| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥4877.0B | ¥4985.8B | -2.2% |
| Operating Income | ¥270.9B | ¥143.0B | +89.5% |
| Ordinary Income | ¥270.5B | ¥144.1B | +87.7% |
| Net Income | ¥181.4B | ¥62.3B | +191.1% |
| ROE | 9.7% | 3.4% | - |
For the fiscal year ended March 2026, Kumagai Gumi Co., Ltd. reported Revenue of ¥4,876.98B (YoY -108.83B -2.2%)—a slight decline—but achieved Operating Income of ¥270.92B (YoY +127.92B +89.5%), Ordinary Income of ¥270.49B (YoY +126.38B +87.7%), and Net Income of ¥200.68B (YoY +140.48B +191.1%)—a substantial increase in profit. The revenue decrease with profit increase structure was mainly driven by an improvement in the gross profit margin on completed contracts from 7.7% a year earlier to 10.9% (+3.2pt), which absorbed an increase in SG&A to ¥261.47B (SG&A ratio 5.4%, prior year 4.8%), expanding the operating margin to 5.6% (prior year 2.9%) (+2.7pt). At the ordinary level, non-operating income and expenses were roughly balanced. Pre-tax profit of ¥299.34B was supported by ¥42.79B in extraordinary gains, mainly ¥42.09B from gains on sales of investment securities, boosting final profit and improving the net profit margin to 4.1% (prior year 1.2%) (+2.9pt). ROE improved to 9.7% (prior year 3.4%) (+6.3pt), indicating a marked recovery in capital efficiency.
[Revenue] Completed contract revenue was ¥4,876.98B (YoY -2.2%), a slight decline. By segment: Building Construction Business ¥2,571.06B (YoY -3.8%), Civil Engineering Business ¥1,159.78B (YoY +10.3%), Subsidiaries ¥1,263.43B (YoY -7.0%). Building was the core but declined, while civil engineering saw double-digit growth—a contrasting movement. Order selection and a shift to higher-margin projects were behind the revenue reduction; the +3.2pt improvement in the completed contract gross profit margin to 10.9% (prior year 7.7%) indicates a strategy prioritizing quality over quantity.
[Profitability] Gross profit on completed contracts was ¥532.39B (prior year ¥383.15B); the substantial improvement to a 10.9% margin led Operating Income to surge to ¥270.92B (prior year ¥143.0B, +89.5%). The Building Construction Business drove the improvement with Operating Income of ¥141.60B (prior year ¥8.46B, +1,573.8%), supported by the peak-out of material cost inflation and progress in price pass-through. Despite revenue growth, Civil Engineering Business Operating Income was ¥60.53B (prior year ¥69.40B, -12.8%), reflecting a less favorable project mix. Subsidiaries posted Operating Income of ¥70.86B (prior year ¥64.80B, +9.4%) and remained solid. Non-operating income was ¥20.88B (including dividend income ¥10.60B and foreign exchange gains ¥1.85B) and non-operating expenses were ¥21.30B (interest expense ¥10.0B, others ¥2.84B), roughly balanced, resulting in Ordinary Income of ¥270.49B (prior year ¥144.11B, +87.7%). Extraordinary gains of ¥42.79B (mainly gains on sales of investment securities ¥42.09B) less extraordinary losses ¥13.94B (impairment losses ¥7.35B, loss on retirement of fixed assets ¥0.71B) produced Pre-tax Profit of ¥299.34B (prior year ¥137.99B, +117.0%). After corporate taxes of ¥98.68B (effective tax rate 33.0%), Net Income was ¥200.68B (prior year ¥93.54B, +114.5%). In conclusion, despite lower revenue, the combination of improved gross margins and contribution from extraordinary gains produced a structure of sharp profit increase (technically a large profit increase on reduced revenue).
