| Metric | Current Period | Same Period Last Year | YoY |
|---|---|---|---|
| Revenue | ¥278.4B | ¥183.9B | +51.4% |
| Operating Income | ¥39.5B | ¥11.3B | +249.1% |
| Ordinary Income | ¥39.9B | ¥11.6B | +244.3% |
| Net Income | ¥27.4B | ¥7.4B | +267.9% |
| ROE | 17.8% | 5.6% | - |
Cumulative results for FY2026 Q3 were Revenue of ¥278.4B (YoY +¥94.5B +51.4%), Operating Income of ¥39.5B (YoY +¥28.2B +249.1%), Ordinary Income of ¥39.9B (YoY +¥28.3B +244.3%), and Net Income of ¥27.4B (YoY +¥20.0B +267.9%), achieving significant increases in both revenue and profit. Expansion of order intake and construction progress alongside improved profitability lifted the operating margin to 14.2%. Total Assets reached ¥270.0B (up ¥27.3B from ¥242.7B a year earlier), and Net Assets were ¥153.9B (up ¥20.6B), strengthening the financial base.
[Profitability] ROE 17.8% (significant improvement YoY), Operating Margin 14.2% (up +8.1pt from 6.1% a year earlier), Net Margin 9.8% (up +5.8pt from 4.0% a year earlier). Gross Profit on Completed Construction secured at ¥63.5B, underpinning a solid earnings base. [Cash Quality] Cash and Deposits ¥37.1B, cash coverage of short-term debt 2.65x. Interest coverage 1,977x, indicating a very light interest burden. [Investment Efficiency] Total Asset Turnover 1.031x, ROA (Return on Assets) 10.1%, indicating solid asset efficiency. [Financial Soundness] Equity Ratio 57.0%, Current Ratio 210.5%, indicating ample liquidity. Interest-bearing Debt ¥14.0B, Debt/Capital Ratio 8.3%, maintaining a conservative capital structure. However, with a Short-term Debt Ratio of 100.0%, dependence on short-term funding is high, warranting attention to refinancing risk.
Cash and Deposits increased by +¥2.5B from ¥34.6B a year earlier to ¥37.1B, with profit growth and accumulation of internal reserves strengthening the funding base. Retained Earnings increased from ¥112.4B to ¥132.2B (+¥19.7B, +17.6%), reflecting steady internal retention of net income. In working capital efficiency, Accounts Receivable from Completed Construction rose to ¥99.9B, up +¥22.9B from ¥77.0B a year earlier, reflecting receivables growth accompanying higher sales, while Costs on Uncompleted Construction Contracts also increased to ¥10.0B, up +¥2.8B from ¥7.2B a year earlier, reflecting the buildup of construction projects. Advances Received of ¥13.5B (up +¥1.7B from ¥11.8B a year earlier) indicate that customer advances support working capital. Against short-term borrowings of ¥14.0B, on-hand liquidity with Cash and Deposits of ¥37.1B is sufficient, and the Current Ratio of 210.5% and Quick Ratio of 210.5% confirm adequate short-term payment capacity.
With Ordinary Income of ¥39.9B versus Operating Income of ¥39.5B, the net increase from non-operating items is a modest approx. ¥0.4B. Non-operating income was ¥0.6B from interest and dividend income and foreign exchange gains, etc., while non-operating expenses were ¥0.2B including interest expense of ¥0.02B, indicating a limited impact from non-operating factors. Against Gross Profit on Completed Construction of ¥63.5B, Selling, General and Administrative Expenses were ¥23.9B, and Operating Income of ¥39.5B is supported by the profitability of core operations. Interest coverage of 1,977x indicates an extremely light interest burden, allowing most operating profit to remain without being eroded by financing costs. A Provision for Bonuses of ¥5.6B was recorded to address seasonality in personnel expenses. The Operating Margin of 14.2% against Revenue, a substantial improvement from 6.1% a year earlier, suggests improved profitability of orders and/or relative containment of fixed costs.
Short-term refinancing risk: A Short-term Debt Ratio of 100.0% indicates high dependence on short-term funding, and a deterioration in the funding environment could strain liquidity. While Cash and Deposits of ¥37.1B provide 2.65x coverage of short-term borrowings of ¥14.0B, confirming the rollover plan for short-term liabilities and the company’s funding capacity is important. Variability in order intake and construction progress: The scale and schedule delays of construction projects directly affect revenue and profit, and concentration in large projects could amplify earnings volatility. It is necessary to ascertain whether the 51.4% YoY growth in revenue is due to a temporary contribution from large projects or a sustained expansion in orders. Decline in intangible assets: Intangible assets decreased from ¥4.0B a year earlier to ¥2.9B, down -28.9%, suggesting accelerated amortization or changes in business composition. Confirmation of future amortization burden and impairment risk is warranted.
[Industry Position] (Reference information; our research) Profitability: Net Margin of 9.8% exceeds the industry median of 4.7% by +5.1pt, and Operating Margin of 14.2% also exceeds the industry median of 4.5% by +9.7pt. ROE 17.8% significantly exceeds the industry median of 10.4%, placing profitability in the upper tier of the industry. Growth: Revenue growth rate of 51.4% exceeds the industry median of 8.3% by +43.1pt, achieving substantial growth. Efficiency: ROA 10.1% exceeds the industry median of 5.7% by +4.4pt, indicating superior asset efficiency within the industry. Soundness: Equity Ratio of 57.0% is slightly above the industry median of 52.3%, and the Current Ratio of 210.5% (2.11x) is close to the industry median of 2.25x, putting financial soundness at around industry average to slightly above. The Net Debt/EBITDA multiple is negative (net cash), maintaining a favorable financial structure even compared to the industry median of -0.27. Overall, the company ranks in the upper tier of the industry in profitability, growth, and efficiency, while maintaining above-standard financial soundness. Industry: Construction (N=6 companies), Comparison: FY2025 Q3, Source: Our compilation
Significant increases in revenue and profit with high profitability: Revenue +51.4% and Operating Income +249.1% reflect remarkable growth, and the Operating Margin of 14.2% has doubled from 6.1% a year earlier. Order expansion and margin improvement are progressing simultaneously, with Gross Profit on Completed Construction of ¥63.5B underpinning the earnings base. Profitability is among the top in the industry, and the continuity of order backlog and construction progress, as well as the trend in project-level profitability, will be key points to watch. Balance between financial soundness and short-term funding management: With an Equity Ratio of 57.0% and Current Ratio of 210.5%, soundness is favorable; however, a Short-term Debt Ratio of 100.0% indicates high dependence on short-term funding. While on-hand liquidity is sufficient with Cash and Deposits of ¥37.1B against Interest-bearing Debt of ¥14.0B, confirming repayment/rollover plans for short-term borrowings and funding capacity is important. Dividend sustainability and shareholder returns: The full-year dividend forecast of ¥50 implies a calculated Payout Ratio of approximately 21.9%, a conservative level, and dividends appear sustainable given Net Income of ¥27.4B and Retained Earnings of ¥132.2B. Going forward, it will be important to confirm Operating Cash Flow (OCF) generation capacity and assess dividend capacity on an FCF basis in light of capital expenditures and working capital needs.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings release data. It does not constitute a recommendation to invest in any specific security. The industry benchmark is reference information compiled by us based on publicly available financial results data. Investment decisions are your own responsibility; please consult a professional as needed before making any investment decisions.