| Metric | This Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥1156.8B | ¥1115.5B | +3.7% |
| Operating Income | ¥80.1B | ¥68.5B | +16.9% |
| Equity-method Investment Income (Loss) | ¥2.1B | ¥-2.2B | +196.8% |
| Ordinary Income | ¥87.1B | ¥67.9B | +28.2% |
| Net Income | ¥59.6B | ¥45.4B | +31.2% |
| ROE | 7.9% | 6.9% | - |
For the full year ended March 2026, Revenue was ¥1,156.8B (YoY +¥41.3B +3.7%), Operating Income was ¥80.1B (YoY +¥11.6B +16.9%), Ordinary Income was ¥87.1B (YoY +¥19.1B +28.2%), and Net Income attributable to owners of the parent was ¥59.6B (YoY +¥14.2B +31.2%), marking both revenue and profit growth. Operating margin improved to 6.9% (prior year 6.1%) (+0.8pt), supported by gross margin expansion to 22.9% (prior year 20.9%) (+2.0pt). Foreign exchange gains of ¥2.0B, a turnaround in equity-method investment income (equivalent to +¥4.3B), together with bargain purchase gain of ¥4.0B and gains on sales of available-for-sale securities of ¥2.2B provided downside support to profits.
[Revenue] Revenue was ¥1,156.8B (+3.7%), with the Heavy Temporary Facilities Business at ¥1,021.2B (+3.9%) and the Construction Machinery Business at ¥135.6B (+1.3%), both contributing to revenue growth. The Heavy Temporary Facilities Business accounted for 88.3% of revenue, with steady rental demand and penetration of price revisions driving the increase. The Construction Machinery Business maintained sales through a slight rise in rental utilization.
[Profitability] Cost of sales was ¥892.2B (cost of sales ratio 77.1%), resulting in gross profit of ¥264.6B (gross margin 22.9%), an improvement of +2.0pt YoY. SG&A was ¥184.5B (SG&A ratio 16.0%, up +1.2pt from 14.8% prior year), driven by increases in personnel expenses, system investments, and retirement benefit costs. Operating Income was ¥80.1B (operating margin 6.9%), an improvement of +0.8pt YoY, with gross margin improvement absorbing the rise in SG&A. Non-operating income of ¥8.1B included foreign exchange gains of ¥2.0B, dividend income of ¥1.5B, and equity-method investment income of ¥2.1B, representing a +¥4.3B swing from the prior year’s equity-method loss of ¥2.2B. Ordinary Income was ¥87.1B (+28.2%), with the increase in non-operating income materially supporting profits outside core operations. Special gains totaled ¥6.2B (bargain purchase gain ¥4.0B, gains on sales of available-for-sale securities ¥2.2B) less special losses of ¥4.2B, netting +¥2.0B, and after income taxes of ¥29.5B (effective tax rate 33.1%), Net Income attributable to owners of the parent was ¥59.6B (+31.2%). In conclusion, the company achieved top-line and bottom-line growth.
The Heavy Temporary Facilities Business reported Revenue of ¥1,036.4B (+3.9%) and segment profit of ¥86.0B (+29.8%), showing notable margin expansion. Penetration of price revisions and maintained utilization rates supported profitability. The Construction Machinery Business reported Revenue of ¥147.7B (+1.3%) and segment profit of ¥3.9B (+20.3%), with modest revenue growth and improved margins. Adjusted total segment profit was ¥89.9B, and after consolidation adjustments of -¥2.9B, Ordinary Income landed at ¥87.1B. The Heavy Temporary Facilities Business accounted for 95.7% of profits, indicating continued concentration of earnings.
[Profitability] Operating margin 6.9% (prior year 6.1%, +0.8pt) and net margin 5.2% (prior year 4.1%, +1.1pt) improved. ROE 7.9% rose +0.9pt from 7.0% prior year, indicating improved capital efficiency. [Cash Quality] Operating Cash Flow (OCF) ¥106.6B is 1.79x Net Income ¥59.6B, and OCF/EBITDA (Operating CF / (Operating Income + Depreciation)) is 0.94x, demonstrating robust cash generation. Accrual ratio is -3.9%, indicating high cash backing of profits. [Investment Efficiency] Total asset turnover was 0.94x (ending asset basis), broadly unchanged, with asset accumulation (cash, tangible fixed assets, contract assets) dampening turnover. [Financial Soundness] Equity Ratio 61.8% (prior year 61.9%), Current Ratio 202.1%, Quick Ratio 194.5% indicate very strong liquidity and capital base. Interest-bearing debt ¥29.1B, Debt/EBITDA 0.26x, Interest Coverage 112.9x show minimal debt burden. Cash and deposits ¥106.1B cover short-term liabilities by 9.64x, reinforcing a net-cash position.
Operating CF was ¥106.6B (prior year ¥87.8B, +21.4%), driven primarily by an OCF subtotal of ¥127.9B less income taxes paid of -¥23.6B. In working capital, decreases in trade receivables and contract assets +¥29.8B and inventory decreases +¥9.4B were sources of cash, while reductions in trade payables -¥41.2B consumed cash. Non-cash adjustments included Depreciation ¥32.9B, Goodwill amortization ¥1.3B, deduction for equity-method investment income ¥2.1B, and adjustment for bargain purchase gain -¥4.0B. Investing CF was -¥20.7B, mainly for acquisitions of tangible and intangible fixed assets and acquisition of subsidiary shares, but the scale remained about 20% of EBITDA and therefore moderate. Financing CF was -¥12.4B, with dividend payments -¥19.9B offset by new share issuance to non-controlling interests +¥15.8B, short-term borrowings +¥1.1B, and long-term debt repayments -¥4.8B. Free Cash Flow (FCF) was OCF ¥106.6B + Investing CF -¥20.7B = ¥85.9B, ample to cover dividend payments of ¥19.9B. Cash and cash equivalents increased from ¥30.6B at the beginning of the period to ¥104.9B at the end, a +¥74.3B increase, significantly strengthening liquidity.
