These are mechanically computed values based on a residual income model. They are not a forecast of market prices or a recommendation of any investment action, and do not predict or guarantee future share prices. Historical values are computed retrospectively using current guidance-achievement statistics.
| Metric | Current Period | Same Period Prior Year | YoY |
|---|---|---|---|
| Revenue | ¥412.0B | ¥334.5B | +23.2% |
| Operating Income | ¥11.3B | ¥11.2B | +1.5% |
| Ordinary Income | ¥10.8B | ¥10.7B | +0.7% |
| Net Income | ¥4.2B | ¥7.3B | -42.8% |
| ROE | 0.3% | 0.5% | - |
During the quarter, Revenue increased by double digits, while Net Income declined significantly due to higher interest expenses and the recognition of extraordinary losses, resulting in earnings characterized by both revenue growth and a decline in final profit. Revenue was ¥412.0B (+23.2% YoY), Operating Income was ¥11.3B (+1.5%), Ordinary Income was ¥10.8B (+0.7%), and Net Income attributable to owners of the parent was ¥4.2B (-42.8%). The increase in Revenue was driven by growth in the Bridge Business and Engineering Business. Although the gross profit margin improved to 13.3% (13.0% in the prior year), the Operating Income margin declined to 2.8% (3.3% in the prior year) due to higher SG&A expenses. In addition, higher interest payments (¥0.9B in the prior year → ¥2.5B) and the recognition of ¥4.8B in extraordinary losses weighed on Net Income.
【Revenue】Revenue of ¥412.0B (+23.2% YoY) was achieved as the Bridge Business, at ¥222.5B (+19.6%, 54.0% of company-wide Revenue), the System Construction Business, at ¥110.3B (+11.4%, 26.8%), and the Engineering Business, at ¥64.8B (+76.4%, 15.7%), all recorded revenue growth. In particular, the Engineering Business showed remarkable growth, with a sharp recovery from the prior year’s low level pushing up the overall revenue growth rate.
【Profit and Loss】The gross profit margin improved to 13.3%, up +0.3pt from 13.0% in the prior year. However, the SG&A ratio rose to 10.6%, up +0.9pt from 9.6%, and the increase in costs could not be fully absorbed, causing the Operating Income margin to decline by -0.6pt to 2.8% (3.3% in the prior year). Ordinary Income was nearly flat at +0.7% YoY, as non-operating income (including ¥2.0B in dividend income) was offset by non-operating expenses (including ¥2.5B in interest payments). Meanwhile, the recognition of ¥4.8B in extraordinary losses compressed Profit Before Tax to ¥6.1B, and Net Income fell to ¥4.2B (-42.8% YoY). Despite the increase in Revenue, final profit declined substantially, and the results can be characterized as revenue growth accompanied by lower profit.
The Engineering Business was the segment with the largest revenue growth, increasing substantially to ¥64.8B (+76.4% YoY). In terms of profitability, the highly profitable System Construction Business (Revenue of ¥110.3B, Operating Income of ¥10.2B, and a profit margin of 9.3%) was the largest contributor to company-wide profit, while the Bridge Business, which has the largest Revenue composition, experienced a significant deterioration in profitability.
There is a substantial disparity in profit margins among segments (approximately 1.6%–9.3%), and the deterioration in profitability of the Bridge Business, which has the largest Revenue composition, structurally weighs down the company-wide Operating Income margin of 2.8%. Adjustments for company-wide expenses and other items totaled -¥8.6B, expanding from -¥5.8B in the prior year. Higher costs in administrative functions were also a factor pressuring profit.
