KRAFTIA CORPORATION (1959): FY2025 Results Summary — Record Profits on Sharply Improved Construction Margins

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

KRAFTIA CORPORATION, the Fukuoka-based electrical and HVAC contractor formerly known as Kyudenko, closed the fiscal year ended March 31, 2026 with net sales of 476,123 million yen and operating income of 54,600 million yen, up 31.9% year on year. Ordinary income rose 30.9% to 58,157 million yen and profit attributable to owners of parent rose 38.7% to 40,053 million yen, with every one of those lines flagged in the presentation as a record high. All five profit and loss lines also came in above the figures the company published on January 30, 2026. The annual dividend was raised to 220 yen per share, and management plans a further increase in net sales to 500,000 million yen for the fiscal year ending March 31, 2027.

Note: this article follows japan-equity.com’s site-wide convention of classifying the most recent completed fiscal year as “FY2025” in the headline and slug. KRAFTIA labels the same year “FY March 2026” (or “FY 2026”) and its forecast year “FY March 2027”; the company’s own labels are retained throughout the body text, tables and captions below. The source document is the company’s English-language presentation “FY ending March 2026 Result Briefing” dated May 14, 2026.

Consolidated Results (FY March 2026 Actual)

Net sales edged up by 2,169 million yen, but gross profit expanded by 16,372 million yen as the gross margin improved from 14.9% to 18.3%. The operating margin rose from 8.7% to 11.5% and the ordinary income margin from 9.4% to 12.2%. Orders received grew 6.0% to 479,014 million yen and construction on hand reached 476,049 million yen, up 4.8%. In the presentation, net sales, gross profit, operating income, ordinary income, profit attributable to owners of parent and construction on hand are all marked in red as record highs.

Item (Millions of yen)	March 2026 Result	March 2025 Result	Increase/decrease	Percentage increase/decrease	Published value (2026.01.30)
Net sales	476,123 (100.0%)	473,954 (100.0%)	+2,169	+0.2%	475,000 (100.0%)
Gross profit	87,074 (18.3%)	70,701 (14.9%)	+16,372	+23.2%	84,500 (17.8%)
Operating income	54,600 (11.5%)	41,388 (8.7%)	+13,212	+31.9%	51,500 (10.8%)
Ordinary income	58,157 (12.2%)	44,434 (9.4%)	+13,722	+30.9%	55,000 (11.6%)
Profit attributable to owners of parent	40,053 (8.4%)	28,883 (6.1%)	+11,169	+38.7%	36,000 (7.6%)
Orders	479,014	452,113	+26,901	+6.0%	485,000
Construction on hand	476,049	454,059	+21,990	+4.8%	–

The bridge analysis of operating profit presents the move from 41.4 billion yen in March 2025 to 54.6 billion yen in March 2026 in billions of yen, with an improvement in profit margin contributing +15.4 and increases in SG&A expenses contributing -3.1, alongside a decrease in sales of -0.3, power distribution line work of +1.3 and other business of -0.1.

Sales, Orders and Backlog by Division

Electrical work remained the largest division on both sales and orders, and it was the driver of order growth in the year: orders for electrical work reached 259,983 million yen against 206,285 million yen a year earlier. HVAC work sales slipped to 162,356 million yen from 164,934 million yen, and solar plant construction work fell on both measures, with orders of 3,739 million yen against 17,675 million yen in the prior year.

Division (Millions of yen)	Sales March 2026	Sales March 2025	Orders March 2026	Orders March 2025
Power distribution line work	56,595	51,380	56,716	52,714
Electrical work	208,253	200,257	259,983	206,285
HVAC work	162,356	164,934	158,575	175,439
Solar plant construction work	30,319	37,802	3,739	17,675

Construction backlog at the end of March 2026 was 4,760 million yen for power distribution line work, 236,908 million yen for electrical work, 157,589 million yen for HVAC work and 76,790 million yen for solar plant construction work, against 4,640 million yen, 185,178 million yen, 160,870 million yen and 103,371 million yen respectively at the end of March 2025.

