PS Construction Co.,Ltd. FY2026 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥73.05B
• Operating Income: ¥6.84B
• Net Income: ¥3.73B
• EPS: ¥93.27

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

PS Construction Co., Ltd. (TSE:1871) delivered a solid FY2026 Q2 performance under JGAAP on a consolidated basis, with revenue up 12.6% YoY to ¥73.1bn and operating income up 19.0% YoY to ¥6.84bn, indicating both healthy top-line momentum and margin improvement. Gross profit of ¥10.49bn implies a gross margin of 14.4%, up versus typical mid-cycle levels for domestic contractors, suggesting disciplined project selection and/or favorable cost pass-through. Operating margin reached 9.4%, underpinned by modest depreciation (¥0.55bn) and tightly managed overheads, and EBITDA of ¥7.38bn translated to a 10.1% margin. Net income rose 16.9% YoY to ¥4.36bn, with an implied effective tax rate of about 31% (based on reported income tax), even though a 0.0% effective tax rate was listed among calculated metrics; the latter likely reflects a data artifact rather than economics. DuPont analysis shows ROE of 7.24%, driven by a 5.97% net margin, asset turnover of 0.538x, and financial leverage of 2.25x, an efficient mix for a construction business with meaningful working capital needs. The current ratio of 169% and working capital of ¥42.9bn indicate comfortable liquidity, while a liabilities-to-equity proxy of 1.21x points to moderate balance sheet leverage. Operating cash flow was ¥5.67bn, 1.30x net income, signaling good earnings-to-cash conversion for the half year. Financing cash flow of -¥5.84bn implies outflows (likely debt repayments and/or shareholder returns), though specific uses are not disclosed. Investing cash flow and cash balance were not disclosed (reported as zero), limiting visibility on capex intensity and net cash position. Dividend data in the feed show zero values for DPS, payout, and FCF coverage; these should be treated as undisclosed rather than actual zeros, so dividend policy and coverage cannot be assessed from this dataset. Overall profitability quality appears strong given high interest coverage (65.7x) and improved operating leverage, while solvency looks sound on available metrics. Revenue growth sustainability will hinge on order intake, backlog quality, and cost inflation pass-through—items not disclosed here. The company’s specialization (prestressed concrete/civil and building work) typically exposes it to fixed-price contract risk, but current margins suggest effective project execution. Key data limitations—undisclosed cash, debt composition, capex, and dividends—temper the precision of cash, leverage, and payout conclusions. Even with these limits, the quarter reflects solid fundamentals, disciplined cost control, and adequate cash generation relative to earnings. Monitoring order trends, backlog, and margin trajectory into 2H will be crucial for assessing full-year durability.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 5.97% (NI ¥4,363m / Revenue ¥73,051m)
• asset_turnover: 0.538x (Revenue ¥73,051m / Assets ¥135,799m)
• financial_leverage: 2.25x (Assets ¥135,799m / Equity ¥60,232m)
• calculated_ROE: 7.24% (matches reported) margin_quality:
• gross_margin: 14.4% (¥10,488m / ¥73,051m), solid for a contractor, indicating favorable project mix/cost control
• operating_margin: 9.4% (¥6,836m / ¥73,051m), improved YoY with SG&A discipline
• ordinary_margin: 9.3% (¥6,800m / ¥73,051m)
• net_margin: 5.97%, consistent with healthy tax-normalized profitability (~31% effective rate estimated from income tax)
• EBITDA_margin: 10.1%, reflecting low capital intensity and modest D&A (¥545m) operating_leverage: Operating income grew 19.0% on 12.6% revenue growth, implying positive operating leverage. This suggests scale benefits and/or better project pricing outweighing cost inflation.

Growth Assessment

revenue_sustainability: 12.6% YoY growth likely reflects robust order execution and possibly strong prior order intake; sustainability depends on new orders and backlog (not disclosed). profit_quality: Margin expansion at gross and operating levels indicates disciplined bidding and execution; low D&A supports earnings quality. outlook: With strong 1H momentum and solid cash conversion, the company appears well-positioned into 2H, but visibility is constrained by lack of disclosed backlog/order intake and macro conditions (materials, labor, and project timing).

