| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue | ¥195.1B | ¥174.3B | +11.9% |
| Operating Income | ¥17.8B | ¥14.0B | +27.2% |
| Ordinary Income | ¥20.4B | ¥14.4B | +42.0% |
| Net Income | ¥14.7B | ¥4.5B | +225.1% |
| ROE | 3.7% | 1.1% | - |
For the cumulative period of Q3 of FY ending May 2026, Revenue was ¥195.1B (vs prior year +¥20.8B +11.9%), Operating Income was ¥17.8B (vs prior year +¥3.8B +27.2%), Ordinary Income was ¥20.4B (vs prior year +¥6.0B +42.0%), and Net Income was ¥14.7B (vs prior year +¥10.2B +225.1%), resulting in year-on-year increases in both sales and profits. Operating margin improved to 9.1% (up +1.1pt from 8.0% prior year), and net margin improved to 7.5% (up +4.9pt from 2.6% prior year), indicating a substantial improvement in profitability. The core Construction Machinery Business led performance with Revenue of ¥140.7B (+19.4%) and Segment Profit of ¥28.3B (+29.2%). Non-operating items contributed to the increase at the ordinary-income level, with non-operating income of ¥3.6B including foreign exchange gains of ¥0.9B. At the net-income level, although Special Losses of ¥8.5B were booked, the strong earnings power at the operating and ordinary levels resulted in a large YoY increase of +225.1%. Progress against the Full Year forecast stands at 70.2% for Revenue and 61.3% for Operating Income, reflecting a plan skewed toward Q4.
[Revenue] Revenue reached ¥195.1B (YoY +11.9%), achieving double-digit growth. By segment, the Construction Machinery Business expanded to ¥140.7B (+19.4%), driving consolidated revenue growth, while the Piling Work Business (圧入工事事業) was ¥63.1B (+2.1%), remaining only slightly up. By region, Japan was ¥162.9B and Other regions ¥32.2B, making the overseas ratio 16.5%. Gross margin slightly declined to 38.3% (down -0.8pt from 39.1% prior year), but SG&A ratio improved significantly to 29.1% (down -1.9pt from 31.0%), reflecting efficiency gains.
[Profitability] Operating Income was ¥17.8B (+27.2%), with an operating margin of 9.1% (up +1.1pt from 8.0% prior year), a marked improvement. Non-operating income totaled ¥3.6B, including interest income ¥0.5B, dividend income ¥0.2B, and foreign exchange gains ¥0.9B, while non-operating expenses were ¥1.0B (including fees paid ¥0.6B and foreign exchange losses ¥1.1B), resulting in net non-operating income of ¥2.6B. Consequently, Ordinary Income grew to ¥20.4B (+42.0%), outpacing operating-level growth. After booking Special Losses of ¥8.5B, pretax income was ¥20.4B, and after deducting corporate taxes etc. of ¥5.8B (effective tax rate 28.2%), Net Income amounted to ¥14.7B (+225.1%). Net margin improved to 7.5% (up +4.9pt from 2.6%), culminating in higher revenue and profit.
The Construction Machinery Business reported Revenue ¥140.7B (YoY +19.4%), Segment Profit ¥28.3B (+29.2%), and Segment Profit Margin 20.1%, delivering high profitability and leading the company. Revenue increased from ¥118.8B prior year, and although the margin slightly declined from 21.9% prior year, it remains at a high level. The Piling Work Business recorded Revenue ¥63.1B (+2.1%), Segment Profit ¥7.2B (-21.7%), and Segment Profit Margin 11.3%, representing revenue increase but profit decline. The prior year segment profit was ¥9.2B with margin 14.8%, a margin decline of -3.5pt. Corporate unallocated expenses were ¥18.3B (¥17.7B prior year), a slight increase; deducting these from total segment profits of ¥35.4B yields Operating Income of ¥17.8B.
