Improving the ratio of prime-contract orders and reducing the cost ratio through greater management efficiency

「Efforts to reduce costs in prime-contractor projects proved effective, securing higher profit year on year.」

「Sales and profit increased year on year because soil contamination remediation works progressed smoothly in line with the plan, while larger projects resulted in higher construction unit prices, and the introduction of new technologies such as DX, mainly in prime-contract work, shortened construction periods and improved costs.」

「For soil contamination remediation works exceeding a certain order value, the company applies the percentage-of-completion method and will work to improve accuracy through timely monthly cost management.」

「Sales and profit increased substantially year on year because the order backlog was high at the beginning of the fiscal year, utilization in the construction division improved and large projects accounted for under the percentage-of-completion method progressed smoothly, and the company continued efforts to improve costs.」

「Sales recovered and the cost ratio improved as large projects whose construction starts had been delayed due to customer-related factors and other reasons, as well as large prime-contract in-situ remediation projects, progressed.」

「Orders progressed largely in line with the plan. However, in addition to delays in starting construction on large projects due to customer-related factors, the number of high-margin projects was lower than in the previous year, resulting in lower sales and profit year on year.」

「Sales and profit declined year on year because several projects accepted at the expense of profit to build a track record as part of the sales strategy were completed during the period.」

「The company promoted measures including achieving its order target, thorough construction quality and cost management, and improving operating efficiency through DX. Although it fell slightly short of the order target set at the beginning of the fiscal year, its order backlog at the end of the current consolidated fiscal year reached a record high, providing a result that will carry into the next fiscal year. Cost-ratio improvements are also progressing.」

「During the current cumulative second quarter of the consolidated fiscal year, sales and profit increased as the cost ratio improved for large projects awarded in the previous year and for performance-guaranteed projects in which the company guarantees remediation costs.」

「During the current first-quarter consolidated accounting period, sales and profit increased as the cost ratio of a large project awarded in the previous year and still under construction improved.」

「Compared with the previous consolidated fiscal year, the proportion of projects with high cost ratios declined, and improvements in construction efficiency also contributed to higher sales and a substantial increase in profit.」

「During the cumulative third quarter of the current consolidated fiscal year, the proportion of projects with high cost ratios declined from the previous year, and improvements in construction efficiency also contributed to higher sales and a substantial increase in profit.」

「The number of soil contamination remediation projects has not declined because the real estate market is buoyant. However, as competition for land acquisition has intensified, developers have tended to reduce budgets related to soil contamination remediation. In response to these market changes, the proportion of orders for management-based methods aimed at managing soil contamination, rather than completely remediating it, increased. Profit increased substantially because the previous year included projects with high cost ratios, while the cost ratio improved during the current cumulative consolidated period.」

「The company will work to manage risk by thoroughly implementing a quality control system under which sales, technical and construction personnel take a multifaceted view of projects to improve quality and reduce costs, while strengthening the Safety and Environmental Office to further reinforce safety measures.」

「There was no significant change in profit margins.」

「On the profit side, the company had been working to improve profit margins since the middle of the previous consolidated fiscal year. The proportion of projects with high cost ratios declined, and changes in the sales mix resulted in higher profit.」

「In addition to the disappearance of temporary factors such as increased prime-contract projects, upfront investment in new construction methods incurred during the cumulative period of the previous year, and delays in launching new businesses, revisions to cost ratios through improvements in construction on projects accounted for under the percentage-of-completion method improved profit margins and resulted in a substantial increase in profit.」

「In addition to the effect of cost-ratio improvements, profit increased because expenses incurred in the previous year for large-scale research and development were no longer incurred.」

「Although revenue declined because product sales were weak and some construction projects progressed slowly, profit increased as the benefits of an improved cost ratio began to emerge.」

「株式会社エンバイオ・エンジニアリング, which was launched in April 2018 through the integration of 3 soil contamination remediation companies, will prioritize increasing the proportion of prime-contract awards, improving management efficiency and reducing the cost ratio while expanding its operations.」