Daiwa House Industry (1925): FY2025 Results Summary — 7th Mid-Term Plan Targets Cleared a Year Early

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This summary is based on Daiwa House Industry’s “Consolidated Financial Results for the Fiscal Year Ended March 31, 2026” (kessan tanshin), supplemented by the company’s “FY2025 Presentation on Management Policies” dated May 18, 2026. Per japan-equity.com convention, FY2025 in this article refers to the fiscal year ended March 31, 2026, consistent with the company’s own FY2025 labeling in the source materials. For the fiscal year, Daiwa House recorded consolidated net sales of 5,576,861 million yen (+2.6% year on year), operating income of 614,879 million yen (+12.6%), and net income attributable to owners of the parent of 350,568 million yen (+7.8%). The company states that it achieved its net sales and operating income targets for the 7th Medium-Term Management Plan one year ahead of the original final-year schedule of the fiscal year ending March 31, 2027.

Consolidated Results (Full-Year Actual)

Full-year consolidated results for the fiscal year ended March 31, 2026, compared with the previous fiscal year, were as follows:

Item	FY2025 (ended Mar. 2026)	FY2024 (ended Mar. 2025)	Change
Net sales	5,576,861 million yen	5,434,819 million yen	+2.6%
Operating income	614,879 million yen	546,279 million yen	+12.6%
Ordinary income	571,971 million yen	515,985 million yen	+10.9%
Net income attributable to owners of the parent	350,568 million yen	325,058 million yen	+7.8%
Basic net income per share	566.47 yen	514.00 yen	―
ROE	12.7%	12.9%	―

Operating income for FY2025 included a 115,675 million yen gain from amortization of actuarial differences for retirement benefits. Excluding this effect, operating income was 499,203 million yen (+12.2% year on year). Total assets increased to 8,412,419 million yen and net assets increased to 3,022,275 million yen; the debt-equity ratio was 1.06 times (0.98 times after taking hybrid financing into account). In March 2026, the Company acquired shares of Sumitomo Densetsu Co., Ltd., making it a consolidated subsidiary.

Segment Results

Results by reportable business segment for FY2025 (ended March 2026), compared with FY2024 (ended March 2025), were as follows. Single-Family Houses net sales rose 17.3% year on year and operating income rose 123.0%, supported by higher domestic sales of custom-built and built-for-sale housing including “Smart Made Housing,” as well as higher overseas orders and deliveries and a large-scale U.S. land sale in October 2025. Rental Housing net sales rose 3.9% and operating income rose 8.6%. Condominiums net sales rose 3.8% while operating income fell 45.1%, mainly due to a year-on-year decrease in the number of condominium units delivered. Commercial Facilities net sales rose 5.1% and operating income rose 11.4%. Logistics, Business & Corporate Facilities net sales fell 13.1% and operating income fell 20.0%, mainly due to a decrease in sales of development properties. Environment and Energy net sales rose 1.5% and operating income rose 11.4%.

Segment	Metric	FY2025 (ended Mar. 2026)	FY2024 (ended Mar. 2025)
Single-Family Houses	Net sales	1,342,252 million yen	1,144,505 million yen
Single-Family Houses	Operating income	155,696 million yen	69,826 million yen
Rental Housing	Net sales	1,429,273 million yen	1,376,089 million yen
Rental Housing	Operating income	141,142 million yen	129,960 million yen
Condominiums	Net sales	279,622 million yen	269,427 million yen
Condominiums	Operating income	5,993 million yen	10,908 million yen
Commercial Facilities	Net sales	1,290,192 million yen	1,227,145 million yen
Commercial Facilities	Operating income	162,492 million yen	145,928 million yen
Logistics, Business & Corporate Facilities	Net sales	1,189,808 million yen	1,369,730 million yen
Logistics, Business & Corporate Facilities	Operating income	127,645 million yen	159,655 million yen
Environment and Energy	Net sales	133,136 million yen	131,180 million yen
Environment and Energy	Operating income	13,835 million yen	12,420 million yen
Other Businesses	Net sales	55,835 million yen	50,918 million yen
Other Businesses	Operating income	4,204 million yen	2,840 million yen

The Presentation on Management Policies separately tracks net sales by key revenue model rather than by reporting segment. Over the 7th Plan period (FY2021 to FY2025), net sales grew as follows: Construction business from ¥2,795.1 billion to ¥3,511.6 billion (+26%); Sale of development properties from ¥290.0 billion to ¥333.7 billion (+15%); Recurring-revenue business from ¥1,410.9 billion to ¥1,818.9 billion (+29%); and Overseas business from ¥445.1 billion to ¥1,028.4 billion (+131%). The company notes that sales in the sale of development properties category were deferred in FY2025 due to a large-scale land transaction by its U.S. subsidiary. Within Overseas business, U.S. Single-Family Houses total land holdings (including controlled lots) grew 47%, from 50,933 lots at the end of December 2021 to 75,017 lots at the end of December 2025.

