Pressure on Building-Materials Profitability from Weak Housing Starts and Sluggish Sales of Core Products
First written in FY2019-Q2. 11 of 26 entries say "Worsened", first in FY2021-Q1. Latest entry: 2026-08-06.
Nihon Kagaku Sangyo moved to the "Worse" side of this theme in 2023, 3 years after the typical company in this theme (2020).
The whole theme swung hardest in 2023: 15 of 22 companies on the "Worse" side.
4 other companies' latest entry also says "Mitigated".
- 2026-08-06MitigatedEarnings
「Even under these conditions, revenue increased due to a rebound from the temporary decline in demand caused by the amendment to the Building Standards Act in the previous year, as well as progress in developing new customers and expanding sales of new products. In terms of profit, although there were factors increasing costs, the expansion in sales offset the cost increases, resulting in a substantial increase in profit compared with the same quarter of the previous year.」
Despite continued declines in new housing starts and rising costs, new customer development and expanded sales of new products resulted in higher revenue and profit, partially easing pressure on profitability in the building materials business. - FY2026Higher sales and lower profit for the full yearAnnual report
「In the building materials business, difficult operating conditions have continued, with new housing starts in fiscal 2025 substantially below the previous year. Even under these conditions, efforts to develop new customers and expand sales of new products resulted in sales volumes exceeding the previous year and higher revenue. On the other hand, higher fixed costs, mainly personnel expenses, and increased logistics costs resulted in lower profit.」
Sales volumes and revenue increased through efforts to develop new customers and expand sales of new products despite the challenging environment, including fewer housing starts, but higher fixed and logistics costs resulted in lower profit. - 2026-05-14OtherEarnings
「In the building materials business, difficult operating conditions have continued, with new housing starts in fiscal 2025 substantially below the previous year. Even under these conditions, efforts to develop new customers and expand sales of new products resulted in sales volumes exceeding the previous year and higher revenue. On the other hand, higher fixed costs, mainly personnel expenses, and increased logistics costs resulted in lower profit.」
The building materials business reported higher revenue from securing sales volumes, while difficult conditions including weak housing starts and increased fixed and logistics costs led to lower profit. - FY2026-H1Higher revenue but lower profit because of higher fixed costsAnnual report
「The challenging business environment continued, including a decline in new housing starts. Under these conditions, the company worked to develop new customers and expand sales of new products. During the interim consolidated accounting period, revenue increased year on year despite short-term fluctuations in demand caused by the amendments to the Building Standards Act that took effect in April 2025 and other factors. Segment profit, however, declined slightly because of higher fixed costs, primarily labor costs.」
Despite the continued challenging environment, including fewer housing starts, efforts to develop new customers and expand sales of new products increased revenue, but higher fixed costs, primarily labor costs, led to a slight decline in segment profit. - FY2025WorsenedAnnual report
「The challenging business environment continued, including a decline in new housing starts. Under these conditions, the company worked to develop new customers and expand sales of new products, but revenue was ¥1,780 million, down ¥197 million, or 10.0%, year on year, because of lower demand and persistently high steel prices. Segment profit was ¥278 million, down ¥130 million, or 31.8%.」
Although the company worked to develop new customers and expand sales of new products, the building materials segment posted lower revenue and profit for the interim period, following the decline in housing demand and persistently high steel prices. - FY2025-H1WorsenedAnnual report
「The challenging business environment continued, including a decline in new housing starts. Under these conditions, the company worked to develop new customers and expand sales of new products, but revenue was ¥1,780 million, down ¥197 million, or 10.0%, year on year, because of lower demand and persistently high steel prices. Segment profit was ¥278 million, down ¥130 million, or 31.8%.」
New housing starts, demand and steel prices remained weak, and although the company worked to develop new customers and expand sales of new products, the building materials segment posted lower revenue and profit. - FY2024WorsenedAnnual report
「The challenging business environment continued, including declining new housing starts and persistently high steel prices. Under these conditions, selling price revisions in response to higher steel and other prices increased revenue, but lower sales volumes and other factors led to a decline. Although the company worked to improve productivity, operating profit declined because of higher fixed and other costs.」
Full-year revenue and operating profit in the building materials segment declined because of fewer housing starts, lower sales volumes and higher fixed and other costs. - FY2024-Q3RestatedAnnual report
「The challenging business environment continued, including declining new housing starts and persistently high steel prices. Under these conditions, revenue increased as selling price revisions commensurate with higher steel and other prices proved effective, despite the negative impact of lower sales volumes. Operating profit declined because of lower sales volumes and higher fixed and other costs.」
