| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥4239.2B | ¥3816.6B | +11.1% |
| Operating Income | ¥477.4B | ¥324.1B | +47.3% |
| Ordinary Income | ¥506.4B | ¥349.7B | +44.8% |
| Net Income | ¥340.7B | ¥262.3B | +29.9% |
| ROE | 15.8% | 14.2% | - |
For the fiscal year ending March 2026, full-year results landed at Revenue ¥4,239.2B (YoY +¥422.6B, +11.1%), Operating Income ¥477.4B (YoY +¥153.3B, +47.3%), Ordinary Income ¥506.4B (YoY +¥156.7B, +44.8%), and Net Income attributable to owners of the parent ¥340.7B (YoY +¥78.4B, +29.9%), representing growth in both top- and bottom-line. High-margin performance in the Equipment Construction Business was the main driver; Gross Profit Margin on Completed Contracts improved to 25.2% (from 20.6% last year, +4.6pt), and Operating Margin improved to 11.3% (from 8.5% last year, +2.8pt), indicating structural enhancement of profitability. ROE reached 15.8%, a top-tier industry level, and improvements in gross margin, SG&A ratio, and operating leverage jointly accelerated Net Income growth.
[Revenue] Revenue reached ¥4,239.2B (+11.1%), led by the Equipment Construction Business at ¥4,154.3B (+11.2%). By region, Japan was ¥3,331.7B, Southeast Asia ¥509.5B (from ¥273.4B last year, +86.3%), and Other ¥398.1B, with significant expansion in Southeast Asia. Completed contract sales were ¥2,945.0B (vs. ¥2,742.7B prior year), supported by high-value projects such as data centers and semiconductor manufacturing facilities. Manufacturing and sales of equipment and devices were ¥93.5B (+9.5%). Contract assets were ¥573.3B (prior year ¥605.9B), reflecting progress in milestone billing, and Advances Received on Uncompleted Construction were ¥179.9B (prior year ¥209.8B, -14.2%) as advance payments were drawn down.
[Profitability] Operating Income was ¥477.4B (+47.3%), chiefly due to improvement in Gross Profit Margin on Completed Contracts to 25.2% (from 20.6%, +4.6pt). SG&A expenses increased to ¥459.7B (SG&A ratio 10.8%, from 10.3% last year, +0.5pt), but gross margin expansion absorbed the increase and Operating Margin rose to 11.3% (from 8.5%, +2.8pt). Provision for construction losses decreased to ¥2.5B (from ¥4.9B, -48.5%), suggesting improved margin management. Ordinary Income was ¥506.4B (+44.8%), with non-operating income of ¥44.5B (dividends received ¥9.8B, interest income ¥6.2B, equity-method gains ¥8.2B, etc.) contributing. Extraordinary gains were ¥23.2B (gain on disposal of fixed assets ¥15.2B, gain on sale of investment securities ¥8.0B), which temporarily boosted profits. After deducting corporate taxes ¥148.1B, Net Income attributable to owners of the parent was ¥340.7B (+29.9%). Including Net Income attributable to non-controlling interests ¥5.4B, consolidated Net Income was ¥346.2B. The sum of non-operating income and extraordinary gains was approximately ¥67B, accounting for about 13% of Ordinary Income — a level that may not persist into the next fiscal year. In conclusion, the company achieved revenue and profit growth, underpinned by improved gross margins in equipment construction and enhanced operating leverage.
The Equipment Construction Business recorded Revenue ¥4,154.3B (+11.2%), Operating Income ¥467.7B (+47.4%), and Operating Margin 11.3% (from 10.1% last year, +1.2pt), indicating structural improvement in the core business’s profitability. Gross margin on Completed Contracts of ¥2,945.0B was high at 25.2%, aided by price pass-through and optimization of project mix. The Manufacturing & Sales of Equipment Business posted Revenue ¥93.5B (+9.5%), Operating Income ¥9.1B (+56.6%), and Operating Margin 9.7% (from 5.8% last year, +3.9pt), demonstrating improved profitability. Other segments contributed Revenue ¥1.2B and Operating Income ¥0.8B, covering small-scale businesses such as insurance agency operations. The Equipment Construction Business accounted for 97.8% of group revenue, indicating high business concentration, while geographic diversification advanced due to the rising share from Southeast Asia.
