.
The full year guidance projects Revenue ¥6600.0B (YoY +9.6%), Operating Income ¥400.0B (YoY +16.7%), Ordinary Income ¥400.0B (YoY +9.5%), and Net Income attributable to owners of the parent ¥255.0B (YoY +9.5%). Operating margin is expected to improve to 6.1% (current period 5.7%, +0.4pt), targeting further profitability improvement. Full-year dividend is planned at ¥45 (current period actual 85, comprised of interim dividend ¥40 + year-end dividend ¥45). Forecast payout ratio is 15.5% versus projected EPS ¥290.79, which is conservative. Progress against current period results stands at: Revenue 91.3%, Operating Income 85.7%, Ordinary Income 91.3% — Operating Income progress is slightly lagging but full-year achievement is considered within reach. Continued growth in the ICT Solutions Business, expanded contribution from high-margin segments, and entrenched cost control are prerequisites for meeting guidance.
Annual dividend paid was interim ¥40 + year-end ¥45 for a total of ¥85 (prior year ¥35, +¥50, +142.9%). Payout ratio was 32.5% (total dividends ¥7.23B ÷ Net Income attributable to owners of the parent ¥22.28B; alternatively calculated as ¥85 ÷ EPS ¥261.74 = 32.5%), maintaining a prudent level. Share buybacks totaled ¥30.0B, and Total Return Ratio was 43.8% (dividends ¥71.8B + share buybacks ¥30.0B = ¥101.8B ÷ Net Income ¥232.8B). Free Cash Flow of ¥128.8B comfortably covered total returns of ¥101.8B, indicating high sustainability of returns. Next fiscal year dividend guidance is ¥45, implying a payout ratio of 15.5% versus forecast EPS ¥290.79; this may reflect only the year-end dividend excluding the interim dividend, so confirmation of full-year dividend policy is advisable. With cash and deposits ¥598.5B and OCF generation ¥240.8B, capacity for both dividends and buybacks remains ample.
Customer concentration risk: Sales to NTT East ¥900.6B, NTT West ¥549.8B, and NTT DOCOMO ¥344.2B mean the NTT Group accounts for approximately 29.5% of Revenue. Changes in major customer investment policies or pricing negotiations could materially affect revenue stability. By segment, MIRAITONE comprises 50.2% of Revenue and 51.7% of Operating Income, indicating high business concentration.
Working capital risk: Increased completed contract receivables reduced OCF by -¥104.9B, keeping OCF/EBITDA at a low 0.53x. Advances received for construction in progress were ¥107.6B (up +60.3% from ¥67.1B at prior fiscal year-end), but if delays in project progress and cash collection persist, working capital burden could expand and strain liquidity.
Debt redemption risk: Total interest-bearing debt stands at ¥895.8B (Short-term borrowings ¥495.2B, Long-term borrowings ¥400.6B, Bonds ¥300.0B). Short-term debt ratio is 55.3%, which is relatively high and increases sensitivity to refinancing risk. Although interest coverage is comfortable at 35.2x, rising interest rates could increase interest expense and pressure profitability.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.7% | 5.5% (3.5%–7.2%) | +0.1pt |
| Net Margin | 4.0% | 3.5% (2.5%–4.4%) | +0.5pt |
Profitability slightly exceeds the industry median, positioning the company in the mid-range for both Operating and Net margins.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 4.1% | 9.8% (-2.1%–15.1%) | -5.8pt |
Revenue growth lags the industry median by -5.8pt, placing the company in the lower tier for growth. While ICT Solutions is expanding, the modest increase at core MIRAITONE has constrained overall growth.
※ Source: Company compilation
Sustainability of margin improvement: Operating margin improved to 5.7% (from 4.8%, +0.9pt) and Net margin to 3.9% (from 3.1%, +0.8pt). Gross margin improvement to 15.4% (from 14.7%, +0.7pt) reflects disciplined cost control and larger contribution from high-margin segments (Shikoku Tsuken margin 10.7%, Lantrovision +2.0pt improvement), suggesting structural improvement. Guidance targets Operating margin of 6.1% next year (+0.4pt), so continuity of margin improvement will be closely watched.
Room to improve cash conversion efficiency: Although OCF ¥240.8B equals Net Income (1.00x) and quality is good, OCF/EBITDA is low at 0.53x due to a -¥104.9B drag from increased completed contract receivables. Advances received increased by ¥40.8B, but smoothing project progress and collections remains a challenge. Improving cash conversion (receivables collection, tighter working capital management) will affect shareholder return capacity and valuation.
Sustainability of shareholder returns: Payout ratio 32.5% and Total Return Ratio 43.8% are conservative, and FCF ¥128.8B sufficiently covers total returns ¥101.8B. With cash deposits ¥598.5B and OCF generation, continuation of dividends and buybacks is feasible. Next fiscal year dividend guidance ¥45 (payout ratio 15.5% vs forecast EPS ¥290.79) may exclude the interim dividend, so confirmation of full-year policy is needed, but return capacity appears adequate.
This report was automatically generated by AI analyzing XBRL earnings disclosure data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are compiled by the company using publicly disclosed financial statements as reference information. Investment decisions are your own responsibility; consult a professional advisor as appropriate.