On a non-consolidated basis excluding distribution lines and Ukujima, construction sales were 318,966 million yen in the year ended March 2026 against 327,710 million yen in the prior year, and the average profit ratio on construction contracts of 100 million yen or more with a construction period of more than six months rose to 28.6% from 28.0%.

Balance Sheet

Total assets increased by 34,796 million yen to 523,268 million yen. Current assets were broadly flat at 298,303 million yen (57.0% of total assets), with cash on hand and in banks down 19,753 million yen and notes and accounts receivable up 13,940 million yen. Fixed assets rose 35,762 million yen to 224,965 million yen, mainly on investment securities (+17,718 million yen) and retirement benefit asset (+6,156 million yen). Total liabilities fell 4,695 million yen to 171,624 million yen, and total net assets rose 39,491 million yen to 351,644 million yen, equivalent to 67.2% of total liabilities and net assets. Shareholders’ equity increased 28,017 million yen, reflecting net income of 40,053 million yen against dividend payments of 11,692 million yen.

Ukujima Solar Power Plant

The presentation devotes a dedicated section to the Ukujima Solar Power Plant, a project with power output of 480MW and a panel installation area of approximately 280ha — roughly one-tenth of the entire island of Ukujima — designed to generate approximately 515,000 MWh a year, equivalent to approximately 173,000 households. AC power generated at Ukujima and Terashima is to be converted to DC and transmitted by submarine cable to Kyushu Electric Power Company’s transmission and distribution substation in Sasebo.

The building for the Ukujima HVDC converter station has been completed and work is under way to deliver and install the HVDC system equipment. In July 2025 the SPC obtained permission from Sasebo City to occupy city-administered waters, and discussions continue with Nagasaki Prefecture over prefecture-administered waters; an application to the Japan Coast Guard will follow before submarine cable laying begins. The land lease agreement for the Sasebo-side HVDC building has been finalized. Construction on Ukujima, accounting for approximately 70% of the total project, is progressing, but the company states the project is behind the originally targeted completion date of March 2027, while the outlook toward completion has become clearer following the land contract for the Sasebo-side HVDC building. The delayed start of power sales raises concerns about profitability given the shortening of the FIT period ending in September 2040, and the company is considering new schemes including a transition to the FIP scheme and the use of corporate PPAs. Discussions with the SPC over cost increases are under way, and recovery of outstanding construction payments is expected each time the SPC secures funding.

Published Figures for FY March 2027

For the fiscal year ending March 31, 2027 the company published a plan for net sales of 500,000 million yen (+5.0%), gross profit of 91,500 million yen (+5.1%), operating income of 55,500 million yen (+1.6%), ordinary income of 59,000 million yen (+1.4%) and profit attributable to owners of parent of 40,500 million yen (+1.1%). Orders are planned at 495,000 million yen (+3.3%) and earnings per share at 572.56 yen.

Item (Millions of yen)	Plan for March 2027	March 2026 Result	Difference	Percentage increase/decrease
Net sales	500,000 (100.0%)	476,123 (100.0%)	+23,876	+5.0%
Gross profit	91,500 (18.3%)	87,074 (18.3%)	+4,425	+5.1%
Operating income	55,500 (11.1%)	54,600 (11.5%)	+899	+1.6%
Ordinary income	59,000 (11.8%)	58,157 (12.2%)	+842	+1.4%
Profit attributable to owners of parent	40,500 (8.1%)	40,053 (8.4%)	+446	+1.1%
Orders	495,000	479,014	+15,985	+3.3%
Earnings per share	572.56 yen	566.25 yen	–	–

By division, the plan for the year ending March 2027 calls for sales of 59,500 million yen in power distribution line work, 221,000 million yen in electrical work, 167,000 million yen in HVAC work and 34,000 million yen in solar plant construction work, and orders of 60,500 million yen, 260,000 million yen, 169,000 million yen and 5,500 million yen respectively.