[Profitability] Operating margin 9.1% (up +1.1pt from 8.0% prior year) and Net margin 7.5% (up +4.9pt from 2.6% prior year) showed marked improvement. Gross margin was 38.3% (down -0.8pt from 39.1% prior year), but efficiency improvements in SG&A to 29.1% (down -1.9pt from 31.0%) enhanced operating-level profitability. ROE was 3.7%, still low but improved from 1.1% prior year. [Cash Quality] Days Sales Outstanding (DSO) is 67 days (Accounts receivable & electronic recorded monetary claims total ¥79.2B ÷ daily sales ¥0.72B × 365/270), Days Inventory Outstanding (DIO) is 242 days (Inventory total ¥83.1B ÷ daily cost of sales ¥0.45B × 365/270), Days Payable Outstanding (DPO) is 45 days, and the Cash Conversion Cycle (CCC) is elongated at 264 days. [Investment Efficiency] Total Asset Turnover is 0.42x (Revenue ¥195.1B ÷ Total Assets ¥466.2B), and ROIC is estimated at 3.9% (Operating Income ¥17.8B × (1-0.282) ÷ Invested Capital ¥327.8B), indicating low capital efficiency. [Financial Soundness] Equity Ratio is 84.0% (84.2% prior year), current ratio 309.5% (Current Assets ¥216.5B ÷ Current Liabilities ¥70.0B), interest-bearing debt ¥5.6B (short-term borrowings ¥1.6B + long-term borrowings ¥4.0B) against cash ¥71.4B yields net cash effectively ¥65.8B, and Interest Coverage is 296x (Operating Income ¥17.8B ÷ Interest Expense ¥0.06B), indicating extremely high financial safety.
Although a cash flow statement disclosure is not provided, cash movements are analyzed from the balance sheet changes. Cash and deposits decreased to ¥71.4B (down ¥14.5B from ¥85.9B prior year). Working capital movements show receivables & electronic recorded monetary claims totaled ¥79.2B (down ¥16.1B from ¥95.3B prior year, -16.9%), indicating improved collection, while inventory totaled ¥83.1B (up ¥5.1B from ¥78.0B prior year, +6.5%). Inventory breakdown: finished goods ¥35.1B (down ¥8.8B), raw materials ¥31.7B (up ¥3.6B), work-in-progress ¥13.2B (up ¥5.4B), with WIP up +70.0% substantially. Accounts payable increased to ¥14.7B (up ¥4.3B from ¥10.4B prior year, +41.3%), and contract liabilities (advance receipts) decreased to ¥26.1B (down ¥2.8B from ¥28.9B prior year). Investment securities increased to ¥28.5B (up ¥6.3B from ¥22.2B prior year, +28.5%), and tangible fixed assets were ¥194.1B (up ¥5.5B from ¥188.6B prior year) reflecting capital expenditure. Interest-bearing debt was significantly reduced to ¥5.6B (down ¥4.6B from ¥10.2B prior year, -45.1%), further strengthening the financial position. Overall, while receivables collection and debt reduction progressed, increases in WIP and reduced cash suggest timing mismatches in cash conversion associated with project progress.
Operating Income was ¥17.8B and Ordinary Income ¥20.4B, with the ¥2.6B difference attributable to net non-operating income, which is limited at 1.3% of Revenue. Non-operating income composition was interest income ¥0.5B, dividend income ¥0.2B, foreign exchange gains ¥0.9B, and other ¥0.8B, totaling ¥3.6B; non-operating expenses totaled ¥1.0B (including foreign exchange losses ¥1.1B and fees paid ¥0.6B), giving a net ¥2.6B. Foreign exchange effects are mixed with small net impact and limited influence on operating performance. Special Losses of ¥8.5B were temporary, including asset retirement loss of ¥0.4B. The reduction from Ordinary Income ¥20.4B to Net Income ¥14.7B (a ¥5.7B decrease) was mainly driven by Special Losses ¥8.5B and corporate taxes etc. ¥5.8B (effective tax rate 28.2%), indicating strong ordinary-level earning power. Comprehensive Income was ¥23.4B (Net Income ¥14.7B + Other Comprehensive Income ¥8.7B); Other Comprehensive Income breakdown: foreign currency translation adjustment ¥5.1B, valuation difference on available-for-sale securities ¥3.6B, and retirement benefit adjustments -¥0.0B, with valuation gains on FX and investment securities contributing. Comprehensive Income exceeds Net Income by ¥8.7B, reflecting accumulated unrealized gains.