Financial Health

liquidity:

• current_ratio: 169.4% (CA ¥104,616m / CL ¥61,742m)
• quick_ratio: 169.4% (inventories undisclosed)
• working_capital: ¥42,874m
• commentary: Ample short-term coverage; however, cash and equivalents were not disclosed, limiting assessment of immediate liquidity buffers. solvency:
• debt_to_equity_proxy: 1.21x (Total liabilities ¥72,955m / Equity ¥60,232m) – proxy due to undisclosed interest-bearing debt
• interest_coverage: 65.7x (Operating income ¥6,836m / Interest expense ¥104m)
• equity_ratio: Undisclosed in usable form (reported 0.0% likely placeholder); balance sheet structure otherwise appears balanced. capital_structure: Moderate leverage for the sector with strong interest coverage. Exact net debt position cannot be determined due to undisclosed cash and debt detail.

Cash Flow Quality

earnings_quality: OCF/NI at 1.30x (¥5,671m/¥4,363m) indicates healthy conversion and limited accrual build in the period. FCF_analysis: Investing CF was undisclosed (reported as zero). Without capex detail, FCF cannot be reliably computed; EBITDA–D&A profile suggests relatively low capex needs, but confirmation is needed. working_capital: Positive OCF suggests effective working capital management despite typical construction-seasonality swings; specific drivers (receivables, advances received, retention) are not disclosed.

Dividend Sustainability

payout_ratio_assessment: Payout ratio reported as 0% and DPS at ¥0.00 should be treated as undisclosed. Using current data, a payout assessment cannot be made. FCF_coverage: Not assessable due to undisclosed capex and FCF; OCF coverage of earnings is strong, which is supportive in principle. policy_outlook: No formal guidance or policy data in the feed. Historical patterns and management commentary (not provided here) are needed to infer policy stability.

Risk Assessment

Business Risks:

• Fixed-price contract risk and execution slippage on large civil/building projects
• Materials cost volatility (steel, cement) and subcontractor cost inflation
• Labor shortages and wage pressure in construction sector
• Project timing and weather-related delays affecting revenue recognition
• Order intake and backlog concentration risk by client or project type
• Regulatory and safety compliance in construction operations

Financial Risks:

• Working capital volatility (receivables, retention, advances) impacting OCF
• Limited disclosure of cash and debt impedes net leverage assessment
• Interest rate changes affecting borrowing costs (albeit low current interest burden)
• Potential large project losses impacting margins and equity

Key Concerns:

• Undisclosed cash, investing cash flows, and dividend data limit payout and net debt analysis
• Sustainability of elevated operating margin absent visibility on backlog quality
• Sensitivity to input cost inflation and ability to pass through on fixed-price contracts

Investment Implications

Key Takeaways:

• Strong 1H with double-digit revenue growth and operating leverage (OI +19% YoY)
• Healthy profitability: 14.4% gross margin, 9.4% operating margin, ROE 7.24%
• Robust cash conversion (OCF/NI 1.30x) and high interest coverage (65.7x)
• Solid liquidity (current ratio 169%) and moderate balance sheet leverage (liabilities/equity 1.21x)
• Data gaps on cash, capex, and dividends constrain assessment of FCF and payout

Metrics to Watch:

• Order intake and backlog levels/mix
• Gross margin trajectory and cost pass-through on new bids
• OCF/NI and working capital swings (receivables, advances, retention)
• Interest-bearing debt and net cash/(net debt) once disclosed
• Capex and maintenance requirements vs. D&A
• Dividend policy updates and capital return actions (buybacks/repayments)

Relative Positioning: Within Japanese mid-cap construction peers, the company exhibits above-average operating margins and strong cash conversion for 1H, with moderate leverage; visibility on backlog and net cash is weaker due to disclosure gaps in this dataset.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
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