Kyokuto Kaihatsu Kogyo (7226): FY2025 Results Summary — Record Sales, Profit Hit by Antimonopoly Surcharge

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

Kyokuto Kaihatsu Kogyo Co., Ltd. (TSE Prime: 7226), a manufacturer of special purpose vehicles, environmental equipment and systems, and car parking systems, reported record-high net sales for FY2025. Net sales rose 14.9% year on year to 161,332 million yen and operating profit increased 33.4% to 8,877 million yen, helped by accelerated effects of product price revisions. Profit attributable to owners of parent, however, declined 36.6% to 3,692 million yen due to the payment of a surcharge under the Antimonopoly Act, despite the recording of gains on the sale of cross-shareholdings.

Note: In the company’s presentation, FY2025 refers to the fiscal year ended March 31, 2026, and FY2026 to the fiscal year ending March 31, 2027. Figures are presented as reported in the materials.

Consolidated Results (Full-Year Actual)

Net sales reached a record high, and operating profit improved due to accelerated effects of product price revisions. In the Special Purpose Vehicles business, orders received grew 8.0% to 120,628 million yen and order backlogs expanded 13.3% to 108,010 million yen — both tracked separately from net sales.

Item (Millions of yen)	FY2024	FY2025	Change	Percentage
Net sales	140,449	161,332	+ 20,882	+14.9%
Operating profit	6,656	8,877	+ 2,221	+33.4%
Ordinary profit	6,890	9,478	+ 2,587	+37.5%
Profit attributable to owners of parent	5,820	3,692	(2,128)	(36.6%)
Special Purpose Vehicles Business: Orders Received	111,644	120,628	+ 8,984	+8.0%
Special Purpose Vehicles Business: Order Backlogs	95,309	108,010	+ 12,701	+13.3%

Segment Results

Revenue and profit increased in all segments, and net sales reached record highs in all segments. In the Special Purpose Vehicles business, overseas sales were sluggish, but sales in Japan recovered due to product price revisions and productivity improvements; in Australia, weak market conditions due to lingering effects of adverse weather impacted overseas performance, while in India the Chennai Plant completed in February 2026 became fully operational and achieved a record monthly sales volume. The Environmental Equipment and Systems business recorded record-high operating profit on contributions from plant construction, and in the Car Parking Systems business the pay-and-display parking utilization rate increased due to the Expo, car travel amid heat waves, and increased swimming pool demand.

Segment (Millions of yen)	Metric	FY2024	FY2025	Change (YoY)
Special Purpose Vehicles	Net sales	118,708	135,265	+13.9%
— Overseas figures	Net sales	12,080	18,028	+49.2%
Environmental Equipment and Systems	Net sales	14,193	18,077	+27.4%
Car Parking Systems	Net sales	8,187	8,638	+5.5%
Total (consolidated)	Net sales	140,449	161,332	+14.9%
Special Purpose Vehicles	Operating profit	4,676	6,298	+34.7%
— Overseas figures	Operating profit	488	(226)	–
Environmental Equipment and Systems	Operating profit	2,772	3,334	+20.3%
Car Parking Systems	Operating profit	847	965	+14.0%
Total (consolidated)	Operating profit	6,656	8,877	+33.4%

In the Special Purpose Vehicles business, both orders and backlogs remained at high levels: as of March 31, backlogs were approximately 54,113 million yen at KYOKUTO and approximately 53,897 million yen at TREX, for a total of approximately 108,010 million yen. Domestic trailer registrations increased 101.3% year on year to 7,576 units against the backdrop of driver shortages stemming from the 2024 logistics problem.

FY2026 Forecast

For FY2026, the company forecasts net sales of 180,000 million yen (+11.6%), operating profit of 8,500 million yen ((4.3%)), ordinary profit of 7,900 million yen ((16.6%)), and profit attributable to owners of parent of 5,000 million yen (+35.4%). The company also notes that tensions in the Middle East have made the procurement of coating materials uncertain, affecting the production and supply of some products and parts across its businesses (press release of April 10, 2026); it states that it is difficult to make a clear forecast at this time and that it will carefully examine the impact on business performance for the fiscal year ending March 31, 2027.