Declining housing starts, persistently high steel prices and lower sales volumes continued. Selling price revisions increased revenue, but operating profit declined because of higher costs and other factors. - FY2024-Q2WorsenedAnnual report
「The challenging business environment continued, including declining new housing starts and rising steel prices. Under these conditions, revenue increased as the company proceeded with selling price revisions commensurate with increases in steel and other prices. However, operating profit declined because of lower sales volumes resulting from the decline in housing starts and other factors.」
Revenue increased as selling prices were revised in response to higher steel prices, but operating profit declined because of lower sales volumes resulting from the decrease in new housing starts and other factors. - FY2024-Q1Steady demand, but continued failure to fully pass through steel price increasesAnnual report
「Demand for core housing materials products remained steady, and revenue was ¥1,004 million, up ¥62 million, or 6.7%, year on year. In terms of profit, however, the increase in steel prices could not be fully passed through to selling prices, and operating profit was ¥219 million, down ¥16 million, or 6.8%.」
Demand for core housing materials remained steady and revenue increased, but operating profit declined year on year because the increase in steel prices could not be fully passed through to selling prices. - FY2023WorsenedAnnual report
「Demand for core housing materials products remained weak. In addition to revenue being limited to ¥3,963 million, up ¥33 million, or 0.8%, from the previous fiscal year, only part of the increase in steel prices could be passed through to selling prices. Operating profit was ¥924 million, down ¥196 million, or 17.5%.」
Demand for core housing materials remained weak, and only part of the increase in steel prices could be passed through to selling prices, resulting in lower profit despite higher revenue in the building materials segment. - FY2023-Q3WorsenedAnnual report
「Demand for core housing materials products remained weak, leaving revenue at ¥2,965 million, up ¥8 million, or 0.3%, year on year. Although some of the increase in steel prices was passed through to selling prices, it could not be fully reflected, and operating profit was ¥743 million, down ¥135 million, or 15.5%.」
As demand for core housing materials remained weak, the full impact of higher steel prices could not be passed through to selling prices, and the decline in building materials segment operating profit has continued. - FY2023-Q2RestatedAnnual report
「Supported in part by steady performance from core housing materials products, revenue was ¥1,925 million, up ¥73 million, or 4.0%, year on year. Although some of the increase in steel prices was passed through to selling prices, it could not be fully reflected, and operating profit was ¥478 million, down ¥49 million, or 9.4%.」
Sales of core housing materials increased, but the full impact of higher steel prices could not be passed through to selling prices, and the decline in building materials segment operating profit has continued. - FY2023-Q1WorsenedAnnual report
「Supported in part by steady performance from core housing materials products, revenue was ¥941 million, up ¥35 million, or 4.0%, year on year. However, operating profit was ¥235 million, down ¥17 million, or 6.8%, because of the significant impact of higher steel prices.」
Sales of core housing materials increased, but operating profit in the building materials segment declined year on year because of higher steel prices. - FY2022-Q3MitigatedAnnual report
「As demand for new housing starts recovered along with the recovery in economic activity, core housing materials products continued to perform steadily. Revenue was ¥2,957 million, up ¥358 million, or 13.8%, year on year, while the resulting revenue increase lifted operating profit to ¥879 million, up ¥170 million, or 24.0%.」
The recovery in demand for new housing starts and steady performance by core housing materials further eased the factors behind the building materials segment's revenue and profit declines. - FY2022-Q2MitigatedAnnual report
「In the Building Materials business, demand continued to recover as economic activity resumed. Although challenges remained in entering new markets and expanding sales channels, core products performed steadily, resulting in net sales of ¥1,851 million, up ¥213 million, or 13.1%, from the same quarter of the previous year, and operating profit of ¥527 million, up ¥87 million, or 20.0%.」
The building materials segment posted higher revenue and operating profit as economic activity recovered and core products performed steadily, partially easing the factors that had caused performance to deteriorate in the previous fiscal year. However, challenges remain in entering new markets and expanding sales channels. - FY2022-Q1WorsenedAnnual report
「In the Building Materials business, as the business environment improved, net sales were ¥905 million, up ¥52 million, or 6.2%, from the same quarter of the previous year, and operating profit was ¥252 million, up ¥17 million, or 7.4%. However, the commercialization of new products and expansion of sales channels, which had been identified as challenges, did not progress as expected. In addition, the global shortage of timber raised concerns that housing starts could be delayed going forward.」
In addition to delays in the rollout of new products and expansion of sales channels, the possibility of housing construction delays caused by a global timber shortage emerged as a new concern for the building materials segment. - FY2021WorsenedAnnual report