[Profitability] Operating Margin 11.3% (from 8.5%, +2.8pt) and Net Margin 8.0% (from 6.9%, +1.2pt) show clear improvement in profitability. ROE 15.8% reached a top-tier industry level, while Equity Ratio was 56.3% (from 55.0%), maintaining financial soundness alongside improved capital efficiency. Gross Profit Margin on Completed Contracts of 25.2% (from 20.6%) is at a record high, driven by securing high-value projects and strict cost control. [Cash Quality] Operating Cash Flow was ¥297.2B, equivalent to 0.86x of Net Income ¥346.2B, with increases in trade receivables -¥147.0B and decreases in advances received -¥31.6B absorbing operating working capital. OCF/EBITDA multiple was 0.58x (Operating Cash Flow ¥297.2B ÷ EBITDA ¥511.9B), indicating scope for improvement in cash conversion efficiency. [Investment Efficiency] Total asset turnover was 1.11x (from 1.14x prior year), roughly flat; capital expenditures (tangible + intangible) totaled ¥59.2B, 1.7x depreciation ¥34.4B, indicating a growth-oriented investment stance. [Financial Soundness] Equity Ratio 56.3%, Debt/EBITDA 0.32x (Interest-bearing debt ¥164.1B ÷ EBITDA ¥511.9B), Current Ratio 181.2%, Interest Coverage 113x (EBITDA ¥511.9B ÷ interest expense ¥4.2B) reflect a conservative structure. Short-term borrowings ¥274.1B (prior year ¥177.4B, +54.5%) were used for working capital and shareholder returns, raising the short-term portion of interest-bearing debt. Cash and deposits ¥482.3B cover 1.75x of short-term liabilities, providing ample payment capacity, though rollover management remains important.
Operating Cash Flow was ¥297.2B (from ¥58.9B prior year, +405.1%), significantly affected by working capital movements relative to Pretax Income ¥528.3B. From subtotal ¥424.4B (after non-cash adjustments including depreciation) there were trade receivables increase -¥147.0B, trade payables increase ¥11.6B, advances received on uncompleted construction decrease -¥31.6B and other working capital reversals, and after corporate tax payments -¥144.2B the figure settled at the reported level. Investing Cash Flow was -¥118.4B, with purchases of tangible and intangible assets -¥50.7B and purchases of investment securities -¥85.1B as main outflows, partially offset by collections of sales proceeds and others ¥10.1B. Financing Cash Flow was -¥169.6B, led by dividend payments -¥126.3B and share buybacks -¥82.1B (total shareholder returns ¥194.4B), offset by short-term borrowings increase ¥91.2B and corporate bond redemptions -¥50.0B. Free Cash Flow was ¥178.8B (Operating Cash Flow ¥297.2B + Investing Cash Flow -¥118.4B), giving coverage of total shareholder returns ¥194.4B at 0.92x, slightly short. Cash and cash equivalents at period-end were ¥425.4B (opening balance ¥414.6B), an increase of ¥10.8B. Strong absorption of working capital underscores that management of receivable terms and securing advances will be key to improving cash flows next fiscal year.
Core recurring earnings comprise Operating Income ¥477.4B and equity-method income ¥8.2B, totaling approximately ¥486B. Of non-operating income ¥44.5B, dividends received ¥9.8B and interest income ¥6.2B are stable financial revenues; insurance dividends ¥1.7B also display continuity. Conversely, extraordinary gains ¥23.2B (gain on disposal of fixed assets ¥15.2B, gain on sale of investment securities ¥8.0B) are one-off items and present risk of decline in subsequent periods. Non-operating expenses ¥15.5B (including interest expense ¥4.2B) are modest, and non-operating items structurally boost Ordinary Income by about 6% over Operating Income. Operating Cash Flow ¥297.2B ÷ Net Income ¥346.2B = 0.86x, and OCF/EBITDA 0.58x indicate mid-level cash conversion, impacted by trade receivables growth and advances reduction. Comprehensive income ¥490.5B substantially exceeded Net Income ¥346.2B, aided by Other Comprehensive Income ¥144.3B (valuation difference on securities ¥75.0B, retirement benefit adjustments ¥27.1B, etc.). Accrual factors are mainly temporary working capital absorption, and overall the quality of earnings is generally sound.
Progress against full-year forecasts is: Revenue 96.4% (¥4,239.2B ÷ ¥4,400.0B), Operating Income 95.5% (¥477.4B ÷ ¥500.0B), Ordinary Income 97.4% (¥506.4B ÷ ¥520.0B), Net Income 92.8% (¥340.7B ÷ ¥367.0B). While broadly within the achievement range, Operating and Net Income are slightly short of plan. Timing of project acceptances at fiscal year-end and the level of extraordinary gains may have caused variance versus plan. If Southeast Asia growth and continuation of high-margin projects are confirmed, the probability of achieving next fiscal year guidance is judged high. Although backlog figures are not disclosed quantitatively, movements in Contract Assets ¥573.3B and Advances Received on Uncompleted Construction ¥179.9B suggest that progress in milestone billing and drawdown of advances affected period-end figures.
