The key FY2027 question is whether a rebound in orders will translate into order backlog growth

Orders received totaled ¥82,182 million in FY2025, with an order backlog of ¥81,698 million at fiscal year-end. In FY2026, orders received fell to ¥80,004 million and the order backlog to ¥72,498 million, declines of 2.7% and 11.3%, respectively, from the previous fiscal year. Although orders received had recovered to ¥43,908 million in the first half of FY2026, up 4.9% year on year, orders from local governments and expressway companies fell below the previous year for the full fiscal year, resulting in an annual decline.

The company plans to increase orders received by 18.7% from the current fiscal year to ¥95,000 million in FY2027. In particular, it expects orders for seismic retrofitting work from NEXCO East Japan, where order volumes were low in FY2026, to recover, and plans to build its year-end order backlog through an order strategy focused on optimizing the company as a whole. Accordingly, in the next first-quarter results, it will be necessary to distinguish whether the recovery is centered on NEXCO East Japan seismic retrofitting projects or on an increase in orders from the national and local governments, rather than simply checking whether orders received exceeded the prior-year quarter.

Even if orders increase, at ショーボンド, large-scale and multi-year projects for expressway companies are not recognized as revenue until detailed design and construction preparations have been completed, creating a time lag between orders and revenue recognition. Using the FY2026 order backlog of ¥72,498 million as a benchmark, we will check at the next earnings release whether the backlog has increased, whether projects have progressed to commencement of construction, and whether the proportion of the backlog attributable to expressway company projects has risen.

As of now, the company has not disclosed first-quarter FY2027 orders received, the breakdown by customer or the number of projects exceeding ¥1 billion. Even if first-quarter orders are positive year on year, if the order backlog falls below ¥72,498 million or specific amounts for large-scale projects are not disclosed, the likelihood of achieving the full-year target of ¥95,000 million will need to be assessed cautiously.