| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1798.2B | ¥1851.1B | -2.9% |
| Operating Income | ¥56.2B | ¥34.6B | +62.5% |
| Ordinary Income | ¥58.7B | ¥30.3B | +94.1% |
| Net Income | ¥42.9B | ¥27.2B | +57.8% |
| ROE | 5.4% | 3.9% | - |
FY2026 results: Revenue ¥1,798.2B (YoY -¥52.9B -2.9%), Operating Income ¥56.2B (YoY +¥21.6B +62.5%), Ordinary Income ¥58.7B (YoY +¥28.4B +94.1%), Net Income attributable to owners of the parent ¥42.9B (YoY +¥15.7B +57.8%). A decline in revenue with increased profits: an improvement in Completed Contract Gross Profit Margin from 7.5% to 9.1% (+1.6pt) materially lifted company-wide profitability. Operating margin improved from 1.9% to 3.1% (+1.2pt) and Ordinary Income margin improved from 1.6% to 3.3% (+1.6pt), indicating a qualitative improvement in the earnings structure. Extraordinary gains totaled ¥29.0B, mainly from investment securities disposal gains of ¥28.6B, exceeding extraordinary losses of ¥12.9B (including impairment of ¥7.1B) and contributing to higher Net Income. Operating Cash Flow (OCF) was -¥138.9B and OCF/Net Income was -3.24x, indicating issues with cash conversion, but improved gross margins and the Architectural/Building segment returning to profitability strengthened the earnings base.
【Revenue】Revenue ¥1,798.2B was down ¥52.9B ( -2.9% ) YoY. By segment: Civil Engineering ¥911.6B (+2.4%) showed stable growth; Building Construction ¥840.8B (-7.7%) declined but profitability materially improved; Real Estate ¥52.4B (+9.9%) maintained high margin with double-digit growth; Ancillary Business ¥35.0B (+3.4%) was steady. By region: Domestic ¥1,754.6B, Asia ¥43.7B, with sales to East Japan Railway Company (JR East) ¥416.6B accounting for about 23% of Revenue. Detailed order/sales structure not disclosed, but a decline in Completed Contract Sales to ¥1,743.9B (prior ¥1,798.9B) drove the overall decrease. The Building decline appears to reflect project selection amid rising material costs, while Civil Engineering and Real Estate stable growth supported the company top line.
【Profitability】Operating Income ¥56.2B (+62.5%) was mainly driven by improvement in Completed Contract Gross Profit to ¥159.5B (Gross Margin 9.1%, prior 7.5%), with Completed Contract Gross Profit up ¥24.7B (+18.3%) from prior ¥134.8B. SG&A was controlled at ¥118.6B (prior ¥114.0B, +4.0%), so gross profit expansion flowed through to operating profit. By segment, Civil Engineering operating income ¥35.8B (+2.5%) was largest; Building operating income ¥10.3B (+203.3%) recovered from prior ¥3.4B to contribute significantly; Real Estate ¥7.1B (+9.0%) secured a high margin of 13.5%; Ancillary ¥1.4B (+1.4%) was stable. Non-operating income included Dividend Income ¥9.2B and Interest Income ¥1.0B, while Interest Expense increased to ¥12.0B (prior ¥7.5B, +60.0%), raising financing costs. Ordinary Income ¥58.7B (+94.1%) roughly doubled from prior ¥30.3B due to the sharp operating improvement and higher dividend income. Net extraordinary items were +¥16.1B (investment securities disposal gains ¥28.6B, impairments ¥7.1B, etc.), lifting Pre-tax Income to ¥74.8B, and after taxes ¥24.3B, Net Income landed at ¥42.9B. In conclusion, despite lower Revenue, improvements in Completed Contract Gross Profit and the Building segment turning profitable led to higher profits.
Civil Engineering: Revenue ¥911.6B (+2.4%), Operating Income ¥35.8B (+2.5%), Operating Margin 3.9%. Maintained near prior profitability and functioned as a stable segment. Building Construction: Revenue ¥840.8B (-7.7%), Operating Income ¥10.3B (+203.3%), Operating Margin 1.2%. Despite revenue decline, profit improved substantially from ¥3.4B to turn profitable; this reflects project selection and cost control. Real Estate: Revenue ¥52.4B (+9.9%), Operating Income ¥7.06B (+9.0%), Operating Margin 13.5%. High-margin contribution with double-digit growth bolstering earnings quality. Ancillary Business: Revenue ¥35.0B (+3.4%), Operating Income ¥1.4B (+1.4%), Operating Margin 4.1%. Steady performance from construction-related supply of materials/equipment. Other: Revenue ¥2.0B (-20.1%), Operating Income ¥1.9B (-2.6%), small scale (insurance agency, etc.) and limited overall impact. High profitability in Civil Engineering and Real Estate supported earnings, and Building returning to profit was the main driver of increased overall profit.
