| Metric | Current Period | Prior Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥12731.4B | ¥11773.5B | +8.1% |
| Operating Income / Operating Profit | ¥987.4B | ¥847.0B | +16.6% |
| Ordinary Income | ¥940.5B | ¥834.1B | +12.8% |
| Net Income / Net Profit | ¥502.5B | ¥374.7B | +34.1% |
| ROE | 8.9% | 7.0% | - |
For the fiscal year ended March 2026, HASEKO CORPORATION reported Revenue of 1兆2,731B円 (YoY +957B円 +8.1%), Operating Income of ¥987B (YoY +¥140B +16.6%), Ordinary Income of ¥940B (YoY +¥106B +12.8%), and Net Income of ¥502B (YoY +¥127B +34.1%), delivering year-over-year increases in both top and bottom lines. Operating margin improved to 7.8% from 7.2% a year earlier (+0.6pt), and the gross margin on completed construction projects rose to 14.1% from 12.5% (+1.6pt), driven by price pass-through and improved project profitability. The Real Estate Related Business led growth with Revenue of ¥2,932B (+16.0%), while Construction Related also achieved Revenue of ¥9,008B (+7.0%) and Operating Income of ¥685B (+21.6%) with margin improvements. Conversely, Overseas Operations continued to post an operating loss of ¥60B, weighing on overall profitability. The substantial increase in Net Income (+34.1%) was aided by a reduction in impairment losses (¥40B ← prior year ¥168B), but results fell short of full-year guidance (Operating Income ¥1,100B, Net Income ¥760B), leaving gaps of ▲10.2% on Operating Income and ▲33.9% on Net Income.
[Revenue] Revenue was ¥1兆2,731B, an increase of +8.1% YoY. By segment, Real Estate Related Business recorded the largest growth at ¥2,932B (+16.0%), supported by handovers in condominium sales and rental properties. Construction Related Business increased to ¥9,008B (+7.0%), with completed construction value at ¥6,252B (+4.4%) holding steady. Management & Operation business grew to ¥1,654B (+8.8%) as the service base expanded, and Overseas Operations increased to ¥43B (+24.5%) though absolute scale remains small. The topline growth was driven by the twin engines of Real Estate and Construction.
[Profitability] Operating Income was ¥987B, up +16.6% YoY—outpacing revenue growth—with an operating margin of 7.8% (up 0.6pt from 7.2%). Gross profit margin rose to 14.9% (up 0.8pt from 14.1%), and completed construction gross margin improved to 14.1% (up 1.6pt from 12.5%), which were the primary drivers of profitability improvement. Construction Related operating income was ¥685B (+21.6%), Real Estate Related was ¥355B (+9.2%), and Management & Operation was ¥82B (+26.6%), with all major segments delivering higher profits. SG&A was ¥911B (+11.4% YoY), growing faster than revenue, raising the SG&A ratio to 7.2% from 6.9% (+0.3pt). Ordinary Income was ¥940B (+12.8%); below-the-line, equity-method losses widened to △¥20B and interest expense rose to ¥47B from ¥35B (+33.7%). Net Income increased substantially to ¥502B (+34.1%), driven by a reduction in extraordinary losses (¥47B ← prior year ¥229B). Impairment losses were ¥40B, down substantially from ¥168B the prior year; valuation losses on investment securities were ¥29B, roughly in line with the prior year. The effective tax rate fell to 38.6% from 43.2%, boosting Net Income. In conclusion, price pass-through and project profitability improvements drove revenue and profit increases, though continued losses in Overseas Operations and higher SG&A remain issues.
Construction Related Business: Revenue ¥9,008B (+7.0%), Operating Income ¥685B (+21.6%), Operating Margin 7.6%. Improvement in completed construction gross margin (14.1% ← 12.5%) drove profit growth, aided by price pass-through and construction efficiency gains. Real Estate Related Business: Revenue ¥2,932B (+16.0%), Operating Income ¥355B (+9.2%), Operating Margin 12.1%, the highest among segments. Progress in handovers of for-sale and rental properties and a favorable mix of high-margin projects enabled revenue and profit growth. Management & Operation Business: Revenue ¥1,654B (+8.8%), Operating Income ¥82B (+26.6%), Operating Margin 5.0%; expansion of management contracts and a shift to higher value-added services improved margins. Overseas Operations: Revenue ¥43B (+24.5%), Operating Loss ¥60B, Operating Margin △141.0%. The ongoing deficit, impairment charge booked this period (¥1B), and deterioration at equity-method investees pressured profitability. Between segments, high margins in Real Estate Related support overall company profitability, while Overseas Operations’ losses constrain company-level operating margin improvement.
