| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| Revenue | ¥2724.7B | ¥2709.7B | +0.6% |
| Operating Income | ¥214.2B | ¥160.4B | +33.5% |
| Ordinary Income | ¥226.4B | ¥153.6B | +47.4% |
| Net Income | ¥156.8B | ¥96.6B | +62.3% |
| ROE | 10.2% | 7.1% | - |
For the fiscal year ending March 2026, Revenue was ¥2724.7B (YoY +¥15.0B +0.6%) and remained nearly flat, while Operating Income rose significantly to ¥214.2B (YoY +¥53.8B +33.5%), Ordinary Income to ¥226.4B (YoY +¥72.8B +47.4%), and Net Income attributable to parent company shareholders to ¥156.8B (YoY +¥60.2B +62.3%). The primary driver of improved profitability was a 3.0pt improvement in cost of sales ratio to 82.2%, lifting completed-contract gross margin from 14.2% to 17.0% (+2.8pt). Operating margin expanded to 7.9% (previous 5.9%) (+2.0pt). Increased equity-method investment income of ¥15.7B (previous ¥4.3B) and recognition of ¥20.9B gain on sale of investment securities also boosted bottom-line results. Return on assets on an ordinary income basis improved to 7.3% (previous 5.0%), ROE improved to 10.2% (previous 8.0%), leverage fell to 2.04x (previous 2.27x), realizing higher profitability while maintaining financial soundness.
【Revenue】Revenue was ¥2724.7B (YoY +0.6%), a slight increase. By segment, the Equipment Construction Business accounted for ¥2549.9B (+0.3%), representing 93.6% of total and remaining largely flat; the Energy Business was ¥127.0B (+3.4%); Other was ¥95.9B (+1.8%) — both small increases. While order conditions for the core Equipment Construction Business remain healthy, growth in completed contract revenue was limited. The Energy Business maintained revenue growth supported by stable operations of FIT solar power generation and PPA services. Revenue composition is highly concentrated in Equipment Construction, posing project concentration risk.
【Profitability】Gross profit was ¥484.5B (previous ¥404.8B), and gross margin improved to 17.8% (previous 14.9%) (+2.9pt). This was mainly due to the completed-contract gross margin in the construction segment rising from 14.2% to 17.0% (+2.8pt), driven by price pass-through and improved project mix (greater contribution from high-margin Energy Business). SG&A increased to ¥270.3B (previous ¥244.3B, +10.6%), substantially outpacing revenue growth (+0.6%), raising SG&A ratio to 9.9% (previous 9.0%) (+0.9pt). However, gross margin improvement absorbed this, resulting in Operating Income of ¥214.2B (previous ¥160.4B) and operating margin of 7.9% (previous 5.9%) (+2.0pt). Non-operating items included equity-method investment income of ¥15.7B (previous ¥4.3B) and foreign exchange gains of ¥3.7B, producing Ordinary Income of ¥226.4B (previous ¥153.6B, +47.4%). Extraordinary income was ¥30.8B (previous ¥23.7B), including ¥20.9B gain on sale of investment securities and ¥5.0B insurance proceeds, temporarily boosting final profit. Profit before income taxes was ¥254.8B (previous ¥162.0B, +57.3%); after income taxes of ¥76.6B (effective tax rate 30.1%), Net Income was ¥156.8B (previous ¥96.6B, +62.3%). In summary, the company achieved revenue and profit growth, with a marked increase in profits driven by operating-level margin improvement.
The Equipment Construction Business reported Revenue of ¥2549.9B (YoY +0.3%), Operating Income of ¥255.4B (YoY +25.6%), and margin improved to 10.0% (previous 8.0%) (+2.0pt). The completed-contract gross margin rising to 17.0% (previous 14.2%) contributed via improved project profitability and more precise construction management. After corporate allocations (corporate costs deducted ¥82.9B), it remains the primary profit source. The Energy Business posted Revenue of ¥127.0B (YoY +3.4%), Operating Income of ¥35.1B (YoY +25.0%), and margin of 27.7% (previous 28.1%), maintaining high levels. Stable operations of FIT solar and PPA services bolstered high-margin contributions to consolidated profitability. Other (merchandise sales, leasing, etc.) had Revenue of ¥95.9B (YoY +1.8%), Operating Income of ¥5.6B (YoY +1.8%), margin 5.8%, broadly stable. Corporate expenses increased to ¥82.0B (previous ¥77.6B), indicating expansion in administrative costs; fixed-cost control remains a future challenge.
