| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| 売上高 | ¥5320.6B | ¥5116.3B | +4.0% |
| 営業利益 | ¥239.1B | ¥388.7B | -38.5% |
| 経常利益 | ¥217.8B | ¥376.6B | -42.2% |
| 純利益 | ¥230.3B | ¥284.3B | -19.0% |
| ROE | 2.0% | 2.5% | - |
The Q1 results for FY2026 showed Revenue of ¥5320.6B (YoY +¥204.3B +4.0%), Operating Income of ¥239.1B (YoY -¥149.6B -38.5%), Ordinary Income of ¥217.8B (YoY -¥158.8B -42.2%), and Net Income attributable to owners of parent of ¥167.6B (YoY -¥38.2B -18.6%). Despite revenue growth, there was a significant decline at the operating and ordinary profit stages; Special Income of ¥95.5B (including Gain on Sales of Investment Securities ¥25.8B and Gain on Sales of Subsidiary Shares ¥69.7B) provided support to profit before tax. Operating margin deteriorated to 4.5% from 7.6% a year earlier (-3.1ppt), primarily due to the largest segment, the Overseas Housing Business, where segment margin fell from 12.1% to 7.1% (-5.0ppt), driving the company-wide profit decline.
[Revenue] Revenue was ¥5320.6B (YoY +4.0%), achieving top-line growth. By segment, the Overseas Housing Business was the largest driver at ¥2809.7B (composition ratio 52.8%, +3.7%), the Real Estate Business grew to ¥631.3B (+14.8%) delivering double-digit growth, and the Housing Business remained firm at ¥1266.9B (+3.4%). Conversely, the Lumber and Building Materials Business declined to ¥564.3B (-3.1%) due to market softening. The Resources & Environment Business increased to ¥72.1B (+7.3%), and Other Businesses rose to ¥71.4B (+4.1%). Regionally, the share of overseas business continued to rise; Contract Liabilities accumulated to ¥1138.1B (from ¥989.7B at the end of the prior year, +¥148.4B), indicating short-term order backlog.
[Profitability] Operating Income was ¥239.1B (-38.5%). Cost of sales ratio worsened to 77.9% from 76.1% a year ago (+1.8ppt), reducing gross margin to 22.1% (prior 23.9%). SG&A increased to ¥936.8B (+12.0%), far outpacing revenue growth (+4.0%), raising the SG&A ratio to 17.6% from 16.3% (+1.3ppt) and compressing operating margin to 4.5% (prior 7.6%, -3.1ppt). Non-operating income included Interest Income of ¥16.3B (prior ¥11.7B) while Interest Expense rose to ¥40.3B (prior ¥26.3B), up 53.2%, increasing interest burden; equity-method income deteriorated from a ¥3.0B profit a year ago to a ¥-23.5B loss this period. As a result, Ordinary Income was ¥217.8B (-42.2%). At the extraordinary stage, Special Income of ¥95.5B (including Gain on Sales of Investment Securities ¥25.8B and Gain on Sales of Subsidiary Shares ¥69.7B) was recorded, leaving Profit Before Tax at ¥313.3B (-16.8%). Income taxes were ¥82.9B (effective tax rate 26.5%); after deducting Non-controlling Interests of ¥62.8B, Net Income attributable to owners of parent was ¥167.6B (-18.6%), resulting in a revenue-increase but profit-decrease outcome.
The Overseas Housing Business (Revenue ¥2809.7B, +3.7%) reported Segment Income of ¥198.9B, a significant decline from ¥326.6B a year ago, with margin falling to 7.1% (prior 12.1%). Rising construction costs, higher interest burden, and changes in sales mix pressured margins and were the primary drivers of company-wide profit decline. The Housing Business (Revenue ¥1266.9B, +3.4%) recorded Segment Income of ¥64.8B (prior ¥74.2B, -12.7%), with margin falling to 5.1% (prior 6.1%). The Real Estate Business (Revenue ¥631.3B, +14.8%) posted a Segment Loss of ¥-31.6B, narrowing from ¥-42.0B a year earlier as project progress contributed. The Lumber and Building Materials Business (Revenue ¥564.3B, -3.1%) turned to a Segment Loss of ¥-10.6B (prior ¥5.6B profit), hit by price and spread compression from market softness. The Resources & Environment Business (Revenue ¥72.1B, +7.3%) saw Segment Income of ¥2.5B (prior ¥4.4B, -43.2%), and Other Businesses (Revenue ¥71.4B, +4.1%) had Segment Income of ¥11.9B (prior ¥20.5B, -42.0%).
