Aiming for ¥30.9 billion in full-year operating profit through margin improvement despite lower revenue

In the fiscal year ended March 2026, revenue fell 2.2% year on year to ¥487.698 billion, while operating profit rose 89.5% to ¥27.092 billion. The company’s plan for the fiscal year ending March 2027 calls for revenue of ¥500.0 billion, operating profit of ¥30.9 billion, ordinary profit of ¥31.0 billion, and net profit attributable to owners of the parent of ¥20.4 billion. This implies revenue growth of 2.5% but operating profit growth of 14.1%, making margin improvement a key assumption in the plan.

First-quarter revenue was ¥100.018 billion, operating profit was ¥2.867 billion, ordinary profit was ¥2.719 billion, and net profit attributable to owners of the parent was ¥1.432 billion. Revenue declined 5.1% year on year, but operating profit increased 42.2%, implying that the operating margin rose by approximately 1.0 percentage point, from about 1.9% to about 2.9%. However, the structured summary data does not disclose the revenue-based operating margin itself, nor does it provide a monetary breakdown of which expense items or construction projects generated the margin improvement.

By segment, first-quarter revenue from the Building Construction Business fell to ¥47.833 billion from ¥52.237 billion a year earlier, while segment profit rose from ¥352 million to ¥1.685 billion. The Civil Engineering Business recorded revenue of ¥27.720 billion and segment profit of ¥530 million, while subsidiaries recorded revenue of ¥24.464 billion and segment profit of ¥694 million. The overall picture is therefore one in which improved profitability in the Building Construction Business supported group-wide profit.

In the next period, FY2027-H1, the key checks will be whether operating profit exceeds ¥15.450 billion, half of the ¥30.9 billion full-year target, as well as the impact of low-margin projects in the Building Construction Business, the pass-through of materials and labor costs, and the acquisition of additional design changes. Because cash flow from operating activities was also not disclosed for the first quarter, it will also be necessary to determine whether the margin improvement is accompanied by cash generation and whether specific orders and construction progress support maintaining the full-year forecast.