「Housing construction delays and restrictions on sales activities by the company and its business partners caused by the COVID-19 pandemic through the second quarter, together with weak growth in new products and other items, resulted in revenue of ¥3,461 million, down ¥308 million, or 8.2%, from the previous fiscal year, and operating profit of ¥927 million, down ¥155 million, or 14.4%.」
Housing construction delays and restrictions on sales activities, together with weak growth in new products and other items, resulted in lower full-year revenue and operating profit. - FY2021-Q3MitigatedAnnual report
「As sales activities resumed from the middle of the year, the business gradually began to recover from the second half of the third quarter, led mainly by its core housing materials,」
After sales activities resumed, the building materials segment began to recover from the second half of the third quarter, led mainly by core housing materials. On a cumulative basis, however, revenue and operating profit continued to decline because of housing construction delays and weak growth in new products and other items. - FY2021-Q2WorsenedAnnual report
「Housing materials, including the core fire-resistant ventilated trim product, performed poorly because of housing construction delays and restrictions on sales activities by the company and its business partners amid the COVID-19 pandemic. Revenue was ¥1,638 million, down ¥222 million, or 11.9%, year on year, while operating profit was ¥439 million, down ¥94 million, or 17.7%.」
Housing construction delays and restrictions on sales activities led to year-on-year declines in building materials segment revenue and operating profit. - FY2021-Q1WorsenedAnnual report
「The number of new housing starts remained sluggish. In addition, housing construction delays and restrictions on sales activities by the company and its business partners amid the COVID-19 pandemic caused housing materials, including the core fire-resistant ventilated trim product, to perform poorly. Revenue was ¥853 million, down ¥76 million, or 8.2%, year on year, while operating profit was ¥235 million, down ¥38 million, or 14.2%.」
In addition to the longstanding slump in new housing starts, delays in housing construction and restrictions on sales activities caused by the COVID-19 pandemic led to year-on-year declines in building materials segment revenue and operating profit. - FY2020-Q3MitigatedAnnual report
「Housing materials including the core fire-resistant ventilated trim product performed steadily. In addition, some new non-residential products began to contribute to results, while the impact of the post-consumption-tax-increase decline was less severe than feared. Revenue was ¥2,846 million, up ¥240 million, or 9.2%, year on year, while operating profit was ¥831 million, up ¥90 million, or 12.2%.」
Despite continued sluggishness in new housing starts, revenue and operating profit in the building materials segment increased on steady housing materials performance, contributions from new non-residential products, and the limited impact of the post-tax-increase decline. - FY2020-Q2MitigatedAnnual report
「Although the number of new housing starts, which significantly affects the performance of the building materials segment, remained sluggish, housing materials including the core fire-resistant ventilated trim product continued to perform steadily, supported by government measures to assist home purchases and, to a limited extent, rush demand ahead of the consumption tax increase. Revenue was ¥1,860 million, up ¥226 million, or 13.9%, year on year, while operating profit was ¥534 million, up ¥97 million, or 22.2%.」
The number of new housing starts remained sluggish, but housing materials performed steadily on the strength of home-purchase support measures and other factors, resulting in year-on-year increases in revenue and operating profit. - FY2020-Q1MitigatedAnnual report
「Although the number of new housing starts, which significantly affects the performance of the building materials segment, remained sluggish, housing materials including the core fire-resistant ventilated trim product grew steadily, supported by government measures to assist home purchases and, to a limited extent, rush demand ahead of the consumption tax increase. Revenue was ¥929 million, up ¥117 million, or 14.5%, year on year, while operating profit was ¥274 million, up ¥46 million, or 20.5%.」
The sluggish number of new housing starts continued, but housing materials grew on the strength of home-purchase support measures and other factors, with revenue and operating profit exceeding the year-earlier levels. - FY2019-Q3RestatedAnnual report
「The number of new housing starts, which significantly affects the performance of the building materials segment, remained sluggish. Although sales of the core fire-resistant ventilated trim product increased for some customers, overall sales remained weak. Revenue was therefore ¥2,605 million, up ¥76 million, or 3.0%, year on year, while operating profit was ¥740 million, up ¥14 million, or 2.1%.」
The sluggish number of new housing starts and generally weak growth in core building materials products have continued. Meanwhile, revenue and operating profit exceeded the year-earlier levels. - FY2019-Q2MaterialisedAnnual report
「In the Building Materials business, new housing starts, which have a major impact on performance, remained sluggish. Although sales of the core fire-resistant ventilation trim increased for some customers, they were generally slow, resulting in revenue of ¥1,633 million, up ¥14 million, or 0.9%, year on year, while operating profit was ¥437 million, down ¥14 million, or 3.1%.」
Weak housing starts and generally sluggish sales of the core product were reflected in the Building Materials business, with operating profit down 3.1% year on year.