【Profitability】The Operating Income margin was 2.8%, down from 3.3% in the same period of the prior year, while the Net Income margin also declined to 1.0% from 2.2%. ROE remained at 0.3%. Despite the gross profit margin improving to 13.3% (+0.3pt from 13.0% in the prior year), the SG&A ratio expanded to 10.6% (+0.9pt from 9.6%), which was the primary cause of the decline in profitability.【Cash Quality】Cash and deposits increased by +21.9% from the end of the previous fiscal year to ¥542.3B, while accounts receivable from completed construction contracts declined to ¥1,059.1B (-11.7% from the end of the previous fiscal year), and advances received on construction contracts in progress increased to ¥84.6B (+13.8%). Progress in the collection of construction receivables and the accumulation of advance payments supported liquidity.【Investment Efficiency】Total asset turnover remained low at 0.164x (quarterly basis, not annualized), indicating a low level of profit-generation efficiency relative to total assets of ¥2,507.1B.【Financial Soundness】The Equity Ratio remained nearly flat at 52.7%, compared with 52.9% at the end of the previous fiscal year. The current ratio was 190.7% (current assets of ¥1,717.0B / current liabilities of ¥900.6B), indicating ample liquidity. Meanwhile, total interest-bearing debt was approximately ¥569.1B, of which approximately ¥443B, or 77.8% of the total, is due for repayment or redemption within one year, indicating a high degree of short-term concentration. As interest payments increased (¥0.9B in the prior year → ¥2.5B), the interest coverage ratio declined from 12.6x to 4.5x, requiring monitoring of trends in financial costs.
Cash and deposits increased by +¥97.4B (+21.9%) from the end of the previous fiscal year to ¥542.3B, further strengthening liquidity. A major source of cash generation was the decline in accounts receivable from completed construction contracts to ¥1,059.1B, down -¥139.8B (-11.7%) from ¥1,198.9B at the end of the previous fiscal year, indicating progress in the collection of construction receivables. Meanwhile, advances received on construction contracts in progress (advance payments) increased by +13.8% to ¥84.6B from ¥74.3B at the end of the previous fiscal year, providing support through cash inflows from projects secured in advance. Short-term borrowings decreased by -¥19.0B (-7.0%) to ¥252.0B from ¥271.0B at the end of the previous fiscal year, indicating a reduction in short-term funding needs. These movements suggest that working capital improved during the quarter through the collection of completed-project receivables and the accumulation of advance payments, contributing to the increase in cash balances.
Extraordinary losses of ¥4.8B were recognized against Ordinary Income of ¥10.8B, compressing Profit Before Tax to ¥6.1B. Extraordinary losses amounted to 113% of Net Income of ¥4.2B, indicating that final profit for the period was strongly affected by temporary factors. Non-operating income totaled ¥2.9B, including ¥2.0B in dividend income, while non-operating expenses totaled ¥3.4B, including ¥2.5B in interest payments, resulting in an excess of expenses of ¥0.5B. Interest payments increased by 182% from ¥0.9B in the prior year to ¥2.5B, with the higher interest burden contributing to pressure on profitability at the Ordinary Income level. Comprehensive Income was ¥8.3B, exceeding Net Income of ¥4.2B, reflecting the addition of valuation gains primarily from ¥4.1B in valuation differences on securities and resulting in a divergence between Net Income and Comprehensive Income. The same structure was observed in the same period of the prior year (Comprehensive Income of ¥19.1B versus Net Income of ¥7.3B). The potential for changes in the market value of held investment securities to cause earnings volatility is therefore a point to note.
Progress against the full-year company plan was 20.8% for Revenue, 9.5% for Operating Income, 9.6% for Ordinary Income, and 5.1% for Net Income. Each figure started below the simple one-quarter benchmark of 25%. The lag in profit-related indicators was particularly notable. The full-year Operating Income forecast of ¥120.0B (-11.1% YoY) and Ordinary Income forecast of ¥112.0B (-17.7% YoY) both envisage lower profit than in the prior fiscal year, differing in direction from the revenue growth and largely flat profit trend in the current quarter. As of the current quarter, the company had not revised its earnings forecast or dividend forecast, and the full-year plan appears to be weighted toward the second half. Improvement in the profitability of the Bridge Business, together with the normalization of interest costs and extraordinary gains and losses, will be key factors determining profit recovery in the second half.
The full-year dividend forecast is ¥65 per share, representing a planned increase of +¥5 (+8.3%) from the previous fiscal year’s actual dividend of ¥60. The Payout Ratio against forecast EPS of ¥209.62 is approximately 31.0% (¥65 ÷ ¥209.62), which can be considered a reasonable level. Given the financial base of ¥542.3B in cash and deposits and an Equity Ratio of 52.7%, the company has a reasonable foundation supporting its ability to pay dividends. As of the current quarter, the dividend forecast had not been revised.
