Lower profit from building materials sales due to higher residential timber prices and a challenging order environment

「In the building materials sales segment, although challenging conditions continued in the core precut timber market, external sales increased due to expanded sales of building materials other than precut materials, and the segment returned to profitability due in part to lower depreciation expenses for production equipment.」

「その他のセグメントでは、不動産賃貸セグメントにおいて稼働率が引き続き堅調に推移し、安定的な収益を確保しましたが、建築材料販売セグメントにおいては、主力のプレカット木材における厳しい事業環境が継続したことから、利益は前年同期比で減少しました。」

「In building materials sales, starts of new wooden houses rose sharply in March of the previous year due to rush demand ahead of the April 2025 revision to the Building Standards Act, and then followed a downward trend from April onward as a reaction to that increase, declining 9.6% from the previous fiscal year on a full-year basis.」

「In addition, segment profit fell substantially due to intensifying competition caused by weak demand and higher depreciation expenses associated with the renewal of production equipment. As a result, sales in the building materials sales segment for the interim consolidated accounting period were ¥1,276 million, up 4.7% year on year, while the segment recorded a loss of ¥9 million, compared with segment profit of ¥50 million in the same period of the previous year.」

「Under these conditions, the company worked to strengthen relationships with existing customers and secure orders for properties other than detached houses, such as apartment buildings. However, intensifying competition due to weak demand and downtime associated with the renewal of production equipment resulted in lower sales and profit than in the same period of the previous year.」

「In building materials sales, starts of new wooden houses, which had remained below the same month of the previous year since April 2022, fluctuated between year-on-year increases and decreases from April through September this year, while the order environment remained challenging. Meanwhile, timber prices bottomed out and remained flat.」

「In building materials sales, starts of new wooden houses declined year on year for 21 consecutive months through the end of the current quarter, and the order environment for the core precut materials remained challenging. Meanwhile, timber prices continued to trend down from their peak in the summer of last year, reflecting weak housing demand.」

「In building materials sales, starts of new wooden houses declined year on year for 18 consecutive months through the end of the current quarter, and the order environment for precut materials remained challenging. Timber market prices continued to trend down from their peak in the summer of last year, reflecting weak housing demand.」

「In building materials sales, starts of new wooden houses declined for 15 consecutive months through June 2023 compared with the same months of the previous year, and demand for building materials and precut materials remained soft. Raw material timber prices continued to trend down from their peak through the second quarter of the previous fiscal year as housing demand slowed. Increased competition for orders due to weak demand and adjustments to selling prices in response to falling timber prices resulted in lower sales and profit than in the same period of the previous year.」

「In building materials sales, starts of new wooden houses, an indicator of market conditions, declined for 12 consecutive months through March 2023 compared with the same months of the previous year. As demand slowed, domestic timber prices began to decline in the second half of the current fiscal year.」

「Starts of new wooden houses, an indicator of market conditions, declined for 9 consecutive months through December 2022 compared with the same months of the previous year. Although timber prices remained at high levels, they began to decline as lower starts eased supply-demand conditions.」

「In building materials sales, starts of new wooden houses declined for 6 consecutive months through September compared with the same months of the previous year, when demand had risen during the COVID-19 pandemic, but remained relatively firm. Meanwhile, although the supply-demand tightness in timber had eased due to slower housing demand in the United States and other factors, prices remained at high levels.」

「Amid concerns over soaring timber prices, starts of new wooden houses declined year on year for 3 consecutive months from April.」

「Although the shortage of imported timber and the resulting price surge known as the "wood shock" were beginning to ease, shortages of domestic materials such as plywood and new record highs continued to create challenging conditions. With Russian timber added to the impact of economic sanctions imposed by various countries in response to Russia's invasion of Ukraine, uncertainty about the outlook persisted.」

「In building materials sales, although the shortage of imported timber and the resulting price surge known as the "wood shock" were beginning to ease, shortages of domestic materials such as plywood and the setting of new record highs continued to create challenging conditions」

「U.S. futures prices, which had triggered the surge in timber prices known as the "wood shock," fell to one-third of their peak in early August, while imports gradually recovered, easing supply tightness for both imported and domestic timber. Domestic timber prices, however, continued to trend firm.」

「In building materials sales, starts of new wooden houses were gradually recovering due to increased demand for detached houses and other factors, but the situation became one in which timber prices continued to rise unchecked as the supply-demand imbalance known as the "wood shock" was added to the equation.」

「In building materials sales, the decline in starts of new wooden houses narrowed, but conditions remained challenging. Raw material timber prices generally remained soft.」

「In building materials sales, although starts of new wooden houses, which had declined sharply, showed signs of a partial recovery, conditions remained challenging. In addition, raw material timber prices generally remained soft, with distribution prices for structural lumber for housing reaching their lowest level in 7 years.」

「In building materials sales, economic and purchasing activity stagnated following the spread of COVID-19 from the beginning of the year, causing starts of construction of new wooden houses nationwide to fall sharply year on year and resulting in a pronounced decline in demand for building materials. Raw material timber prices generally remained soft as wholesale prices for building materials declined amid lower demand.」

「From the beginning of the year onward, consumer spending weakened due to the spread of COVID-19, while delays in construction work caused by supply chain disruptions also occurred in the housing industry, making the decline in starts of construction of built-for-sale houses more pronounced.」

「Although raw material timber prices had begun to decline toward the summer, they also began to rise during the current quarter due in part to production adjustments by sawmill operators and others.」

「Raw material timber prices began to decline, affected by lower demand in the United States and China, the two largest consuming countries.」

「Raw material timber prices were broadly unchanged from the end of the previous fiscal year.」

「Raw material timber prices, particularly North American log prices, declined significantly from May as housing investment in the United States slowed due to higher interest rates and other factors.」

「Starts of construction of wooden houses, including custom-built homes, have remained below the same month of the previous year since July last year. Meanwhile, North American log prices began trending down from May, and forecasts indicated that domestic prices would remain soft through the end of the year.」

「In building materials sales, starts of construction of wooden houses, including custom-built homes, have remained below the same month of the previous year since July last year, while raw material timber prices have continued to remain high.」

「In building materials sales, starts of construction of wooden houses, including custom-built homes, turned below the same month of the previous year from July last year, while competition from other companies intensified and raw material timber prices continued to rise and remain high. As a result, sales in building materials sales for the nine-month period of the consolidated fiscal year were ¥2,201 million, down 3.6% year on year, and segment profit was ¥107 million, down 0.8%.」

「The trend in which starts of construction of wooden houses exceeded the same month of the previous year changed, while competition from other companies intensified and raw material timber prices remained high.」

「Raw material timber prices rose or remained high. In addition, high costs resulting from higher raw material prices continued to weigh on profitability.」

「Under these conditions, the company maintained sales growth at ¥3,030 million, up 4.7% year on year, by focusing on expanding its customer base among mainly small and midsize builders for its core precut materials and strengthening sales of building materials and housing equipment other than precut materials. However, segment profit declined to ¥148 million, down 21.4% year on year, due to intensifying competition and higher costs.」

「Segment profit, however, declined due to intense competition and higher material costs. As a result, sales in building materials sales for the nine-month period of the consolidated fiscal year were ¥2,282 million, up 4.0% year on year, while segment profit was ¥108 million, down 22.9%.」

「Prices for materials supplied for precut components turned upward, led mainly by plywood for floors and walls. Segment profit declined due to the challenging order environment and higher timber prices. Segment profit was ¥78 million, down 16.7% year on year.」