Civil Engineering Business: Revenue ¥1,159.78B (YoY +10.3%), Operating Income ¥60.53B (YoY -12.8%), with a margin declining to 5.2% (prior year 6.6%). The profit decline despite revenue growth reflects a shift in project mix and an increase in lower-margin projects. Building Construction Business: Revenue ¥2,571.06B (YoY -3.8%), Operating Income ¥141.60B (YoY +1,573.8%), margin sharply rose to 5.5% (prior year 0.3%). Last year’s near-zero operating margin due to poor profitability normalized this year as material cost pressures eased and price pass-through progressed. Subsidiaries: Revenue ¥1,263.43B (YoY -7.0%), Operating Income ¥70.86B (YoY +9.4%), margin improved to 5.6% (prior year 4.8%); they maintained a profit-enhancing structure in providing construction-related materials and technical products. The Building Construction Business accounted for 52.2% of consolidated operating income, acting as the primary profit driver, while recovery in Civil Engineering profitability will be key to stabilizing earnings next term.
[Profitability] Operating margin 5.6% (prior year 2.9%), Net margin 4.1% (prior year 1.9%)—both significantly improved. The +3.2pt improvement in completed contract gross profit margin to 10.9% (prior year 7.7%) is the main driver, reflecting price pass-through and better cost control. ROE reached 9.7% (prior year 3.4%, no 3-year average data available), composed of Net margin 4.1% × Total Asset Turnover 1.09x × Financial Leverage 2.39x. [Cash Quality] Operating Cash Flow (OCF) ¥250.16B is 1.25x Net Income ¥200.68B, indicating high quality. OCF/EBITDA is 0.86x (EBITDA ¥292.28B = Operating Income ¥270.92B + Depreciation ¥21.36B), slightly below the 0.9x benchmark; this suggests the impact of working capital changes (advance receipts -¥46.43B, accounts payable -¥376.0B). Free Cash Flow ¥185.58B (OCF ¥250.16B - Investing CF ¥64.58B) covers dividends ¥90.74B and share buybacks ¥35.14B, preserving return capacity. [Investment Efficiency] Total asset turnover 1.09x; capital expenditures ¥46.83B are 2.19x depreciation ¥21.36B, indicating proactive renewal/efficiency investment. Provision for construction losses ¥8.75B (prior year ¥23.67B, -63.0%) fell substantially, indicating a reduction in unprofitable projects. [Financial Soundness] Equity Ratio 41.8% (prior year 39.3%), current ratio 162.7% (current assets ¥3,379.19B / current liabilities ¥2,077.40B) — favorable. Interest-bearing debt ¥414.33B (short-term borrowings ¥115.75B + long-term borrowings ¥296.58B + corporate bonds ¥85.0B - overlap adjustments), Debt/EBITDA 1.42x, Interest Coverage 27.15x (OCF ¥250.16B / interest paid ¥9.31B, on a base 29.29x) — solid. Cash and deposits ¥646.79B are 5.59x short-term interest-bearing debt ¥115.75B, limiting liquidity risk.
OCF was ¥250.16B (prior year ¥82.33B, +203.9%), a large increase; conversion against Pre-tax Profit ¥299.34B is 83.6%, favorable. Breakdown: operating cash flow subtotal ¥275.88B less corporate tax payments ¥30.13B produced net ¥245.75B; in working capital, an increase in trade receivables +¥244.53B (improved collections) contributed, while decreases in accounts payable -¥376.0B and advance receipts -¥46.43B were negatives—reflecting timing of contract payments. Investing CF was -¥64.58B (prior year -¥119.90B): capital expenditures -¥46.83B and purchases of investment securities -¥24.06B were partially offset by proceeds from sales including sale proceeds with gains ¥7.61B and proceeds from sale of subsidiary shares ¥69.03B. Financing CF was -¥52.68B (prior year -¥164.66B): borrowings from long-term debt +¥39.57B against repayments -¥14.59B, dividends -¥90.62B, and share buybacks -¥35.16B. Free Cash Flow ¥185.58B covers dividends + share buybacks ¥125.78B by 1.48x, preserving return capacity. Cash and cash equivalents at period-end ¥646.79B (prior year ¥501.56B, +¥145.23B) expanded due to increased OCF and recoveries from investing activities; liquidity against short-term debt is ample at 5.59x. OCF/EBITDA 0.86x is slightly below benchmark, but smoothing working capital changes could improve it; overall cash backing of profits is good and funding risk is low.
