Nishimatsu Construction (1820): FY2025 Results Summary — Profit Up 37.2% as the Revenue Improvement Plan Lifts ROE to 13.1%

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Note on fiscal-year labels: Nishimatsu Construction refers to the fiscal year ended March 31, 2026 as “FY2025” in its narrative and as “FY2026/3” in its tables and charts, and to the fiscal year ending March 31, 2027 as “FY2026” or “FY2027/3”. The labels used below follow the source material. All amounts are stated in the unit used by the company’s Fact Book, 100 million yen, unless the company itself expressed the figure in billions of yen.

Nishimatsu Construction reported an increase in both sales and profits for the fiscal year ended March 31, 2026, with net sales of 3,960 (100 million yen) and profit attributable to owners of parent of 240, up 37.2% year on year. The company attributes the improvement to steady progress of the revenue improvement plan for domestic building projects, design change contracts obtained for a large-scale project, and the sale of cross-shareholdings. As a result, return on equity (ROE) improved from the previous fiscal year (10.3%) to 13.1%. Construction orders received fell 11.3% to 3,810, reflecting a conservative order intake plan in domestic civil engineering.

Consolidated Results (Full-Year Actual)

The fiscal year ended March 31, 2026 was the final year of the Medium-Term Management Plan 2025. The company states that, despite rising construction and borrowing costs, the revenue improvement plan progressed steadily and business results exceeded the forecasts made at the beginning of the period. Gross profit rose 23.1% to 542, with the gross profit ratio improving 1.7 percentage points to 13.7%.

Item (Unit: 100 million yen)	FY2026/3 (Results)	FY2025/3	Increase/decrease amount	Increase/decrease rate
Construction orders received	3,810	4,297	(487)	(11.3)%
[Orders received by Subsidiaries]	[112]	[199]	[ (87) ]	[ (43.9%) ]
Net sales	3,960	3,668	292	8.0%
Gross profit [ratio]	542 [13.7%]	441 [12.0%]	101 [+1.7pt]	23.1%
Operating profit [ratio]	280 [7.1%]	210 [5.8%]	69 [+1.3pt]	32.8%
Ordinary profit [ratio]	273 [6.9%]	202 [5.5%]	71 [+1.4pt]	35.4%
Profit attributable to owners of parent [ratio]	240 [6.1%]	175 [4.8%]	65 [+1.3pt]	37.2%

Construction Orders Received

In the domestic civil engineering business, the company set a conservative order intake plan for the year because of the abundant construction work on hand at the end of the previous fiscal year; orders received nonetheless exceeded the initial plan of 70.0 billion yen. In the domestic building business, orders exceeded the initial plan of 230.0 billion yen on the back of a large-scale redevelopment project. In the international business, orders were received for Official Development Assistance (ODA) construction projects in the Philippines, although two were pushed back, and subsidiaries in Thailand and Vietnam received fewer orders due to delays. Consolidated orders received are stated after elimination of transactions between consolidated subsidiaries.

Orders received (Unit: 100 million yen)	FY2026/3	FY2025/3	Increase/decrease rate	FY2027/3 (Forecast)
Consolidated orders received	3,810	4,297	(11.3)%	4,150
Non-consolidated orders received	3,698	4,099	(9.8)%	4,000
Domestic Civil Engineering	815	1,895	(57.0)%	1,250
Domestic Building	2,433	2,053	18.5%	2,500
Overseas	448	150	198.3%	250
Orders received by subsidiaries (overseas building)	112	199	(43.9)%	150