【Profitability】Operating Margin 3.1% (prior 1.9%, +1.2pt), Ordinary Income Margin 3.3% (prior 1.6%, +1.6pt), Net Margin 2.4% (prior 1.5%, +0.9pt) — all improved. Completed Contract Gross Margin 9.1% (prior 7.5%, +1.6pt) was the main improvement driver. SG&A Ratio 6.6% (prior 6.2%, +0.4pt) rose slightly but was contained amid Revenue decline. ROE 5.4% (prior 4.8%) improved on higher profits but remains low. ROA (Ordinary Income) 2.4% (prior 1.4%) improved but is low versus industry peers.
【Cash Quality】OCF/Net Income is -3.24x (OCF -¥138.9B / Net Income ¥42.9B), indicating poor cash conversion with working capital increases absorbing cash. Accrual Ratio 7.4% ((Net Income - OCF)/Total Assets) is somewhat high, with receivables and inventory buildup degrading cash quality.
【Investment Efficiency】Estimated ROIC ~2.9% (EBIT ¥56.2B / (Equity ¥787.5B + Interest-bearing Debt ¥756.8B - Cash ¥247.7B)) is low and below likely cost of capital. Heavy exposure to investment securities ¥267.0B, and Dividend Income ¥9.2B supports ROA.
【Financial Soundness】Equity Ratio 30.8% (prior 31.1%, -0.3pt) is prudent but D/E 2.25x (Interest-bearing Debt ¥756.8B / Equity ¥336.1B) indicates elevated leverage. Interest-bearing Debt comprises Short-term Borrowings ¥533.5B and Long-term Borrowings ¥223.3B totaling ¥756.8B, with Short-term Debt ratio 70.5% indicating maturity concentration. Cash ¥247.7B / Short-term Debt ¥1,413.2B = 17.5% coverage, limited. Debt/EBITDA 11.3x (Interest-bearing Debt ¥756.8B / EBITDA ¥66.9B) reflects weak repayment capacity. Current Ratio 121.8% (Current Assets ¥1,721.1B / Current Liabilities ¥1,413.2B) is above 1.0x, but Completed Contract Receivables ¥1,129.8B comprise the majority of assets, raising concerns over effective liquidity.
OCF was -¥138.9B, an improvement from -¥202.9B prior but still negative. OCF subtotal (before working capital changes) was -¥113.7B; working capital deterioration included Inventory increase -¥63.1B (increase in real estate for sale, etc.), Accounts Receivable increase -¥66.6B (completed contract receivables buildup), and Accounts Payable decrease -¥74.3B, leading to negative cash after tax payments -¥21.9B. Interest and dividend received totaled ¥10.1B, interest paid -¥11.9B, indicating heavy interest burden. Investing Cash Flow was +¥38.2B, driven mainly by proceeds from sale of investment securities ¥37.0B. Capital Expenditure was -¥5.0B and CapEx/Depreciation ratio 0.47x (Depreciation ¥10.7B), suggesting maintenance-level investment only. Financing Cash Flow was +¥180.1B, with long-term borrowings executed ¥146.97B and net increase in short-term borrowings ¥115.01B raising funds, while long-term borrowings repayment -¥64.5B and dividend payments -¥17.1B were made. FCF (OCF + Investing CF) was -¥100.6B; dividend payments -¥17.1B were not covered by FCF and required external financing. Cash increased by +¥82.4B, highlighting funding via borrowings. Normalizing working capital and accelerating collection of completed contract receivables are top priorities.
Ordinary Income ¥58.7B vs Net Income ¥42.9B reflects net extraordinary items +¥16.1B (investment securities disposal gains ¥28.6B - impairments ¥7.1B - other ¥4.4B) and tax effects as the main divergence. Investment securities disposal gains are non-recurring and may reverse next fiscal year, so Net Income sustainability requires caution. Non-operating income ¥16.7B is mainly Dividend Income ¥9.2B (0.5% of Revenue), a recurring but limited source. Non-operating expenses ¥14.2B show a notable increase in Interest Expense ¥12.0B (prior ¥7.5B, +60.0%), reflecting rising rates and increased borrowings. Given negative OCF, accrual (accounting profits vs cash generation) is substantially positive, lowering earnings quality. OCF/Net Income -3.24x and OCF/EBITDA -2.08x indicate weak cash conversion attributable to working capital stagnation (Completed Contract Receivables ¥1,129.8B, Inventory ¥0.1B but substantial real estate for sale recorded at ¥6,196M). While Ordinary Income-level non-operating effects are limited, Net Income relied on extraordinary gains, and cash generation remains weak.