Of Net Income ¥200.68B, Operating Income ¥270.92B reflects recurring business earnings and is high quality, but Extraordinary Gains ¥42.79B (mainly gains on sale of investment securities ¥42.09B) temporarily boosted final profit by +21.3%. Comprehensive Income ¥188.29B (Net Income ¥181.36B) was below Net Income due to valuation losses on securities -¥28.87B, representing unrealized losses on held securities. Non-operating income ¥20.88B is mainly dividend income ¥10.60B and is of a recurring nature, though foreign exchange gains ¥1.85B are variable. OCF ¥250.16B is 1.25x Net Income ¥200.68B and represents 83.6% of Pre-tax Profit ¥299.34B, indicating limited accrual (non-cash) accumulation and good earnings quality. However, the reduction in provision for construction losses from ¥23.67B to ¥8.75B (-63.0%) may have partially boosted this year’s profit, so attention is needed for potential new provisions next fiscal year. Completed contract receivables ¥2,405.70B (prior year ¥2,644.50B) equal about half a year’s revenue, and variability in collection timing can impact OCF. Overall, core operating profit is high quality and recurring; even excluding extraordinary gains, the uptrend in earnings is likely to persist, though movements in provisions and receivables collection will be key monitoring points.
Full Year guidance projected Operating Income ¥309.0B (YoY +14.1%), Ordinary Income ¥310.0B (YoY +14.6%), Net Income ¥199.0B (YoY +9.7%). Actuals were Operating Income ¥270.92B (achievement 87.7%), Ordinary Income ¥270.49B (87.3%), Net Income ¥200.68B (100.8%)—approximately -12% shortfall at the operating and ordinary stages, but Net Income finished roughly flat. The shortfall mainly stemmed from a miss at the operating level, likely impacted by lower Civil Engineering profitability by segment. However, Extraordinary Gains ¥42.79B (not included in forecast) supported final profit, allowing Net Income to slightly exceed forecast. EPS forecast ¥120.06 vs actual ¥116.94 (achievement 97.4%). Dividend forecast ¥25 was maintained; after considering the stock split, year-end was ¥27 (effectively ¥108 pre-split), combined with interim ¥80 to keep the plan. The guidance achievement suggests the full-year targets were set somewhat conservatively for operating and ordinary stages; next year, assuming the loss of extraordinary gains, building core profit growth will be key to achieving guidance.
For FY2026 the dividend was interim ¥80 and year-end ¥27 (post-stock-split, equivalent to ¥108 pre-split), totaling ¥107 (pre-split basis). Payout Ratio relative to basic EPS ¥116.94 is 92.3% (after stock split adjustment: year-end ¥27 × 4 split adjustment + interim ¥80) — high on the surface, but due to the stock split the effective payout is about 59.7% (DOE basis 3.1%) and is within an appropriate range. Share buybacks amounted to ¥35.16B (CF basis ¥35.14B), and Total Return Ratio ((dividends ¥90.74B + buybacks ¥35.16B) / Net Income ¥200.68B) ≈ 62.7%—high. Free Cash Flow ¥185.58B covers dividends ¥90.74B by 2.04x and dividends + buybacks ¥125.90B by 1.47x, supporting sustainability of returns. Cash and deposits ¥646.79B also support continuation of dividends; however, because the payout ratio is high, there is room to adjust dividend policy if profits fall when extraordinary gains are absent next year. Dividend guidance of ¥25 reflects a policy to maintain effective post-split distribution, and medium-term strategy appears to balance stable dividends with share buybacks to improve capital efficiency.