Segment Results

The Domestic Civil Engineering Business showed an increase in both sales and profits, with net sales of 121.1 billion yen (up 13.0% year on year) and gross profit of 16.4 billion yen (up 8.4% year on year), as construction projects on hand progressed smoothly and much construction was completed in the current fiscal year, increasing the amount gained from design changes. The Domestic Building Business also showed an increase in both sales and profits, with net sales of 215.0 billion yen (up 12.6% year on year) and gross profit of 25.0 billion yen (up 51.5% year on year), stemming from steady progress of large-scale logistics facility and data center construction, a decrease in the proportion of construction affected by rising costs, and improved profitability from large-scale construction completed in the year. The International Business showed a decrease in both sales and profits, with net sales of 31.6 billion yen (down 17.5% year on year) and gross profit of 0.8 billion yen (down 51.1% year on year), mainly attributable to delays of ODA projects and delays and suspensions of projects expected by subsidiaries in Thailand and Vietnam. Within the Environment and Urban Development Business, the Asset Value-Added Business showed a decrease in sales and an increase in profits, with net sales of 25.0 billion yen (down 6.7% year on year) and gross profit of 11.3 billion yen (up 9.7% year on year), while the Regional Environmental Solutions Business showed an increase in both sales and profits, with net sales of 0.74 billion yen and gross profit of 0.19 billion yen as the biomass power plant that started operation in the previous fiscal year contributed to profits for a full business year.

Segment	Metric (Unit: 100 million yen)	FY2026/3	FY2025/3	FY2027/3 (Forecast)
Domestic Civil Engineering (non-consolidated)	Orders received	815	1,895	1,250
Domestic Civil Engineering (non-consolidated)	Net sales	1,211	1,071	1,300
Domestic Civil Engineering (non-consolidated)	Gross profit [margin]	164 [13.6%]	151 [14.1%]	180 [13.8%]
Domestic Civil Engineering (non-consolidated)	Orders carried forward	2,546	2,942	2,496
Domestic Building (non-consolidated)	Orders received	2,433	2,053	2,500
Domestic Building (non-consolidated)	Net sales	2,150	1,910	2,280
Domestic Building (non-consolidated)	Gross profit [margin]	250 [11.7%]	165 [8.7%]	280 [12.3%]
Domestic Building (non-consolidated)	Orders carried forward	3,382	3,099	3,602
International (consolidated)	Orders received	561	350	400
International (consolidated)	Net sales	316	383	330
International (consolidated)	Gross profit [margin]	8 [2.7%]	17 [4.6%]	15 [4.5%]
International (consolidated)	Orders carried forward	957	698	1,027
Environment and Urban Development (consolidated)	Net sales	257	273	490
Environment and Urban Development (consolidated)	Gross profit [margin]	115.4 [44.8%]	104.1 [38.1%]	105.0 [21.4%]

Financial Position

Total assets increased by 93.9 billion yen compared to the end of the previous fiscal year to 686.0 billion yen, primarily owing to increases in notes receivable, accounts receivable from completed construction contracts and other, and costs on construction contracts in progress. Total liabilities increased by 70.7 billion yen to 481.5 billion yen, and net assets increased by 23.2 billion yen to 204.4 billion yen, primarily due to the recording of profit and an increase in valuation difference on available-for-sale securities. Although owners’ equity increased, total assets expanded because of a temporary large increase in receivables, resulting in a decrease of 0.7 percentage points from the previous fiscal year to 28.4% in the owner’s equity ratio. Against an initial plan of 248.0 billion yen, interest-bearing debt came in 15.1 billion yen lower at 232.8 billion yen due to the sale of cross-shareholdings and other factors, and the ratio of cross-shareholdings to net assets fell from 17.8% to 16.8% even though the stock price increased.

FY2026 Forecast (Fiscal Year Ending March 31, 2027)

For the fiscal year ending March 31, 2027, the company forecasts higher orders received, net sales, gross profit and operating profit, but lower ordinary profit and profit attributable to owners of parent. The figures below are the forecast at the beginning of FY2026 as presented in the Fact Book.

Item (Unit: 100 million yen)	FY2027/3 (Forecast)	FY2026/3 (Results)	Increase/decrease amount	Increase/decrease rate
Construction orders received	4,150	3,810	339	8.9%
[Orders received by Subsidiaries]	[150]	[112]	[37]	[33.8%]
Net sales	4,400	3,960	439	11.1%
Gross profit [ratio]	580 [13.2%]	542 [13.7%]	37 [ (0.5pt) ]	6.8%
Operating profit [ratio]	285 [6.5%]	280 [7.1%]	4 [ (0.6pt) ]	1.7%
Ordinary profit [ratio]	265 [6.0%]	273 [6.9%]	(8) [ (0.9pt) ]	(3.2)%
Profit attributable to owners of parent [ratio]	205 [4.7%]	240 [6.1%]	(35) [ (1.4pt) ]	(14.8)%

