| 指標 | 当期 | 前年同期 | YoY |
|---|---|---|---|
| 売上高 | ¥2531.2B | ¥2719.4B | -6.9% |
| 営業利益 | ¥47.4B | ¥68.1B | -30.4% |
| 持分法投資損益 | - | - | - |
| 経常利益 | ¥47.1B | ¥69.0B | -31.7% |
| 純利益 | ¥-33.4B | ¥39.1B | -17.8% |
| ROE | -3.6% | 4.0% | - |
FY2026 results: Revenue ¥2531.2B (YoY -¥188.2B -6.9%), Operating Income ¥47.4B (YoY -¥20.7B -30.4%), Ordinary Income ¥47.1B (YoY -¥21.9B -31.7%), Net Income attributable to owners of the parent -¥33.4B (YoY -¥72.5B -185.3%). Revenue declined for the second consecutive year; Operating Income reversed from prior-year growth to a decline; bottom-line turned to a loss due to a ¥69.2B impairment loss on fixed assets in the Kyushu & Chugoku segment. Operating margin was 1.9%, down 0.6pt from 2.5% a year earlier. Gross profit margin improved 0.4pt to 10.4% from 9.9%, but SG&A ratio rose to 8.5%, deteriorating profitability.
【Revenue】Revenue was ¥2531.2B, a YoY decline of -6.9%. By segment, Kyushu & Chugoku was ¥1399.2B (-9.0%) and the largest contributor to the decline; Kansai & Chukyo was ¥622.3B (-8.9%); Kanto & Tohoku was ¥545.9B (+3.1%), the only segment with revenue growth. By product, steel & building materials sales decreased to ¥1974.7B, and construction contracts were ¥551.3B, almost flat YoY (-¥0.7B). Kyushu & Chugoku accounted for 55.3% of revenue, creating a geographic concentration that drives consolidated revenue trends.
【Profitability】Gross profit was ¥262.9B (gross margin 10.4%), up 0.4pt YoY. SG&A was ¥215.6B, up ¥13.3B YoY, and the SG&A ratio rose to 8.5% from 7.4% (+1.1pt). As a result, Operating Income was ¥47.4B (Operating margin 1.9%), a large YoY decline of -30.4%. Ordinary Income was ¥47.1B, roughly in line with Operating Income. Non-operating income of ¥8.8B (interest income ¥0.2B, dividend income ¥1.0B, etc.) was offset by non-operating expenses of ¥9.1B including interest expense ¥4.0B. In extraordinary items, an impairment loss of ¥69.2B on fixed assets in the Kyushu & Chugoku segment was recorded, resulting in Pre-tax Income of -¥22.1B. Income taxes resulted in a tax refund of -¥0.9B, and after deducting non-controlling interests of ¥1.0B, Net Income attributable to owners of the parent was -¥33.4B. The impairment is a one-off factor, but the operating-stage profit decline and segment concentration indicate structural issues in profitability. Conclusion: reduced revenue, reduced profit, and a final loss.
Kyushu & Chugoku segment: Revenue ¥1399.2B (YoY -9.0%), Operating Income ¥27.97B (YoY -32.2%), margin 2.0%. It is the largest segment at 55.3% of revenue and the primary segment where the ¥69.2B impairment loss was recorded. Kansai & Chukyo segment: Revenue ¥622.3B (-8.9%), Operating Income ¥10.0B (-3.5%), margin 1.6%. Revenue mix 24.6%; decline in profit was relatively modest. Kanto & Tohoku segment: Revenue ¥545.9B (+3.1%), Operating Income ¥10.1B (-40.3%), margin 1.9%. Revenue mix 21.6%; the only revenue-growing segment but showed significant margin deterioration, resulting in revenue growth with profit decline. All segments’ operating margins hovered around 2%, and the Kyushu & Chugoku impairment determined the consolidated final loss.