[Profitability] Operating margin 4.5% (down -3.1ppt from 7.6%), Gross Profit Margin 22.1% (down -1.8ppt from 23.9%), SG&A Ratio 17.6% (up +1.3ppt from 16.3%) — profitability deteriorated broadly. ROE 2.0% (annualized) remained low, indicating significant room to improve capital efficiency. [Cash Quality] Days Sales Outstanding were 60.8 days, roughly flat year-on-year, but Advances Paid for Construction in Progress increased to ¥245.1B (from ¥226.6B at fiscal year-end, +8.2%), and Inventories for Sale (Real Estate for Sale) rose to ¥8049.8B (from ¥7566.3B at fiscal year-end, +6.4%), showing notable inventory accumulation and large working capital swings. [Investment Efficiency] Total Asset Turnover was 0.20x (annualized 0.81x), and Return on Total Assets (based on Ordinary Income) was 0.8% (annualized 3.3%), both low. [Financial Soundness] Equity Ratio 45.2% (up +1.0ppt from 44.2%), Debt-to-Equity Ratio 1.21x, Current Ratio 239.6%, Quick Ratio 236.0% — liquidity and capital structure remain at healthy levels. Interest-bearing debt (Short-term Borrowings ¥1333.4B, Long-term Borrowings ¥5455.8B, Bonds ¥502.7B, Bonds Redeemable within 1 Year ¥200.5B) totaled ¥6788.7B, while Cash and Deposits ¥1505.6B and Marketable Securities ¥60.0B secure liquidity.
Direct disclosure of Operating Cash Flow is not provided; cash movements are analyzed from balance sheet changes. Cash and Deposits decreased to ¥1505.6B from ¥1854.1B at fiscal year-end (-¥348.5B). Increases in Real Estate for Sale (+¥483.5B) and Advances Paid for Construction in Progress (+¥18.5B) consumed working capital, while an increase in Contract Liabilities (+¥148.4B) partially offset as short-term advance receipts. Accounts Receivable decreased to ¥883.2B (from ¥992.6B at fiscal year-end, -¥109.4B), indicating collection progress, but Accounts Payable also decreased to ¥756.3B (from ¥873.8B at fiscal year-end, -¥117.5B), shortening the payment cycle. Interest payments increased to ¥40.3B (up +53.2% from ¥26.3B), raising cash cost from interest. Interest-bearing debt slightly decreased to ¥6788.7B (from ¥6827.7B at fiscal year-end, -¥39.0B), but inventory buildup and inventory turnover trends will be key drivers of future Free Cash Flow volatility.
Against Ordinary Income of ¥217.8B, Special Income of ¥95.5B (including Gain on Sales of Investment Securities ¥25.8B and Gain on Sales of Subsidiary Shares ¥69.7B) was recorded, meaning roughly 30.5% of Profit Before Tax of ¥313.3B depended on non-recurring items. Non-operating factors included increased Interest Expense (+¥14.0B) and deterioration in equity-method income (from +¥3.0B to -¥23.5B, a swing of -¥26.5B), which pressured ordinary profitability. Comprehensive Income was ¥647.5B, far exceeding Net Income of ¥230.3B; Other Comprehensive Income of ¥417.2B comprised Foreign Currency Translation Adjustments ¥220.3B, Deferred Hedge Gains/Losses ¥134.0B, and Valuation Differences on Available-for-sale Securities ¥51.0B, with yen depreciation and hedge valuation gains contributing significantly. However, these are unrealized valuation gains and could reverse with future currency or interest rate movements. From a recurring earnings perspective, the decline in Operating Income and deterioration in non-operating items indicate core earnings weakness; excluding the support from Special Income, core earnings quality has deteriorated.