Shareholder Returns

The annual dividend for the fiscal year ended March 2026 was set at 220 yen per share, made up of an interim dividend of 90 yen and a year-end dividend of 130 yen, against 140 yen (interim 65 yen, year-end 75 yen) in the prior year. The corresponding consolidated payout ratio is 38.9%. For the fiscal year ending March 2027 the company plans an annual dividend of 220 yen (interim 110 yen, year-end 110 yen), with a payout ratio of 38.4% shown in the dividend chart. The stated policy is a progressive dividend with a target consolidated dividend payout ratio of 40%. On treasury share acquisition, the company says decisions will be made while carefully monitoring share price trends and taking into account the recovery status of upfront investments in the Ukujima Project, and that a potential stock split will also be considered. The market value of policy shareholdings on a consolidated basis is shown rising to 47,024 million yen, with the percentage of policy shareholdings against consolidated net assets at 10.0%, attributed mainly to a change in market value.

Item	March 2027 (Plan)	March 2026	March 2025
Annual dividend per share	220 yen	220 yen	140 yen
Interim	110 yen	90 yen	65 yen
Year-end	110 yen	75 yen	75 yen
Consolidated payout ratio	38.4%	38.9%	34.3%
Earnings per share	572.56 yen	566.25 yen	408.36 yen

Mid-term Management Plan

The mid-term management plan sets FY2029 financial targets of consolidated ordinary profit of 60 billion yen, ROIC of 10% or higher, and total investment of 200 billion yen over the plan period, together with shareholder returns based on a consolidated dividend ratio of about 40% and a progressive dividend. ROIC is calculated using after-tax business profit, defined in the materials as after-tax ordinary income plus interest expenses.

Against those targets, FY2026 delivered consolidated ordinary profit of 58.1 billion yen and ROIC of 12.1%. The company comments that results for FY2026 are expected to significantly exceed the plan, that construction margins — particularly in electrical and HVAC works — have improved as a result of strategic order-intake activities and the strengthening of technical capabilities and productivity, and that it will consider rolling over the 60 billion yen ordinary profit figure. It also notes that, as shareholders’ equity continues to accumulate and is projected to exceed plan levels from FY2027 onward, a capital policy aligned with developments in the Ukujima Project will be required.

Investment in the year ended March 2026 totalled 24.1 billion yen against the 200 billion yen plan-period target: growth and M&A investments of 14,765 million yen, stock-business investments of 3,272 million yen, DX and R&D investments of 1,512 million yen, facility renewal of 4,185 million yen and others of 433 million yen. Planned investment amounts over the plan period are 80 billion yen each for growth and M&A investments and for stock business investments, 18 billion yen for DX and R&D, and 22 billion yen for facility updates including environmental investments. The company states that investment and exit rules have been clearly defined and that decisions are made based on hurdle rates, and that it will review the appropriate level of WACC in light of rising Japanese government bond yields, increased investor return expectations and share price fluctuations.

Non-financial FY2029 targets include a consolidated employee headcount of 12,000, an engagement score of 72 points or higher, a 50% increase in education and training expenses versus FY2024, an average income of 10 million yen for 45-year-old employees, 50 additional highly skilled professional hires, a doubling of female managers versus FY2024, a 100% male childcare leave utilization ratio, zero incidents for serious legal violations, major accidents and confidential information leaks, and a reduction of 50% or higher in Scope 1 and 2 CO2 emissions. Anticipated total expenses for human capital management during the plan period are about 50 billion yen.

Company Profile and Name Change

The materials explain that the new company name KRAFTIA combines K for Kyushu / Kyudenko, CRAFT for technology, skill and craftsmanship, and I and A for Innovation and Action, inheriting the history of Kyudenko’s founding in Kyushu. The company was established on December 1, 1944, has capital of 12,561 million yen and is listed on the Prime Market of the Tokyo Stock Exchange and the Fukuoka Stock Exchange under code 1959, with its head office in Chuo-ku, Fukuoka city and a Tokyo head office in Toshima-ku, Tokyo. It operates 13 branches in Japan, 96 sales offices and 7 overseas subsidiaries, and had 11,225 consolidated employees as of March 31, 2026. Its long-term vision phrase is “Make Next: To Create Smiles for the Future.”

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.