FY2026 Forecast

For the fiscal year ending March 31, 2027, the Company’s forecast assumes that the situation in the Middle East stabilizes to a certain extent by around September 2026, and factors in cost increases from rising prices of construction materials and equipment and the impact of construction delays. The Company has decided to postpone the announcement of the 8th Medium-Term Management Plan, originally scheduled to start in this fiscal year, to allow time to assess the business environment outlook.

Item	FY2026 Forecast	FY2025 (Actual)
Net sales	5,800,000 million yen (+4.0%)	5,576,861 million yen
Operating income	400,000 million yen (-34.9%)	614,879 million yen
Ordinary income	342,000 million yen (-40.2%)	571,971 million yen
Net income attributable to owners of the parent	227,000 million yen (-35.2%)	350,568 million yen
Basic net income per share	183.26 yen (post stock-split basis)	566.47 yen

Amortization of actuarial differences for retirement benefits is not expected in the FY2026 operating income forecast. On a comparable basis excluding this effect from the FY2025 results, the year-on-year changes are: operating income -19.9%, ordinary income -25.0%, and net income attributable to owners of the parent -16.4%. Capital investment is forecast at 500,000 million yen and depreciation at 160,000 million yen.

Shareholder Returns

For FY2025 (ended March 2026), the Company paid an annual dividend per share of 175.00 yen (interim 75.00 yen, fiscal year-end 100.00 yen), comprising an ordinary dividend of 165.00 yen and a 70th-anniversary commemorative dividend of 10.00 yen. Total annual dividends were 108,340 million yen, for a consolidated dividend payout ratio of 30.9% and a dividends-to-net-assets ratio of 3.9%, versus an annual dividend of 150.00 yen per share, total dividends of 93,936 million yen, a payout ratio of 29.2%, and a dividends-to-net-assets ratio of 3.7% in FY2024. (Separately, the Presentation on Management Policies shows a dividend payout ratio of 39.9% for FY2025, which per its own footnote is calculated based on net income excluding the effects of actuarial differences related to retirement benefit obligations.) For FY2026 (ending March 2027), the Company forecasts an interim dividend of 86.00 yen and a fiscal year-end dividend of 45.00 yen (post stock-split basis), with a forecast consolidated payout ratio of 48.0%. At a meeting of its Board of Directors on May 13, 2026, the Company resolved a two-for-one stock split of its common stock, with September 30, 2026 as the record date and October 1, 2026 as the effective date; if the stock split were not taken into account, the FY2026 fiscal year-end dividend per share would be 90.00 yen and the annual dividend per share would be 176.00 yen.

Medium-Term Plan / Topics

The company states that the 7th Medium-Term Management Plan (FY2022-FY2025) was completed one year ahead of schedule. Initial 7th Plan targets, compared with FY2025 results as shown in the Presentation on Management Policies, were as follows:

Item	Initial Targets (7th Plan)	FY2025 Results
Net sales	¥5 trillion 500.0 billion	¥5 trillion 576.8 billion
Operating income	¥500.0 billion	¥614.8 billion
Net income	¥340.0 billion	¥350.5 billion
ROE	13% or higher	12.7%
Dividend payout ratio (Dividend per share)*	35% or higher (¥130 or higher)	39.9% (¥175)
Debt-equity ratio	Around 0.6 times	0.98 times

*Per the Presentation’s footnote, this dividend payout ratio is calculated based on net income excluding the effects of actuarial differences related to retirement benefit obligations; see the Shareholder Returns section above for the payout ratio as reported in the kessan tanshin. P.4 of the Presentation separately states the operating income target with the wording “¥500 billion (OP margin: 9.1%)”.

The Data Center Business Division was launched in April FY2026. The company is deploying its “Module DPDC” nationwide and expanding initiatives in semiconductor-related facilities, including projects such as the Tohoku Production and Logistics Center for Tokyo Electron Technology Solutions Ltd.

Sumitomo Densetsu Co., Ltd., which became part of the Group (consolidated in March 2026), will change its name to “SEMLINKS Co., Ltd.” effective October 1, 2026. The company plans to build new strengths by leveraging collaboration between Sumitomo Densetsu and the Group in data centers and semiconductor-related facilities, with measures to strengthen sales in growth areas such as renewable energy generation and data centers in Japan and overseas, strengthen sales for Southeast Asia, and enhance on-site construction capabilities through DX and technical centers across Southeast Asia.

The company is also expanding its overseas portfolio through socially impactful businesses, including a refugee housing project in Naarden, Netherlands, and the TICAD Industrial Human Resource Development Center in Ethiopia, with expansion into Eastern Europe and Africa. Some of these projects have been selected as subsidy recipients under Japan’s Ministry of Economy, Trade and Industry FY2024 supplementary program.

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.