Project mix variability risk: The Building Construction Business accounts for 52.2% of Operating Income, while Civil Engineering posted revenue growth but profit decline. Timing of large project orders and profitability volatility can sway margins; maintaining a completed contract gross profit margin of 10.9% requires continued order selection and price pass-through. Competitive pressure or renewed rises in material and labor costs could compress margins. Completed contract receivables ¥2,405.70B (49.3% of Revenue) contain collection timing uncertainty, creating OCF variability risk.
Interest rate and funding cost risk: Short-term borrowings ¥115.75B (prior year ¥81.09B, +42.7%) increased; if rates rise, interest expense currently ¥10.0B (prior year ¥5.71B) could increase further and press non-operating expenses. Although Interest Coverage is 27.15x, changes in the interest environment could weigh on Ordinary Income. With interest-bearing debt ¥414.33B vs cash ¥646.79B, the company is net cash, but increased working capital needs may require additional borrowing and raise interest burden risks.
Extraordinary gains disappearance and sustainability risk: Net Income ¥200.68B included ¥42.09B gains on sales of investment securities, temporarily boosting final profit by +21.3%. If these gains do not recur next year, sustaining core Operating Income ¥270.92B becomes crucial. The drop in provision for construction losses to ¥8.75B (prior year ¥23.67B, -63.0%) also supported this year’s profit, but new unprofitable projects or increased provisions would pressure earnings. The roughly -12% shortfall of operating and ordinary income versus full-year guidance also highlights the challenge of building core earnings, requiring improved order and construction management to meet guidance next year.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 5.6% | 5.5% (3.5%–7.2%) | +0.0pt |
| Net Margin | 3.7% | 3.5% (2.5%–4.4%) | +0.2pt |
Both operating and net margins are roughly in line with the industry median, placing profitability within the industry standard range.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | -2.2% | 9.8% (-2.1%–15.1%) | -12.0pt |
Revenue growth of -2.2% substantially lags the industry median +9.8%, reflecting order selection and a shift to higher-margin projects that run counter to the industry trend.
※Source: Company aggregation
Structural improvement in Operating Margin starting from a completed contract gross profit margin of 10.9% (prior year 7.7%, +3.2pt) is notable; easing of material cost pressure and price pass-through normalized Building Construction profitability. ROE recovery to 9.7% (prior year 3.4%) evidences improved capital efficiency; sustainability will depend on cost control and disciplined order selection. The decline in Civil Engineering operating margin to 5.2% (prior year 6.6%) points to project mix issues and recovery in that segment will be key for future earnings stability.
OCF ¥250.16B is 1.25x Net Income ¥200.68B indicating high quality, but OCF/EBITDA 0.86x is slightly below the 0.9x benchmark, affected by advance receipts -¥46.43B and accounts payable -¥376.0B. Free Cash Flow ¥185.58B covers dividends + buybacks ¥125.78B by 1.48x, preserving return capacity; however, variability in collection timing of completed contract receivables ¥2,405.70B (49.3% of Revenue) remains a structural driver of OCF volatility. Improving cash conversion and stabilizing collection cycles are key next-term focus areas.
Net Income benefited from gains on sales of investment securities ¥42.09B, boosting final profit by +21.3%, but next year the loss of such extraordinary gains will test the sustainability of core Operating Income ¥270.92B. The operating and ordinary income shortfall of about -12% versus full-year guidance highlights the need for improved order and execution accuracy. The substantial reduction in provision for construction losses to ¥8.75B (prior year ¥23.67B, -63.0%) indicates fewer unprofitable projects, but risks from new provisions remain. Payout Ratio 92.3% (effectively ~59.7%) and share buybacks ¥35.14B give a Total Return Ratio of 62.7% that is within a reasonable range, though dividend policy may need adjustment depending on next year’s profit level.
This report is an earnings analysis document automatically generated by AI analyzing XBRL earnings release data. It does not constitute 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.