Deterioration in Bridge Business profitability: Against Revenue of ¥222.5B (+19.6%), Operating Income was ¥3.7B (-49.0%), and the profit margin declined to 1.6% (-2.3pt from approximately 3.9% in the prior year). The deterioration in profitability of the largest segment, which accounts for 54.0% of company-wide Revenue, is the primary factor weighing down the company-wide Operating Income margin of 2.8%.
Higher interest burden and short-term concentration of interest-bearing debt: Interest payments increased from ¥0.9B in the prior year to ¥2.5B, and interest coverage against EBIT declined from 12.6x to 4.5x. Of total interest-bearing debt of approximately ¥569.1B, approximately ¥443B, or 77.8% of the total, is due for repayment or redemption within one year. An increase in funding costs during a period of rising interest rates could affect financial costs.
Level of accounts receivable from completed construction contracts: Although accounts receivable from completed construction contracts declined slightly to ¥1,059.1B (-11.7% from the end of the previous fiscal year), the balance represents 42.2% of total assets of ¥2,507.1B. The timing of cash collections may fluctuate depending on construction progress and inspection and acceptance schedules.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Income Margin | 2.8% | 8.8% (4.4%–14.3%) | -6.1pt |
| Net Income Margin | 1.0% | 7.3% (3.3%–10.6%) | -6.2pt |
Both the Operating Income margin and Net Income margin are substantially below the industry median, placing profitability at a low level within the industry.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 23.2% | 6.6% (-0.3%–14.8%) | +16.6pt |
The Revenue growth rate substantially exceeds the industry median, indicating a high level of revenue growth within the industry.
Source: Compiled by the Company
Revenue increased by +23.2%, while Operating Income rose by only +1.5%. Although the gross profit margin improved by +0.3pt, the SG&A ratio increased by +0.9pt, preventing the company from fully absorbing higher costs and causing the Operating Income margin to decline by -0.6pt to 2.8%. The divergence between the revenue growth trend and profit margin trend is an important point for evaluating the cost structure and progress in passing through higher costs.
While Ordinary Income was nearly flat (+0.7%), Net Income declined to ¥4.2B (-42.8%) due to the recognition of ¥4.8B in extraordinary losses. Extraordinary losses amounted to 113% of Net Income, indicating that final profit for the quarter was strongly affected by temporary factors.
Progress against the full-year plan was 20.8% for Revenue, compared with 9.5% for Operating Income and 5.1% for Net Income, with profit-related indicators lagging. The full-year plan itself also assumes lower Operating Income and Ordinary Income than in the prior fiscal year. Profitability trends in the Bridge Business during the second half, as well as the occurrence of interest costs and extraordinary gains and losses, will be key points in evaluating progress toward the full-year plan.
This is a mechanically calculated reference range based solely on publicly disclosed data using a residual income model (Ohlson-type model with an explicit 5-year fade period). It is not a forecast of the market share price or a recommendation of any specific investment action.
| Scenario | Theoretical Share Price |
|---|---|
| bear | ¥3,037 |
| base | ¥3,104 |
| bull | ¥3,152 |
| Calculation Assumption | Value |
|---|---|
| Book Value Per Share (BPS) | ¥3,354 |
| Adjusted Forecast EPS | ¥234.1 |
| Cost of Equity r | 9.65% (10-year government bond 2.65% + equity risk premium 6.00% + size premium 1.00%) |
| Persistence Coefficient of Residual Income ω / Explicit Forecast Period | 0.62 / 5 years |
| Assumed Payout Ratio | 31.0% |
| Forecast EPS Confidence Adjustment | ×1.117 (based on the actual guidance achievement rate of companies in the same industry) |
| Implied PBR / PER |
Sensitivity: ¥3,018–¥3,194 at ±1% for the cost of equity, and ¥3,095–¥3,109 at ±0.1 for ω.
Notes:
(Calculation model: Residual income model / Interest rate reference month: 2026-06 / This value does not forecast or guarantee the future share price)
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. The industry benchmarks are reference information compiled by the Company based on publicly disclosed earnings data. Investment decisions should be made at your own responsibility, after consulting with a professional where necessary.
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| 0.93x / 13.3x |