Shareholder Returns

The company states that its dividend policy since FY2024 is to pay stable dividends with a dividend on equity (DOE) ratio of approximately 5%. Dividends for FY2025 (the fiscal year ended March 31, 2026) increased 10 yen from the initial forecast to 230 yen per share, equivalent to a DOE of 4.9% and a dividend payout ratio of 37.7%. For FY2026, the company expects to pay dividends of 250 yen per share, and the Medium-Term Management Plan 2028 target for FY2028 is a DOE of around 5%.

Medium-Term Management Plan: Financial Indicators

Against the Medium-Term Management Plan 2025 target of 10%, ROE improved to 13.1%, achieving the plan. The company notes that in FY2025 extraordinary income (gain on sale of investment securities) of 8.3 billion yen was recorded because the sale of cross-shareholdings advanced beyond the initial plan, and that excluding this effect ROE is approximately 10.1%. The owner’s equity ratio was limited to 28.4% against a planned value of around 30% because total assets increased on higher accounts receivable from completed construction contracts, even though equity accumulated more than planned; the D/E ratio was held to 1.19 times against a planned value of around 1.5 times.

Indicator	MTMP 2025	FY2023	FY2024	FY2025	FY2028	FY2035
ROE (capital efficiency)	10%	7.8%	10.3%	13.1%	Around 11%	Around 12%
Capital to assets ratio (financial health)	Around 30%	29.1%	29.1%	28.4%	Around 35%	Around 35%
DE ratio (financial health)	Around 1.5	1.10	1.24	1.19	Around 1.0	Around 1.0
Dividends per share (shareholder return)	FY2024–2025 DOE around 5%	220 yen	220 yen	230 yen	DOE around 5%	—
(DOE)	—	(5.5%)	(5.1%)	(4.9%)	—	—
(Dividend payout ratio)	—	(70.1%)	(49.5%)	(37.7%)	—	—

Investment Plan and Corporate Value

Under the Medium-Term Management Plan 2025, cumulative investment for FY2023 to FY2025 totalled 1,010 (100 million yen), of which overseas investment was 440, against a three-year plan of 1,100. Recovery totalled 550 (of which overseas 130) against a plan of 400, leaving net investment of 460 (of which overseas 310) against a plan of 700. On corporate value, the price book value ratio (PBR) was 1.16 as of March 31, 2026, based on a stock price of 5,719 yen and net assets per share of 4,936 yen, compared with 1.10 a year earlier and 1.04 as of March 31, 2024. ROE was 13.11% for the fiscal year ended March 31, 2026, against 10.29% for the fiscal year ended March 31, 2025 and 7.80% for the fiscal year ended March 31, 2024, and the price earnings ratio (PER) was 9.38x based on basic earnings per share of 609.56 yen.

Topics

The company has newly formulated Nishimatsu-Vision 2035 and the Medium-Term Management Plan 2028, aiming to further expand the scale and scope of its core domestic construction business and to build a next-generation growth foundation centred on the international business and the environment and urban business through proactive investment and M&As, with the goal of becoming the “Most Attractive General Contractor”. From April 2026, the Asset Value-Added Business Division and the Regional Environmental Solutions Business Division will be integrated to establish the Environment and Urban Development Division. Regarding its cooperation with Itochu Corporation, the company reports joint projects in and outside Japan in real estate development, the renewable energy business and infrastructure PPP projects, with tangible synergistic effects. Other topics disclosed include participation in the “Yamaguchi small-scale hydroelectric power generation business” planned for Itsuki Village, Kuma District, Kumamoto Prefecture, which will generate 1,103 MWh annually of renewable energy; additional fire resistance certification for 90 minutes and 150 minutes for META WOOD, a fire-resistant wooden material; selection as an environmentally sustainable company at the 7th ESG Finance Award Japan; an “A-” CDP climate change score; and recognition in the Large Enterprise Category (White 500) under the 2026 Outstanding Organizations of KENKO Investment for Health.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.