After the sharp recovery in FY2026, FY2027-Q1 is the first checkpoint for gauging the headroom to deliver the planned decline in profit

FY2026 revenue was ¥135,207 million, operating profit was ¥7,150 million, ordinary profit was ¥6,566 million, and net income attributable to owners of the parent was ¥5,450 million. Operating profit increased 208.4% from ¥2,318 million in the previous fiscal year. The operating margin on revenue also rose 3.4 percentage points, from 1.9% in FY2025 to 5.3% in FY2026, indicating a recovery accompanied by improved profitability rather than simply higher revenue.

By contrast, the company's full-year FY2027 forecasts are revenue of ¥137,000 million, operating profit of ¥6,300 million, ordinary profit of ¥5,700 million, and net income of ¥4,000 million. Revenue is expected to increase 1.3%, while operating profit, ordinary profit, and net income are planned to decline 11.9%, 13.2%, and 26.6%, respectively. The plan does not assume that the high level of profit in FY2026 will continue to grow unchanged. Key points include the extent to which the decline reflects the setback from large, highly profitable construction projects, higher materials and labor costs, and normalization of earnings in the real estate and energy businesses.

For the next FY2027-Q1, the comparison base will be the year-earlier revenue of ¥34,515 million, operating profit of ¥1,947 million, ordinary profit of ¥1,971 million, and net income of ¥1,302 million. Although seasonality makes it inappropriate to judge full-year performance from Q1 alone, if operating profit falls below the year-earlier level, it will be necessary to consider whether the FY2026 earnings recovery depended on the timing of project completions. Conversely, if revenue increases while margins are maintained, the possibility that the full-year profit decline forecast is conservative will increase.

It will also be important to see whether the company leaves its full-year forecast unchanged in FY2027-Q1 and whether it provides additional explanation of construction profitability prospects or its civil engineering order strategy. The factors behind the improvement in FY2026 full-year results were described qualitatively as a focus on profitable orders, cost control, and replacement of loss-making projects, but the monetary contribution of each factor was not disclosed. At the next earnings announcement, it will be necessary to distinguish whether the basis for the forecast profit decline includes new construction losses or simply assumes a setback from the previous year.