乃村工藝社’s cumulative results for the first two quarters of fiscal 2026 showed order backlog reaching a record ¥88.844 billion, while orders received reached a record ¥91.971 billion for the period. However, following the reversal of Expo-related demand, first-half revenue was ¥73.322 billion and operating profit was ¥5.261 billion.
乃村工藝社’s cumulative results for the first two quarters of fiscal 2026 reflected both lower revenue and profit following the reversal of Expo-related and large-scale redevelopment projects, and record highs in orders received and order backlog. Revenue fell 9.0% year on year to ¥73.322 billion, while operating profit declined 23.7% to ¥5.261 billion. Meanwhile, orders received rose to a record ¥91.971 billion and order backlog to a record ¥88.844 billion. The gross profit margin was maintained at 20.1%. President Kokuhon (小久本) described the expansion in demand as a structural change, explaining that demand for renovations, inbound-related investment, the expansion of spending on experiences and office investment are generating new demand for spaces.
By market segment, revenue increased in leisure facilities, public relations and sales promotion, and specialty stores, while the exhibitions and events market declined sharply following the reversal of Expo-related projects from the previous year. The shopping complex market also declined due to the completion of redevelopment projects, although new hotel fit-outs, renovations and event decoration projects contributed. Hotel investment has become more active against a backdrop of rising inbound demand, helping to mitigate the impact of the reversal of Expo-related demand.
The order environment was described as “extremely strong,” with large projects in the leisure facilities and specialty stores markets, as well as orders from overseas brand stores, contributing to results. The order backlog in leisure facilities stood at ¥22.316 billion. The company’s multiple large hotel renovation projects will be key to future revenue recognition. CFO Maejima (前島) explained that the timing of revenue recognition for large projects will be critical to full-year performance.
The core of the medium-term management plan is the creation of sustained value through an end-to-end model. Projects in which the company is involved from the planning stage through operations tend to generate higher gross profit margins. Examples cited included the postpartum care hotel “Villa Mum Tokyo Ariake” and the regional revitalization projects “Happy Lawson Town Ikeda” and “Fujisawa Oten.” These projects are contributing to the accumulation of order backlog and improvement in profit margins.
The full-year outlook was left unchanged, with revenue forecast at ¥168 billion, operating profit at ¥13.4 billion, ordinary profit at ¥13.6 billion and net income at ¥9.25 billion. The operating margin is expected to be 8.0%, and the dividend policy toward achieving the medium-term targets calls for an annual dividend of ¥44 per share.