【Profitability】Operating margin was 1.9%, down 0.6pt from 2.5% a year earlier. Gross margin was 10.4%, up 0.4pt from 9.9%, but SG&A ratio rose to 8.5%, reversing operating leverage. ROE was -3.6%, with Net Profit Margin -1.3%, Total Asset Turnover 1.29x, and Financial Leverage 2.09x used in the calculation. The net loss is largely due to the one-time impairment of ¥69.2B, though operating-stage profitability deterioration underlies the result. 【Cash Quality】Operating Cash Flow (OCF) ¥104.0B is 3.1x the net loss of -¥33.4B, aided by non-cash charges: Depreciation ¥49.1B and impairment ¥69.2B, and improvements in working capital (accounts receivable decrease ¥36.5B, inventories decrease ¥19.7B). OCF/EBITDA ratio was 1.08x (EBITDA = Operating Income ¥47.4B + Depreciation ¥49.1B = ¥96.5B), indicating good cash conversion. Accrual ratio was -6.4% ((OCF - Net Income)/Total Assets), indicating high cash contribution. 【Investment Efficiency】Capital expenditures were ¥71.1B, 1.45x depreciation ¥49.1B, skewed toward renewal and growth investments. Free Cash Flow was ¥13.3B, below total shareholder returns of ¥27.2B (dividends ¥17.2B + buybacks ¥10.0B), meaning shareholder returns exceeded internally generated cash. 【Financial Soundness】Equity Ratio was 47.8%, down 0.5pt from 48.3% a year earlier. Current Ratio 131.7%, Quick Ratio 98.3% — short-term liquidity is borderline. Interest-bearing debt totaled ¥571.5B (short-term borrowings ¥378.1B, long-term borrowings ¥193.4B), with a high short-term debt share of 66.2%. Compared with cash & deposits ¥63.6B, cash/short-term debt ratio is 0.17x and refinancing risk exists. Debt/EBITDA was high at 5.92x, but interest coverage (EBIT / interest expense) was 11.9x, indicating near-term interest payment capacity is secured.
Operating Cash Flow was ¥104.0B, up 80.7% from ¥57.6B a year earlier. Operating cash flow before working capital changes was ¥116.5B, with large contributions from non-cash charges: Depreciation ¥49.1B and impairment ¥69.2B. After deducting corporate taxes paid ¥14.0B, solid cash generation persisted. Working capital contributed via inventory decrease ¥19.7B and accounts receivable decrease ¥36.5B, while a decrease in accounts payable ¥66.1B was a cash outflow. Investing Cash Flow was -¥90.7B, mainly driven by capital expenditures of ¥71.1B. Investment in intangible assets of ¥9.2B also continued, indicating ongoing growth/efficiency investments. Free Cash Flow was ¥13.3B, turning positive from -¥98.9B in the prior year. Financing Cash Flow was a net inflow of ¥5.9B: long-term borrowings raised ¥64.0B, repayments of long-term borrowings ¥12.7B, net increase in short-term borrowings ¥45.8B, dividends ¥17.2B, and share buybacks ¥10.0B were executed. Cash and cash equivalents at period-end were ¥61.1B, up ¥19.2B from ¥41.9B at period-beginning, supported by improved OCF and working capital release.
Ordinary Income was ¥47.1B while Net Income attributable to owners of the parent was -¥33.4B; the primary divergence was the extraordinary impairment loss of ¥69.2B (fixed assets in Kyushu & Chugoku). The one-off factor equates to 207% of Net Income, causing a major divergence between ordinary-stage and final results. Non-operating income ¥8.8B (0.35% of revenue) comprised dividend income ¥1.0B, gain on sale of investment securities ¥1.1B, interest income ¥0.2B, etc., well below 5% of revenue and indicating low dependence on non-core activities. Non-operating expenses ¥9.1B were mainly interest expense ¥4.0B, showing limited financial cost burden. OCF ¥104.0B exceeded EBITDA ¥96.5B, OCF/EBITDA 1.08x, and accrual ratio -6.4%, indicating good cash conversion quality and solid core cash generation. Comprehensive income was -¥17.8B; attributable to owners of the parent was -¥18.8B. Other comprehensive income movements were valuation difference on securities +¥4.7B, deferred hedge gains +¥0.2B, and retirement benefit adjustments -¥1.5B — minor items with small divergence between Net Income and Comprehensive Income.