Guidance for FY2027: Revenue ¥1,850.0B (vs current +¥51.8B +2.9%), Operating Income ¥66.0B (vs current +¥9.8B +17.4%), Ordinary Income ¥57.0B (vs current -¥1.7B -3.0%), Net Income attributable to owners of the parent ¥59.0B (vs current +¥16.1B +37.5%), EPS ¥452.23, DPS ¥223.0. Comparing current results to guidance: Ordinary Income actual ¥58.7B exceeded forecast ¥57.0B (achievement 103%), while Net Income actual ¥42.9B was below forecast ¥59.0B (parent attributable), likely due to volatility in extraordinary items. Next year’s guidance projects higher Revenue and Operating Income, but a modest decline in Ordinary Income (-3.0%), reflecting conservative assumptions for higher interest burden and the potential loss of this year's investment securities disposal gains ¥28.6B. Net Income is projected to rise +37.5% assuming normalization of extraordinary items, but realization depends on maintaining Completed Contract Gross Margin and improving working capital to generate OCF. DPS ¥223 implies a Payout Ratio of 49.3% (based on forecast EPS ¥452.23), indicating shareholder return policy is maintained, but securing dividend funding amid negative FCF remains a challenge.
A year-end dividend of ¥170 was paid, with a Payout Ratio of 50.3% (Total Dividends ¥1,705M / Net Income attributable to owners ¥3,388M; note payout ratio calculation may include interim dividend and is around 50%). FCF was -¥100.6B, and dividend payments -¥17.1B were not covered by internal funds, relying on borrowings to secure dividend funding. Dividend Coverage (FCF/Dividends) is -5.88x, indicating strong dependence on external financing to maintain dividends. Next fiscal year guidance DPS ¥223 implies a Payout Ratio 49.3%, maintaining comparable shareholder return, conditional upon FCF improvement. No share buyback disclosure; Total Return Ratio is considered equivalent to the dividend payout. Under high leverage (Interest-bearing Debt ¥756.8B, Debt/EBITDA 11.3x), room for additional shareholder returns is limited. Ensuring dividend sustainability requires OCF turning positive and working capital reduction; increasing cash balance ¥247.7B appears intended to secure near-term dividend capacity.
Working Capital Management Risk: Completed Contract Receivables ¥1,129.8B represent 62.8% of Revenue, and extended collection cycles strain liquidity. OCF -¥138.9B indicates poor cash conversion, and working capital increases are constraining growth. Project progress/payment delays or customer credit deterioration could rapidly worsen liquidity.
Interest Rate & Refinancing Risk: Of Interest-bearing Debt ¥756.8B, Short-term Borrowings ¥533.5B (70.5%) create maturity concentration and reliance on short-term rollovers. Interest Expense increased to ¥12.0B and average interest rate is around 1.6% and rising. Continued rate increases would raise interest burden and reduce Interest Coverage (EBITDA / Interest Paid = 5.6x), raising concerns. Difficulty refinancing short-term debt could precipitate a liquidity crisis.
Large Customer Concentration Risk: Sales to East Japan Railway Company (JR East) ¥416.6B account for 23.2% of total, indicating high customer concentration. If this customer's capex plans are curtailed or projects canceled/delayed, revenue decline and related receivables recovery risk could jointly and materially impact earnings and cash flows.
収益性・リターン
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 3.1% | 5.5% (3.5%–7.2%) | -2.4pt |
| Net Margin | 2.4% | 3.5% (2.5%–4.4%) | -1.1pt |
Profitability is below industry median; while Completed Contract Gross Margin improved, absolute levels remain low versus peers.
成長性・資本効率
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | -2.9% | 9.8% (-2.1%–15.1%) | -12.8pt |
Growth rate is significantly below industry median; revenue contraction lags peers. Company aims to recover via next year’s revenue increase plan.
※Source: Company compilation
Improvement to Completed Contract Gross Margin 9.1% (prior 7.5%, +1.6pt) and the Building segment returning to profit indicate a qualitative shift in earnings structure. Stable profitability in Civil Engineering and high margin in Real Estate (13.5%) provided a cushion, enabling Operating Margin improvement to 3.1%. Next year’s projected Operating Income +17.4% assumes continuation of this margin improvement. Investors should monitor Completed Contract Gross Margin, Building cost control trends, and progress on large customer (JR East) projects.
OCF -¥138.9B and FCF -¥100.6B show insufficient cash conversion, and dividends ¥1,710M were funded by external financing (Net Financing +¥180.1B). Interest-bearing Debt ¥756.8B, Short-term ratio 70.5%, Debt/EBITDA 11.3x imply high leverage and liquidity risk. Achieving next year’s profit plan requires OCF turning positive; accelerating collection of Completed Contract Receivables and normalizing working capital are key. The loss of this year’s extraordinary gain (investment securities disposal gains ¥28.6B) would make next year’s Net Income more reflective of operating performance, so the degree of cash generation improvement will be central to evaluating dividend sustainability and financial health.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are the Company’s compilation based on public financial statements. Investment decisions are your responsibility; consult advisors as necessary.