Full Year guidance remains unchanged: Revenue ¥2,5900B (YoY +14.2%), Operating Income ¥1570B (-6.9%), Ordinary Income ¥1600B (-8.5%), Net Income attributable to owners of parent ¥950B. Q1 progress rates are Revenue 20.5% (standard 25%: -4.5ppt), Operating Income 15.2% (standard: -9.8ppt), Ordinary Income 13.6% (standard: -11.4ppt), Net Income attributable to owners of parent 17.6% (standard: -7.4ppt), all below standard progress. The shortfall at operating and ordinary stages is notable, making substantial profit buildup from Q2 onward a prerequisite. Recovery of Overseas Housing margins, concentration of Real Estate project handovers, and success in SG&A control are key to achieving the full-year target. The accumulation of Contract Liabilities suggests sales contribution in the second half, but achieving the forecast without margin improvement is difficult; monitoring progress is important.
Annual dividend forecast is ¥25 (interim and year-end ¥12.5 each), unchanged from prior year. Based on outstanding shares of 618.6M shares (excluding treasury shares 613.1M shares), the annual dividend payout is estimated at approximately ¥15.3B, implying a Payout Ratio of about 16.1% against the full-year net income forecast of ¥950B, a low level indicating high sustainability. Given Cash and Deposits ¥1505.6B and Operating Cash Flow generation potential (Contract Liabilities increase and Accounts Receivable collection), dividend capacity is sufficient. No share buyback has been announced; shareholder returns are limited to dividends. Total Return Ratio remains around 16%, equal to the payout ratio; considering low capital efficiency and ROE, there is room for increased returns, but current policy prioritizes funding for growth investments (inventory and projects).
Risk of further margin deterioration in the Overseas Housing Business: Segment margin fell from 12.1% to 7.1% (-5.0ppt) due to rising construction costs, higher interest burden, and worsening sales mix. Overseas Housing accounts for 52.8% of revenue and is the core business; its margin trajectory will strongly influence company performance. Further deterioration is possible depending on interest rate environments in the U.S. and other markets.
Risk from inventory buildup and timing of sales: Real Estate for Sale ¥8049.8B (up +6.4% year-end), Advances Paid for Construction in Progress ¥245.1B (up +8.2%), indicating rising inventories. Delays in project handovers or market deterioration could slow inventory liquidation, expanding working capital and reducing margins. A reversal of Contract Liabilities ¥1138.1B (increased receipts turning into cash needs during concentrated handover periods) could raise funding volatility.
Risk of increased interest payments due to rising rates: Interest Expense rose to ¥40.3B from ¥26.3B (+53.2%), and interest cost on interest-bearing debt ¥6788.7B is on an upward trend. Further increases are possible depending on future rates, which would expand non-operating expenses and pressure Ordinary Income. Interest Coverage is Operating Income ¥239.1B ÷ Interest Expense ¥40.3B = 5.93x, within a healthy range, but continued decline in operating income would weaken resilience.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| 営業利益率 | 4.5% | – | – |
| 純利益率 | 4.3% | – | – |
Industry comparison data are limited, but an operating margin of 4.5% is inferred to be standard to slightly below average within the construction & housing conglomerate sector, and this large decline this term raises concerns about relative competitiveness.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| 売上高成長率（前年比） | 4.0% | – | – |
Revenue growth of 4.0% represents a stable growth pace, but the lack of accompanying profit growth leaves questions on the quality of growth.
※Source: Company compilation
Restoring margins in the Overseas Housing Business is the top priority: The segment margin fell by 5.0ppt year-on-year and led the company-wide profit decline. Controlling construction costs, improving sales prices and mix, and stabilization of the interest rate environment are prerequisites for performance recovery in the second half and beyond. Contract Liabilities accumulation indicates short-term order backlog, but securing margins at handover is critical.
Significant turnaround is required to meet full-year guidance: Q1 operating income progress was 15.2% (standard -9.8ppt) and ordinary income progress 13.6% (standard -11.4ppt), showing clear lag. Unless large project handovers are concentrated in the second half and SG&A controls are implemented, achieving the full-year target is difficult; the Q2 results and any forecast revisions will be key monitoring points.
Financial soundness and liquidity are secured, but improving capital efficiency is a mid-term challenge: Equity Ratio 45.2%, Current Ratio 239.6% — safety is high and dividend capacity is sufficient. However, ROE 2.0% (annualized) and Total Asset Turnover 0.20x are low; improving inventory turnover, project efficiency, and operating margins is necessary for long-term shareholder value enhancement.
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmark figures are company-compiled reference information based on public financial statements. Investment decisions are your responsibility; consult a professional advisor as necessary before making investment decisions.