Strengthening capabilities to respond to large-scale renewal and major repairs of urban expressways

「Primarily in the bridge segment, substantial contributions to earnings from improved profitability in maintenance work and design changes for new bridge construction resulted in completed construction revenue of ¥20.69 billion, up 0.1% year on year, and operating income of ¥320 million, compared with an operating loss of ¥540 million in the same period of the previous year.」

「Regarding completed construction revenue, at our company, the acquisition of design changes for both new bridge construction and maintenance work produced results exceeding expectations, leading to a figure above that of the same period of the previous year.」

「The principal projects for which revenue was recorded during the current consolidated fiscal year were, in the bridge segment, the widening of the Sasebo Viaduct ordered by West Nippon Expressway Company Limited, Kaizu Viaduct and Kawashima Bridge ordered by the Chubu Regional Development Bureau, and Rokko Island Third Viaduct ordered by the Kinki Regional Development Bureau; and, in the maintenance segment, deck replacement work on Nagara River Bridge and bearing replacement work on Lake Hamana Bridge ordered by Central Nippon Expressway Company Limited, and repair and reinforcement work on Kiso River Bridge.」

「The bridge maintenance market is expected to expand further. In addition to large-scale specialized bridge maintenance projects, we aim to continue securing small- and medium-sized bridge maintenance projects and will focus on large-scale expressway renewal and deck replacement work.」

「At the subsidiary, improvements in construction profitability and progress on highly profitable projects resulted in completed construction revenue of ¥13.96 billion, up ¥3.31 billion, or 31.1%, year on year, and operating income of ¥100 million, compared with an operating loss of ¥6 million in the same period of the previous year.」

「Revenue in the bridge segment increased from the same period of the previous year, owing in part to higher on-site construction volume for maintenance work and the addition of a newly consolidated subsidiary.」

「Order volume for bridge maintenance work remained firm, creating an environment in which the importance of the bridge maintenance business is increasing further.」

「In addition, as design changes increased, primarily for road bridges, and the performance of subsidiaries in the segment also improved, completed construction revenue was ¥10.65 billion, up ¥2.13 billion, or 25.1%, year on year.」

「As factory operations recovered, design changes increased for road bridges ordered by government agencies and private-sector customers, and the subsidiary also performed well, completed construction revenue was ¥6.54 billion, up ¥1.59 billion, or 32.1%, year on year, and operating income was ¥50 million, compared with an operating loss of ¥0 million in the same period of the previous year.」

「In addition, because the subsidiary's maintenance business maintained the strong level of the same period of the previous year in both railway and expressway maintenance work, completed construction revenue was ¥3.47 billion, up ¥1.06 billion, or 44.3%, year on year, and operating income was ¥420 million, compared with operating income of ¥20 million in the same period of the previous year.」

「Although our group strengthened its technical proposal capabilities and, for projects ordered under the ECI method, proceeded from design to the execution of construction contracts」

「In the subsidiary's maintenance business, earnings also increased as a result of higher revenue. However, completed construction revenue was ¥8.51 billion, down ¥930 million, or 9.9%, year on year, and the business recorded an operating loss of ¥60 million, compared with operating income of ¥100 million in the same period of the previous year.」

「In quarterly earnings, although the decline in factory operating rates and other factors caused by COVID-19 increased the fixed-cost ratio of manufacturing costs, design changes were recorded for certain expressway projects. As a result, completed construction revenue was ¥6.45 billion, up ¥470 million, or 7.9%, year on year, and operating income was ¥6 million, compared with an operating loss of ¥260 million in the same period of the previous year.」

「For the bridge maintenance business, in May 2019, we relocated our maintenance department to the new office of our consolidated subsidiary 瀧上建設興業㈱, designated the site as the base for our group's maintenance business and relaunched operations there.」

「To address the expansion of bridge maintenance work, establishing an operating structure, including securing personnel, is a challenge. To address this challenge, we will consolidate our group's departments involved in maintenance work at the new office and pursue expansion through collaboration.」

「With a view to further expansion after the current medium-term management plan, we will develop the bridge maintenance business as a new bridge engineering business.」

「Over the medium to long term, we will promptly increase and enhance the technical staff assigned, improve estimating accuracy and strengthen our technical proposal capabilities in order to address large-scale renewal and repair projects on urban expressways, including the Tokyo Metropolitan Expressway and Hanshin Expressway.」