TEKKEN CORPORATION (1815): FY2025 Results Summary — Operating Profit Up 62.5%, Order Backlog at a 10-Year High

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

Note: TEKKEN CORPORATION’s fiscal year ends in March. The latest completed fiscal year, classified as FY2025 in this site’s title and URL, is the fiscal year ended March 31, 2026, which the presentation labels “FY3/2026” (and, in the Medium-Term Management Plan pages, “FY2025”); the body text, tables and segment data below retain the source’s own period labels. Unless otherwise noted, amounts are in units of 100 million yen, as presented in the materials.

TEKKEN CORPORATION reported net sales of 179.8bn yen for FY3/2026, down 2.9% year on year, as overseas construction declined and there was a reactionary decline from the previous fiscal year. Profit rose at every level: operating profit increased 62.5% to 5.6bn yen on design change orders secured in Civil Engineering and improved profitability in Architectural Construction, ordinary profit rose 94.1% to 5,873 million yen helped by investment profit from silent partnerships, and net profit attributable to owners of parent rose 46.7% to 5,029 million yen. Orders received on a non-consolidated basis rose to 225,654 million yen and construction work carried forward reached its highest level in the past 10 years. The annual dividend was 170yen per share, and alongside the results the company updated its Medium-Term Management Plan 2028, raising its FY2028 operating profit target to 11.0 billion yen or more and its ROE target to 10.0% or more.

Consolidated Results (Full-Year Actual)

Net sales decreased due to a decrease in overseas construction and the reactionary decline from the previous fiscal year, etc. Gross profit rose to 17.4 billion yen with the gross profit margin improving to 9.7% from 8.0%. Operating profit increased due to securing design change orders in Civil Engineering and improved profitability in Architectural Construction. Ordinary profit increased due to the recording of investment profit from silent partnerships, etc., and profit attributable to owners of the parent increased due to higher operating profit and higher ordinary profit.

Item (100 million yen)	FY3/2024 Results	FY3/2025 Results	FY3/2026 Results	YoY Change	YoY %
Net sales	1,835	1,851	1,798	-52	-2.9
Gross profit [Gross profit margin]	119 [6.5%]	148 [8.0%]	174 [9.7%]	+26	+17.6
Operating profit [Operating profit margin]	9 [0.5%]	34 [1.9%]	56 [3.1%]	+21	+62.5
Ordinary profit [Ordinary profit margin]	22 [1.2%]	30 [1.6%]	58 [3.3%]	+28	+94.1
Net profit attributable to owners of parent	42	34	50	+16	+46.7

Below the operating line, the materials break out the year-on-year movements in million yen. The non-operating balance was 2.0 billion yen (non-operating profit 1.6 billion yen, non-operating expenses 1.4 billion yen) and the extraordinary income/loss balance was 1.6 billion yen (extraordinary income 2.8 billion yen, extraordinary losses 1.2 billion yen). Non-operating profit rose on an increase in investment profit from silent partnerships of 519, an increase in dividends received, etc. of 262, and an increase in foreign exchange gains of 44; extraordinary losses rose on an increase in impairment loss of 685 and settlement payments of 116.

Item (million yen)	FY3/2025	FY3/2026	Change
Operating profit	3,459	5,622	+2,162
Non-operating profit	820	1,672	+852
Non-operating expenses	1,254	1,420	+166
Ordinary profit	3,026	5,873	+2,847
Extraordinary income	2,714	2,899	+185
Extraordinary losses	778	1,291	+512
Profit before income taxes	4,961	7,482	+2,521
Taxes and other expenses	1,525	2,432	+907
Profit attributable to non-controlling interests	7	20	+13
Net profit attributable to owners of parent	3,429	5,029	+1,600

Segment Results

In Civil Engineering, net sales increased due to steady progress in work on hand, and gross profit increased due to securing design change orders, etc. In Architecture Construction, net sales decreased due to the reactionary decline from the previous fiscal year, while gross profit increased due to securing design change orders and a decrease in low-profit construction projects, etc. In Real Estate, net sales and gross profit increased due to the sale of four properties. By composition of net sales, Civil Engineering accounted for 50.7%, Architecture Construction 46.3% and Real Estate, etc. 3.0% in FY3/2026.