[Profitability] ROE was 8.9%, improving 2.3pt from 6.6% year-over-year, mainly due to higher Net Income margin (3.9% ← 3.2%). Operating margin was 7.8%, up 0.6pt from 7.2%, aided by higher completed construction gross margin (14.1% ← 12.5%) and higher margins in Real Estate Related. ROA was 6.8%, up 0.7pt from 6.1%, and total asset turnover improved to 0.898x from 0.863x. [Cash Quality] Operating Cash Flow / Net Income was 2.87x, indicating very strong cash backing of earnings. OCF/EBITDA was 1.46x, showing good cash conversion efficiency. The accrual ratio was △7.2%, with working capital compression (increase in advanced received for construction in progress +¥184B, decrease in inventory for sale △¥579B) contributing to cash generation. [Investment Efficiency] Tangible fixed asset turnover was 8.92x, and inventory turnover was 4.35x, indicating high asset efficiency. [Financial Soundness] Equity Ratio was 39.7%, up 0.7pt from 39.0% a year earlier, and current ratio improved to 264.1% from 237.8%. Debt/EBITDA was 3.26x—somewhat elevated—but interest coverage was 20.8x, indicating sufficient interest-paying capacity. Cash/short-term borrowings was 18.66x, showing very low short-term liquidity risk.
Operating Cash Flow was ¥1,574B, a substantial improvement from ¥39B in the prior year, and Operating CF / Net Income was 2.87x, reflecting strong cash backing of earnings. Subtotal (before working capital changes) was ¥1,949B, up from ¥302B the prior year, with decreases in inventories of ¥542B (compression of inventory for sale) and receivables down ¥114B contributing to cash generation. Advanced received for construction in progress increased by ¥184B, as progress on orders led to an accumulation of prepayments which improved working capital. Corporate tax paid was △¥279B, up from △¥259B, and Operating CF rose reflecting higher pre-tax profits. Investing CF was △¥532B, with main outflows being acquisition of tangible and intangible fixed assets △¥211B and acquisition of investment securities △¥347B. Loan recoveries of ¥345B supported inflows, but net was an outflow. Financing CF was △¥533B; proceeds from long-term borrowings were ¥801B, offset by repayments △¥267B, bond redemptions △¥409B, dividend payments △¥247B, and share buybacks △¥200B. Free Cash Flow was ¥1,041B, maintaining sufficient cash generation to cover dividends, share buybacks, and interest-bearing debt repayments. Cash and deposits were ¥2,799B, up ¥523B from the beginning of the period, indicating solid liquidity.
Recurring income was primarily composed of Operating Income of ¥987B, mainly from completed construction and real estate sales. Non-operating income was ¥37B, 0.3% of Revenue, and included dividend income of ¥6B and foreign exchange gains of ¥9B. One-off items included Extraordinary Losses of ¥47B, comprising impairment losses of ¥40B (prior year ¥168B), fixed asset retirement losses of ¥2B, and investment securities valuation losses of ¥29B. Extraordinary losses contracted sharply from ¥229B in the prior year, contributing to Net Income growth, though impairment risk remains for overseas and real estate assets. The accrual ratio was △7.2%, with working capital compression (advanced received for construction in progress +¥184B, inventory for sale △¥579B) generating cash exceeding profits. Operating CF / Net Income was 2.87x and OCF/EBITDA was 1.46x, indicating very strong cash coverage of earnings. The gap between Ordinary Income and Net Income can be explained by the reduction in extraordinary losses and the decline in the effective tax rate (38.6% ← 43.2%), supporting an assessment of high earnings quality.