【Profitability】Operating margin 7.9% (previous 5.9%), Net margin 5.8% (previous 3.6%) — improvements of +2.0pt and +2.2pt respectively. ROE rose to 10.2% (previous 8.0%), decomposed as Net margin 6.5% (Net Income ¥178.1B / Revenue) × Total asset turnover 0.873 × Financial leverage 2.04x. Margin-driven improvement delivered higher-quality ROE. 【Cash Quality】Operating Cash Flow was ¥260.9B (previous ¥190.1B, +37.2%), a healthy 1.66x of Net Income ¥156.8B. OCF/EBITDA (Operating CF / (Operating Income + Depreciation)) was 0.81x, slightly below the 0.9x benchmark, attributable to seasonal working capital movements (accounts payable -¥36.3B, advance receipts -¥14.8B). Accrual ratio (Net Income - Operating CF) / Total Assets = -3.3%, within a healthy range. 【Investment Efficiency】Capital expenditures ¥70.7B / Depreciation ¥107.7B = 0.66x, indicating restrained investment; maintenance/replacement investment remains modest. Total asset turnover 0.873x (previous 0.872x) was flat, with turnover efficiency largely steady. 【Financial Soundness】Equity Ratio improved to 49.1% (previous 44.0%) (+5.1pt). Current ratio 161.3% (previous 155.1%), indicating solid short-term liquidity. Debt/EBITDA (interest-bearing debt / EBITDA) decreased to 1.09x (previous 1.52x), and interest coverage (Operating Income / interest expense) improved to 12.2x (previous 8.5x), strengthening credit resilience.
Operating CF was ¥260.9B (previous ¥190.1B, +37.2%). Starting from profit before income taxes ¥254.8B, working capital changes (accounts receivable +¥12.0B, inventories -¥7.1B, accounts payable -¥36.3B, advance receipts -¥14.8B) and corporate tax payments -¥58.0B yielded cash generation. Adding depreciation ¥107.7B produced an Operating CF subtotal of ¥309.0B, or 1.97x of Net Income ¥156.8B, a high level. Investing CF was -¥37.2B, including capital expenditures -¥70.7B (restrained) offset partially by proceeds from sale of investment securities ¥23.8B. Free Cash Flow was ¥223.8B (previous ¥127.3B), a substantial increase, comfortably covering combined dividend payments ¥53.7B and capital expenditures ¥70.7B (approx. ¥124B). Financing CF was -¥167.0B, with major items including lease liabilities repayments -¥82.9B, net decrease in short-term borrowings -¥2.5B, long-term borrowings repayments -¥10.8B, and dividend payments -¥53.7B. Cash and cash equivalents at period-end increased to ¥460.5B (opening ¥402.9B, +¥57.5B), strengthening liquidity. Capex/Depreciation 0.66x suggests restrained replacement investment; accelerating mid-term productivity investments is a challenge.
Primary earnings drivers were Operating Income ¥214.2B and equity-method investment income ¥15.7B, indicating strong core operational profitability. Non-operating income ¥30.5B represents 1.1% of Revenue, well below a 5% threshold, indicating low reliance on non-operating items. Extraordinary income ¥30.8B (including ¥20.9B gain on sale of investment securities and ¥5.0B insurance proceeds) was a temporary factor; the gap between Ordinary Income ¥226.4B and Net Income ¥156.8B is attributable to extraordinary items and tax burden (effective tax rate 30.1%). Comprehensive income ¥218.5B exceeded Net Income by ¥61.7B, with other comprehensive income ¥40.2B (adjustments related to retirement benefits ¥39.5B, valuation differences on securities ¥4.7B) recorded — non-cash items reflecting mark-to-market increases in pension assets. The accrual ratio of -3.3% and Operating CF exceeding Net Income indicate good cash backing for earnings. The 3.5pt gap between ordinary-stage margin 8.3% (Ordinary Income / Revenue) and net margin 5.8% is explainable by extraordinary items and taxes; in normal times, assessment on an ordinary income basis is appropriate. Overall, operating-level improvements underpin profitability gains, while one-off items mainly elevated final profit.
For FY ending March 2027, guidance is Revenue ¥2850.0B (YoY +4.6%), Operating Income ¥240.0B (YoY +12.0%), Ordinary Income ¥235.0B (YoY +3.8%), Net Income attributable to parent company shareholders ¥169.0B (YoY +7.8%), EPS ¥192.58. Guidance is conservative, largely maintaining this year’s high profit level while expecting modest revenue and profit growth. Revenue assumes order backlog digestion in Equipment Construction and expansion of the Energy Business. Operating Income is projected to rise from ¥214.2B to ¥240.0B (+12.0%), premised on sustained gross margin and SG&A restraint. Ordinary Income is planned at ¥235.0B (from ¥226.4B, +3.8%), below Operating Income growth due to conservative assumptions for equity-method investment income and non-operating income. Net Income projected at ¥169.0B (from ¥156.8B, +7.8%) reflects expectation of maintaining or modestly increasing ordinary-stage profits, taking into account the likely absence of this year’s ¥30.8B extraordinary income. Dividend guidance ¥31.0 (previous annualized ¥76.0 adjusted for stock split equates to annual ¥50.0) signals a dividend increase policy. Progress rate (first-half results / full-year forecast) stands at Revenue 95.6%, Operating Income 89.3%, Ordinary Income 96.3%, Net Income 92.8%, generally in line with initial expectations.
