Revenue and profit growth continues, but a sharp drop in orders received signals the next slowdown risk

FY2027 Q1 revenue was ¥1,164.597 million, up 14.3% year on year, and operating profit was ¥201.088 million, up 28.9%. However, orders received fell 44.9% to ¥1,184.730 million from ¥2,148.974 million in the same quarter of the previous year. The increase in revenue and operating profit reflected progress on projects carried over from the previous period and projects ordered during the current period. The higher revenue and profit in Q1 alone do not establish that the order environment has improved.

The order backlog was ¥3,016.876 million at Q1-end, approximately ¥498.110 million below the ¥3,514.986 million recorded in the same quarter of the previous year, a decline of approximately 14.2% year on year. The order backlog was ¥2,996.744 million at the end of March 2026, so it had increased by only ¥20.132 million by the end of Q1. The fact that the backlog remained almost flat from the fiscal year-end while orders received fell substantially below the previous year is important in assessing revenue visibility from the second half onward.

At the same time, Q1 orders received exceeded revenue by ¥20.133 million, so orders and revenue had not completely reversed. Orders received for FY2026 as a whole were ¥5,286.852 million, indicating that the company had secured orders, including public works. However, the current disclosure does not break down by amount or project whether the Q1 decline in orders reflects a temporary shift in project timing or a structural decline, such as fewer construction or disaster-recovery projects.

At the next earnings announcement, it will be necessary to compare cumulative H1 orders received, order backlog and revenue with the same period of the previous year and check whether the decline in orders received has narrowed from 44.9%. In particular, assessing FY2027 second-half performance will depend not only on whether the order backlog exceeds ¥3,016.876 million, but also on whether the company discloses which businesses, construction, civil engineering or formwork leasing, generated the increase, and distinguishes revenue from the completion of carried-over projects from revenue generated by new orders.