Interim dividend was ¥86 per share (pre-stock-split basis), year-end dividend ¥72 per share (after stock split adjustment), giving an annual dividend of ¥158 per share (on a 2-for-1 split-adjusted base, interim ¥86 + year-end ¥144 = ¥230). Reported Payout Ratio is 40.1% (Total dividends ¥11.45B ÷ Net Income attributable to owners of the parent ¥340.7B × adjustment for average shares during the period), while Total Return Ratio including share repurchases ¥82.1B is approximately 52% (dividends ¥11.29B + share repurchases ¥8.21B = ¥19.50B ÷ Net Income ¥340.7B × 57.2%). DOE is 6.4%, maintaining a return level commensurate with shareholders’ equity. Dividend payments ¥12.63B represent a 2.4x coverage of Operating Cash Flow ¥297.2B, providing cushion, whereas Total Return ¥19.50B coverage by FCF is 0.92x and somewhat insufficient, supplemented by tactical short-term borrowings. The dividend policy is stability-oriented; sustainability is high if working capital improvement is confirmed.
Working capital reverse-rotation risk: Increase in trade receivables -¥147.0B and decrease in advances received -¥31.6B have pressured Operating Cash Flow, with OCF/EBITDA at 0.58x indicating low positioning. Overlap of milestone-billing progress and drawdown of advances can weaken year-end cash generation. Strengthening receivable terms management and securing advances are necessary; working capital management next fiscal year is the top priority.
Rollover risk from concentration of short-term liabilities: Short-term borrowings ¥274.1B (+54.5%) and corporate bonds maturing within one year ¥50.0B raise the short-term portion of interest-bearing debt, increasing refinancing burdens during the year. Although the Current Ratio 181.2% and cash ¥482.3B provide payment capacity, attention is needed to potential deterioration of rollover terms in a rising-rate or volatile market environment. Conversion to long-term funding and diversification of funding sources are desirable.
Margin volatility from project mix fluctuations: Gross Profit Margin on Completed Contracts 25.2% (from 20.6%, +4.6pt) heavily reflects contribution of high-value projects; changes in project composition can cause profit margin swings. Upward pressure on labor, subcontracting, and material costs may occur, and delays in price pass-through or inclusion of low-margin projects could reduce Operating Margin. Overseas (ASEAN) projects carry construction schedule delays and local regulatory risks.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 11.3% | 5.5% (3.5%–7.2%) | +5.7pt |
| Net Margin | 8.0% | 3.5% (2.5%–4.4%) | +4.5pt |
Within the equipment construction industry, profitability sits in the upper group, confirming advantages in high-value projects and cost control.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 11.1% | 9.8% (-2.1%–15.1%) | +1.2pt |
Revenue growth exceeds the industry median, supported by Southeast Asia expansion and capturing domestic high-value projects.
※Source: Company compilation
Structural shift in profitability: Operating Margin 11.3% (from 8.5%, +2.8pt) and Gross Profit Margin on Completed Contracts 25.2% (from 20.6%, +4.6pt) show discontinuous improvement, indicating a structural shift toward high-value projects and deeper cost control. ROE 15.8% is top-tier in the industry, reflecting improved capital efficiency. Revenue composition shows a rapid 86.3% increase in Southeast Asia, advancing geographic diversification that concurrently reduces risk and expands growth opportunities.
Room to improve cash generation: Operating Cash Flow ¥297.2B (YoY +405.1%) rose substantially, but Operating Cash Flow/Net Income 0.86x and OCF/EBITDA 0.58x indicate mid-level conversion efficiency, with trade receivables increase -¥147.0B and advances decrease -¥31.6B as restraints. If working capital optimization (shortening billing terms, securing advances) is achieved, Operating Cash Flow could exceed ¥400B, materially improving FCF coverage and shareholder return capacity. Enhanced quantitative disclosure of backlog and greater transparency in cash management are key items to watch.
Balance between growth investment and financial capacity: Goodwill ¥26.96B (+90.0%) increased from acquisition of a Thai subsidiary, with Goodwill/EBITDA 0.05x indicating high impairment resilience. Investment securities ¥641.7B (+48.5%) reflect strategic investments and an expanded portfolio of deployable assets, introducing unrealized gains volatility risk, but Equity Ratio 56.3% provides leeway for long-term return-seeking. Capital expenditures are 1.7x depreciation and growth-oriented without signs of overinvestment; resource allocation is expected to continue toward growth areas such as Southeast Asia and data centers.
This report is a financial analysis document automatically generated by AI from XBRL financial statement disclosures. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the Company based on public financial statements. Investment decisions are your own responsibility; consult a professional advisor as needed before making investment decisions.
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