A year-end dividend of ¥48.0 (including interim dividend ¥28.0, total annual ¥76.0) was paid. Payout ratio was 43.2% (annual dividends ¥76.0B / Net Income attributable to parent company shareholders ¥156.8B), a sustainable level. With FCF ¥223.8B and dividend payments ¥53.7B, dividend coverage was 4.17x, consistent with increases in retained earnings (retained earnings +¥124.3B). DOE (dividend / equity) on an effective basis is about 3.5%, indicating efficient return on equity. No share buybacks were executed this fiscal year (previous ¥6.7B), with dividends as the main return policy. Next fiscal year’s dividend guidance ¥31.0 (adjusted for 1:5 stock split on 2024-10-01) indicates a dividend-increase stance and intention to maintain payout ratio in the 40% range. Strong FCF generation reduces concerns over dividend sustainability.
Project concentration risk: The Equipment Construction Business accounts for 93.6% of Revenue, making the company susceptible to demand-supply shifts or intensified price competition in specific areas. Provision for construction loss allowance increased to ¥5.9B (previous ¥4.0B, +47.3%), requiring continuous monitoring for profitability deterioration on large projects. Completed contract receivables ¥883.8B (32.4% of Revenue) remain high, and delays in collection could impact liquidity.
Cost inflation and SG&A expansion risk: Amid continued labor and materials cost pressures, gross margin improvement absorbed these this fiscal year, but SG&A grew +10.6% YoY (substantially exceeding Revenue growth +0.6%), signaling fixed-cost expansion. SG&A ratio rose to 9.9% (previous 9.0%) (+0.9pt), and further administrative cost increases could compress margins.
Short-term funding dependence risk: Of current liabilities ¥928.5B, short-term borrowings are ¥160.8B and current lease liabilities ¥84.9B, with short-term liabilities ratio of 45.7%. Cash / short-term liabilities is 2.97x, indicating strong liquidity, but rising interest rates or deteriorating funding conditions could increase refinancing costs. Decrease in advance receipts to ¥23.4B (previous ¥38.2B, -38.7%) suggests reduced pre-construction funding capacity and highlights the importance of precise working capital management.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 7.9% | 5.5% (3.5%–7.2%) | +2.3pt |
| Net Margin | 5.8% | 3.5% (2.5%–4.4%) | +2.2pt |
Both Operating Margin 7.9% and Net Margin 5.8% substantially exceed industry medians, securing a top-tier profitability position within the construction sector.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 0.6% | 9.8% (-2.1%–15.1%) | -9.2pt |
Revenue growth of +0.6% lags the industry median of +9.8% by a wide margin, indicating a slower top-line expansion pace relative to peers and a strategic emphasis on profitability.
※Source: Company compilation
Margin-driven significant profit increase: Gross margin +2.9pt and Operating margin +2.0pt resulted in substantial profit gains. Completed-contract gross margin rose from 14.2% to 17.0%, reflecting improved project profitability and successful price pass-through. ROE improved to 10.2% (previous 8.0%) while financial leverage fell to 2.04x (previous 2.27x), achieving higher-quality ROE. Operating CF ¥260.9B is 1.66x Net Income, and FCF ¥223.8B sufficiently covers combined dividends and capex of approx. ¥124B, demonstrating strong cash generation.
Capex/Depreciation 0.66x indicates restrained investment; maintenance/replacement investment is modest. Active mid-term productivity investments (BIM, digitalization, etc.) are key to maintaining competitiveness. SG&A grew +10.6% YoY, far exceeding revenue growth (+0.6%), warranting attention to fixed-cost expansion. Short-term liabilities ratio 45.7% is somewhat high, making the company sensitive to interest rate rises and changes in funding conditions.
Equipment Construction Business accounts for 93.6% of Revenue, so project concentration risk warrants attention. Provision for construction loss allowance increased to ¥5.9B (previous ¥4.0B), highlighting the importance of large-project profitability management. Next-year guidance calls for Revenue +4.6% and Operating Income +12.0%, but achievement depends on sustaining gross margin and controlling SG&A. Continued contribution from equity-method investment income ¥15.7B (previous ¥4.3B) and the absence of extraordinary income should be considered; maintaining or modestly increasing ordinary-stage profits is the focus.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the Company based on publicly available financial statements. Investment decisions are your responsibility; please consult a professional advisor as necessary before making investment decisions.