The Full Year forecast is unchanged: Revenue ¥278.0B (vs prior year +5.6%), Operating Income ¥29.0B (+13.0%), Ordinary Income ¥30.5B (+11.6%), Net Income ¥22.0B, EPS ¥86.73. Progress through the Q3 cumulative period is 70.2% for Revenue, 61.3% for Operating Income, 67.0% for Ordinary Income, and 66.6% for Net Income. Compared to a standard Q3 progress rate of 75%, Revenue is -4.8pt and Operating Income is -13.7pt behind. The plan assumes Q4 Revenue of ¥82.9B (vs prior-year same quarter +2.8%) and Operating Income of ¥11.2B (vs prior-year same quarter -14.5%), reflecting a Q4-heavy recognition tied to large deliveries and construction progress. The +70.0% rise in WIP and contract liabilities of ¥26.1B suggest recognition of completion and deliveries in Q4. Achieving the Full Year forecast therefore hinges on executing Q4 progress as planned.
An interim dividend of ¥27 per share has been paid, and the dividend forecast is unchanged at ¥27 per share for the Full Year (including year-end dividend). Using Net Income ¥14.7B and weighted-average shares outstanding during the period of 25,646 thousand shares (issued shares 27,075 thousand less treasury stock 1,709 thousand), EPS is ¥57.18. The payout ratio is 47.2% (interim dividend ¥27 ÷ EPS ¥57.18), a reasonable level. Versus Full Year forecast EPS ¥86.73, the payout ratio is 31.1% (dividend ¥27 ÷ EPS ¥86.73). Retained earnings are ¥213.8B, cash ¥71.4B, and net cash effectively ¥65.8B, indicating ample dividend resources and high sustainability. No share repurchase was disclosed; shareholder returns are limited to dividends.
Working capital stagnation risk: Inventory DIO 242 days and CCC 264 days are elongated, and WIP surged +70.0% YoY. Timing mismatches in project cash cycles could delay cash conversion; if Q4 completions and deliveries slip, there is a risk of missing Full Year forecasts and further build-up of working capital.
Polarization of segment profitability: The Piling Work Business saw Segment Profit decline -21.7% YoY and segment margin deteriorate to 11.3% (from 14.8% prior year). Continued adverse project mix or cost-management issues could exert downward pressure on consolidated profitability.
Low capital efficiency: ROE 3.7% and estimated ROIC 3.9% indicate low capital efficiency, and Total Asset Turnover 0.42x shows slow asset efficiency improvement. Prolonged working capital retention and conservative financial leverage (Equity Ratio 84.0%) suppress capital productivity; without asset reduction or capital policy adjustments, value creation for shareholders may be limited.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 9.1% | 8.9% (5.4%–12.7%) | +0.3pt |
| Net Margin | 7.5% | 6.5% (3.3%–9.4%) | +1.1pt |
Both operating margin and net margin exceed industry medians, placing profitability in the upper ranks within manufacturing.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 11.9% | 2.8% (-1.5%–8.8%) | +9.1pt |
Revenue growth substantially outpaces the industry median, indicating standout growth among manufacturers.
※ Source: Company aggregation
High profitability of Construction Machinery Business and room for improvement in Piling Work Business: The Construction Machinery Business maintains a high segment margin at 20.1% and leads the company, while the Piling Work Business margin fell to 11.3% (from 14.8%). Improving project mix and cost management in the construction business could further raise consolidated profitability.
Q4 skew and normalization of working capital: Achieving the Full Year forecast requires Q4 recognition of Revenue ¥82.9B and Operating Income ¥11.2B. The +70.0% accumulation of WIP and contract liabilities ¥26.1B point to large Q4 deliveries. If progress and cash realization occur as planned, normalization of working capital and cash flow improvement could become an inflection point for valuation.
This report is an AI-generated earnings analysis document created by analyzing XBRL financial statement data. It is not a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on public financial data. Investment decisions should be made at your own responsibility, and if necessary, consult a professional advisor.