Full Year guidance: Revenue ¥2746.0B (YoY +8.5%), Operating Income ¥63.0B (+32.9%), Ordinary Income ¥62.0B (+31.6%), Net Income attributable to owners of the parent ¥30.0B (return to profit), EPS ¥167.8, dividend ¥34. The guidance assumes removal of this period’s ¥69.2B impairment and operating-stage profitability improvement (Operating margin recovery to around 2.3%). Revenue growth of +8.5% factors in recovery in steel & building materials demand and smoothing of project progress; Operating Income increase of +32.9% assumes containment of SG&A growth and maintenance of gross margins. Forecast dividend ¥34 equals the interim dividend this term; payout ratio (on forecast Net Income) is about 20.3%, a conservative level. Key to achievement: stabilization of Kyushu & Chugoku segment profitability, maintenance of inventory/accounts receivable efficiency, and containment of SG&A growth.
Dividends: interim ¥34, year-end ¥35, annual ¥69 were paid. Given Net Income attributable to owners of the parent was a loss of -¥33.4B, payout ratio is negative on a calculation basis, but dividends were maintained at prior-year levels. Share buybacks of ¥10.0B were conducted; total shareholder returns (dividends ¥17.2B + buybacks ¥10.0B) were ¥27.2B. With Free Cash Flow ¥13.3B, total returns were 2.04x internally generated cash, funded by working capital release and borrowings. Next fiscal year plans dividend ¥34, and with forecast EPS ¥167.8, payout ratio is 20.3%, a conservative level. This term’s loss is mainly due to a one-off impairment; assuming a return to profitability and maintenance of operating cash flow next year, dividend sustainability is expected to improve.
Geographic concentration and asset impairment risk: Kyushu & Chugoku accounts for 55.3% of revenue and recorded an impairment loss of ¥69.2B. Economic conditions, construction demand, and disaster risk in the region have large impacts; additional impairment risk exists if fixed-asset profitability declines.
Short-term liquidity and high leverage: Short-term borrowings ¥378.1B comprise 66.2% of interest-bearing debt, and compared with cash ¥63.6B, cash/short-term debt ratio is only 0.17x. Debt/EBITDA 5.92x indicates high leverage, raising refinancing risk if interest rates rise or credit conditions deteriorate.
Low-margin structure and SG&A inflation: Operating margin 1.9% and gross margin 10.4% indicate a low-margin, high-volume model. SG&A increased ¥13.3B YoY, raising SG&A ratio by 1.1pt. Limited ability to absorb fluctuations in steel prices and logistics costs means that as fixed costs rise, operating leverage will worsen.
Profitability & Returns
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| 営業利益率 | 1.9% | 3.4% (1.4%–5.0%) | -1.5pt |
| 純利益率 | -1.3% | 2.3% (1.0%–4.6%) | -3.6pt |
Profitability lags the industry median: Operating margin -1.5pt, Net margin -3.6pt. Even excluding the one-off impairment, operating-stage profitability is below industry average.
Growth & Capital Efficiency
| 指標 | 自社 | 中央値 (IQR) | Delta |
|---|---|---|---|
| 売上高成長率（前年比） | -6.9% | 5.9% (0.4%–10.7%) | -12.8pt |
Revenue growth lags the industry median by -12.8pt; the company is in a revenue decline while the industry overall shows growth.
※Source: Company aggregation
This fiscal year’s net loss was mainly driven by a one-time impairment of ¥69.2B, while the ordinary-stage result remained profitable and Operating Cash Flow was solid at ¥104.0B. Next year’s guidance assumes a return to profit and recovery of Operating margin to around 2.3%, but achieving this requires stabilization of Kyushu & Chugoku profitability and containment of SG&A growth. Convergence of Operating margin toward the industry median of 3.4% or improvement in regional/product mix would be catalysts for re-rating.
Structural short-term liquidity vulnerability has become apparent: short-term borrowings ¥378.1B (66.2% of interest-bearing debt) versus cash ¥63.6B yields a low cash/short-term debt ratio of 0.17x. Under high leverage (Debt/EBITDA 5.92x), refinancing risk is elevated if interest rates or credit conditions worsen. Priorities include rebalancing short- and long-term debt and increasing cash buffers; monitor next year’s OCF maintenance, inventory and receivables turnover. Capex is 1.45x depreciation, an aggressive level; improvement in asset utilization and margin recovery will be key to investment efficiency.
This report was auto-generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the company from public financial statements. Investment decisions are your own responsibility; please consult a professional advisor as appropriate.