Recurring earnings were generated from rental and sales with Operating Income ¥80.1B (6.9% of Revenue). Non-operating income ¥8.1B (0.7% of Revenue) comprised foreign exchange gains ¥2.0B, dividend income ¥1.5B, and equity-method investment income ¥2.1B, indicating limited dependence on non-operating items. One-off items comprised Special Gains ¥6.2B (bargain purchase gain ¥4.0B, gains on sales of available-for-sale securities ¥2.2B, gains on sale of fixed assets ¥0.2B) less Special Losses ¥4.2B, net +¥2.0B, which boosted Net Income by about ¥2B, but operating-level profit generation remains the core of earnings quality. Operating CF is 1.79x Net Income, accrual ratio -3.9%, and OCF/EBITDA 0.94x indicate strong cash backing. Goodwill amortization ¥1.3B is 1.1% of EBITDA and has a minimal impact, limiting accounting distortions. The gap between Ordinary Income ¥87.1B and Net Income ¥59.6B is attributable to tax burden (effective tax rate 33.1%) and deduction of non-controlling interests; no abnormality is evident.
Compared with full-year guidance, results were Revenue ¥1,156.8B (guidance ¥1,150.0B, +0.6%), Operating Income ¥80.1B (guidance ¥84.0B, -4.6%), Ordinary Income ¥87.1B (guidance ¥86.0B, +1.3%), and Net Income attributable to owners of the parent ¥59.6B (guidance ¥57.0B, +4.6%). Revenue, Ordinary Income, and Net Income exceeded guidance, while Operating Income missed guidance, suggesting impacts from higher SG&A and some cost overruns. Increased non-operating income and special items supported the beat at Ordinary and Net Income stages. Progress rates exceeded 80% at each level and the deviations from full-year guidance were limited. Contract liabilities rose materially to ¥57.5B (prior year ¥32.9B, +74.9%), and the increase in advance-payment style liabilities is notable as a leading indicator of front-loaded future revenue recognition.
Annual dividend was ¥69 (interim ¥25, year-end ¥44), with a payout ratio of 40.1%. Versus FCF ¥85.9B, dividend payments ¥19.9B imply FCF coverage of 4.32x, indicating dividends are at a sustainable level. Actual dividend of ¥69 significantly exceeded the full-year guidance of ¥25, reflecting profit growth and strong cash generation. No share buybacks were conducted; Total Return Ratio equals the payout ratio. With cash and deposits ¥106.1B, net cash ¥77.0B, and low leverage (Debt/EBITDA 0.26x), the company has room to maintain dividends or implement modest increases.
Concentration Risk: The Heavy Temporary Facilities Business accounts for 88.3% of revenue and 95.7% of segment profit, making earnings vulnerable to construction demand cycles and intensified price competition. Declines in rental utilization or price pressure could compress gross margins and weaken fixed-cost absorption.
Working Capital Efficiency Risk: DSO (days sales outstanding) 79 days, contract assets ¥30.9B, work-in-progress ratio 51.4% (work-in-progress ¥9.5B / cost of sales) signal potential project elongation and collection delays. Working capital expansion could increase quarterly cash flow volatility and crystallize credit costs.
One-off Items Reversion Risk: Temporary items such as foreign exchange gains ¥2.0B, bargain purchase gain ¥4.0B, and gains on sales of available-for-sale securities ¥2.2B have boosted Net Income by roughly ¥8B, and their reproducibility in the following year is limited. Maintaining core operating income will be the next period’s challenge.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 6.9% | 3.4% (1.4%–5.0%) | +3.6pt |
| Net Margin | 5.2% | 2.3% (1.0%–4.6%) | +2.9pt |
Profitability substantially exceeds the industry median, reflecting gross margin improvement and cost control.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 3.7% | 5.9% (0.4%–10.7%) | -2.1pt |
Revenue growth trails the industry median slightly, possibly due to mature market competition and demand cycles.
※ Source: Company compilation
Gross margin improvement of +2.0pt and operating margin 6.9% (industry median +3.6pt) demonstrate profitability gains from price revision penetration and maintained rental utilization. The SG&A ratio increase of +1.2pt reflects personnel and IT investments, but if operating margin improvement is sustained, it will form a foundation for medium-term profit growth.
Operating CF ¥106.6B (1.79x Net Income), FCF ¥85.9B, payout ratio 40.1% (FCF coverage 4.32x), cash and deposits ¥106.1B, Debt/EBITDA 0.26x indicate very strong cash generation and financial health. Capacity to maintain dividends or modestly increase them, and selective M&A firepower, are secured, expanding capital allocation flexibility.
DSO 79 days, work-in-progress ratio 51.4%, and contract liabilities +¥24.7B (+74.9%) warrant attention as indicators of larger and longer-duration projects and front-loaded revenue recognition. Improving working capital efficiency is key to the next phase of shareholder value enhancement.
This report is an earnings analysis document automatically generated by AI from 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 based on publicly disclosed financial statements. Investment decisions are your responsibility; please consult a professional advisor as needed.