Item (Millions of yen)	FY2025 (Results)	FY2026 (Forecast)	Change	Percentage
Net sales	161,332	180,000	+ 18,668	+11.6%
Operating profit	8,877	8,500	(377)	(4.3%)
Ordinary profit	9,478	7,900	(1,578)	(16.6%)
Profit attributable to owners of parent	3,692	5,000	+ 1,308	+35.4%

By segment, Special Purpose Vehicles sales are forecast at 147,700 million yen (+9.2% versus the previous period) with operating profit of 6,800 million yen (+8.0%), and Environmental Equipment and Systems sales at 24,500 million yen (+35.5%) with operating profit of 2,700 million yen ((19.0%)). For the Car Parking Systems business, non-parking revenues previously included in the segment are excluded from the fiscal year ending March 31, 2027, and prior-year results have been retroactively adjusted on the same basis for comparison; on that basis, sales are forecast at 7,000 million yen ((2.7%) versus restated FY2025 sales of 7,197 million yen) with operating profit of 700 million yen ((1.4%) versus a restated 710 million yen).

Segment (Millions of yen)	FY2025	FY2026 (Forecast)	Compared to previous period
Special Purpose Vehicles: Net sales	135,265	147,700	+9.2%
Special Purpose Vehicles: Operating profit	6,298	6,800	+8.0%
Environmental Equipment and Systems: Net sales	18,077	24,500	+35.5%
Environmental Equipment and Systems: Operating profit	3,334	2,700	(19.0%)
Car Parking Systems: Net sales (restated basis)	7,197	7,000	(2.7%)
Car Parking Systems: Operating profit (restated basis)	710	700	(1.4%)

Disposition by the Japan Fair Trade Commission

The company and its subsidiary NIPPON TREX Co., Ltd. were subjected to an on-site inspection by the Japan Fair Trade Commission (JFTC) on November 12, 2024, on suspicion of forming a cartel regarding the sale of the “upper bodies” they manufacture, and on September 25, 2025 received a cease and desist order and a surcharge payment order based on the Antimonopoly Act. The surcharge of 5,925 million yen (2,601 million yen for the company and 3,323 million yen for NIPPON TREX) has already been paid and was recorded as extraordinary losses in the financial statements for FY2025. Citing differences of opinion with the JFTC on the findings of fact and legal interpretation, both companies filed a lawsuit seeking a reduction of the surcharge (press release of March 17, 2026). The company lists recurrence prevention measures — including a risk management committee chaired by the Representative Director, President, CEO established in March 2026 — as largely completed, and its Board resolved to shift to a company with an audit and supervisory committee, subject to approval at the 91st Ordinary General Meeting of Shareholders to be held in June 2026.

Shareholder Returns

For FY2026, the company forecasts a dividend per share of 120 yen (interim dividend of 60 yen and year-end dividend of 60 yen), with DOE of approximately 4.0% (estimated, calculated based on the consolidated balance sheets as of March 31, 2026). Under the Medium-term Management Plan 2025–27, the dividend policy is a stable profit return with a DOE (Dividend on Equity Ratio) of 4% or more.

Medium-Term Management Plan 2025–27

Against FY2025 results of net sales of 161.3 billion yen, an operating profit ratio of 5.5%, and ROE of 3.2%, the plan targets net sales of 190 billion yen, an operating profit ratio of 8%, and ROE of 8% for FY2027, and net sales of 200 billion yen with an operating profit ratio and ROE of 10% under the Long-Term Management Vision. The plan calls for growth investment of 30 billion yen and new M&A investment of 10 billion yen; actual capital expenditures for FY2025 were 12,602 million yen, including the land for the Group Technical Center, the new Seibu Parts Center, and the SATRAC Chennai Plant in India. The company has continued product price revisions since FY2022 and has reduced cross-shareholdings by 27 stocks since the end of March 2018, with sales of approximately 11 billion yen at market value at the time of sale. It also plans to reorganize its three main plants (Yokohama, Nagoya, and Miki) in phases through FY2027.

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.