Full-year guidance was Revenue ¥1,3800B, Operating Income ¥1,100B, Ordinary Income ¥1,050B, Net Income ¥760B, and EPS ¥249.39, but actuals were Revenue ¥1兆2,731B (vs. guidance △7.8%), Operating Income ¥987B (△10.2%), Ordinary Income ¥940B (△10.4%), and Net Income ¥502B (△33.9%), missing guidance on all metrics. Key reasons for the shortfall appear to be continued losses in Overseas Operations (Operating Loss ¥60B), widening equity-method losses (△¥20B), higher interest expense (¥47B, not included in guidance assumptions), and the rise in SG&A (+11.4%). The build-up in advanced received for construction in progress (¥632B ← prior year ¥448B) provides a revenue base for the next fiscal year, but improving profitability in Overseas Operations and controlling SG&A are forthcoming challenges.
Annual dividend was ¥95 per share, with a Payout Ratio of 50.7%, a sustainable level. Total dividends amounted to ¥247B, and FCF coverage versus FCF ¥1,041B was 4.21x, indicating dividends are well covered by internal funds. Share buybacks totaled ¥200B (equivalent to approximately 7.0% on an average shares outstanding basis during the period), and combined with dividends raised the Total Return Ratio to approximately 81.6%. FCF-based Total Return Ratio was 42.9%, maintaining returns within cash flow capacity. The company-disclosed Payout Ratio was 67.4% (company disclosure), relatively high, but with cash and deposits of ¥2,799B and strong Operating CF, dividend continuity is highly likely. Over the medium term, it would be reasonable to retain room to adjust the Total Return Ratio as Debt/EBITDA declines, but in the near term dividend maintenance and modest increases are feasible.
Continued losses in Overseas Operations: Operating Loss ¥60B and margin △141.0%, representing a significant deficit. Widening equity-method losses (△¥20B) and impairment risk are pressuring profitability and constraining improvement in company-level ROE. Improving the profitability of overseas bases and recovery in investee performance are urgent priorities.
Interest-bearing debt and rising interest burden: Long-term borrowings stood at ¥3,350B, up ¥700B YoY (+26.4%), and Debt/EBITDA is 3.26x, a somewhat high level. Interest expense was ¥47B, up +33.7% from ¥35B the prior year, and in a rising rate environment increased interest payments could pressure Ordinary Income. With interest coverage at 20.8x, short-term concerns are limited, but progress on deleveraging is desirable.
Valuation volatility in investment securities: Investment securities were ¥1,463B, up ¥435B YoY (+42.4%), and valuation gains on translation were ¥106B recorded. Investment securities valuation loss this period was ¥29B, and market price volatility poses a heightened risk to the P&L. Volatility in unrealized gains/losses of cross-held or policy holdings could impact earnings and shareholders’ equity.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 7.8% | 5.5% (3.5%–7.2%) | +2.2pt |
| Net Margin | 3.9% | 3.5% (2.5%–4.4%) | +0.4pt |
The Company exceeds sector medians on both operating margin and net margin, maintaining a top-tier profitability position within the sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 8.1% | 9.8% (-2.1%–15.1%) | -1.8pt |
Revenue growth is slightly below the median but within the IQR range, indicating a sector-average growth pace.
※Source: Company compilation
The improving trend in completed construction gross margin (14.1% ← 12.5%) demonstrates the effectiveness of price pass-through and project profitability improvements, strengthening the profit base of the Construction Related Business. The build-up in advanced received for construction in progress (¥632B ← ¥448B) secures revenue resources for the next fiscal year, supporting sustainable topline growth. With Operating CF / Net Income of 2.87x and FCF of ¥1,041B, cash generation is very strong and supports sustainability of dividends and returns.
Continued losses in Overseas Operations (Operating Loss ¥60B) and guidance misses (Operating Income △10.2%, Net Income △33.9%) point to structural issues in profitability; improving margins and investee performance are medium-term priorities. The trend of SG&A growth (+11.4%) outpacing revenue growth (+8.1%) indicates weakening operating leverage and calls for strict cost control. Debt/EBITDA of 3.26x and rising interest expense (+33.7%) reflect increasing interest burden; progress on deleveraging is important from a financial soundness perspective.
This report is an AI-generated earnings analysis document produced by analyzing XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions should be made at your own responsibility and, as necessary, after consulting a professional advisor.