Segment (100 million yen)	Metric	FY3/2024	FY3/2025	FY3/2026	YoY
Civil Engineering	Net sales	919	890	911	+21
Architecture Construction	Net sales	879	908	832	-76
Real Estate, etc.	Net sales	36	52	54	+2
Total	Net sales	1,835	1,851	1,798	-52
Civil Engineering	Gross profit [margin]	94 (10.3%)	92 (10.4%)	98 (10.8%)	+5
Architecture Construction	Gross profit [margin]	16 (1.9%)	42 (4.7%)	61 (7.3%)	+18
Real Estate, etc.	Gross profit [margin]	8 (22.4%)	13 (32.4%)	15 (28.1%)	+1
Total	Gross profit [margin]	119 (6.5%)	148 (8.0%)	174 (9.7%)	+26

Orders Received and Construction Work Carried Forward (Non-Consolidated)

Orders received increased significantly due to orders for large-scale tunnel construction, housing construction, etc. Completed construction contracts decreased due to a decrease in overseas construction and the reactionary decline from the previous fiscal year, etc., but progressed generally as planned. Construction work carried forward reached its highest level in the past 10 years, driven by steady orders. Major Civil Engineering projects ordered through the full year totalled 115.9 billion yen and major Architecture Construction projects totalled 109.7 billion yen.

Item (100 million yen)	FY3/2024	FY3/2025	FY3/2026
Carryover from the previous period	2,669	2,770	2,804
Orders received	1,900	1,832	2,256
Completed construction contracts	1,799	1,798	1,743
Construction work carried forward	2,770	2,804	3,316

FY3/2027 Forecast

Net sales are expected to increase, as progress in work on hand is proceeding as planned, and due to the planned sale of a large-scale project in the Real Estate business. Operating profit and profit attributable to owners of the parent are expected to increase, as profitability is improving due to an increase in net sales and the strengthening of the on-site support system for architectural construction projects, etc. The scheduled dividend is 223 yen per share.

Item (100 million yen)	FY3/2025 Results	FY3/2026 Results	FY3/2027 Forecast
Net sales	1,851	1,798	1,850
Operating profit	34	56	66
(Operating profit margin)	(1.9%)	(3.1%)	(3.6%)
Ordinary profit	30	58	57
Net profit attributable to owners of parent	34	50	63
Dividend per share	122yen	170yen	223yen
Construction work carried over from the previous period	2,770	2,804	3,316
Orders received	1,832	2,256	1,810
Completed construction contracts	1,798	1,743	1,766
Construction work carried forward	2,804	3,316	3,360

Shareholder Returns

Before the update, enhanced shareholder returns were implemented through a “dividend payout ratio of 50%” and “progressive dividends.” The company will update the financial strategy going forward and introduce DOE (dividend on equity ratio) beginning with dividends for FY2026 in order to realize both further stable dividends and growth investment. The updated policy is a guideline of DOE of 4% or higher for dividends, with acquisition of treasury stock implemented flexibly; DOE (%) is defined as total dividends divided by equity capital multiplied by 100. Dividends per share have risen from 80yen for FY2021 and FY2022 to 100yen for FY2023, 122yen for FY2024 and 170yen for FY2025, with 223yen forecast for FY2026, taking DOE from 1.9% to 3.2% for FY2025 and 4.0% or more from FY2026. Cash allocation over the five years FY2024–FY2028 includes shareholder returns of 15.0 billion yen against an investment plan of 25.5 billion yen.

Fiscal Year	Dividend per share (yen)	DOE
2021	80yen	1.9%
2022	80yen	1.9%
2023	100yen	2.2%
2024	122yen	2.4%
2025	170yen	3.2%
2026	223yen (Forecast)	4.0%or more

Medium-Term Management Plan 2028 Update

Since FY2024 the TEKKEN Group has been promoting “Medium-Term Management Plan 2028: ‘Toward a Company We Can Be Proud Of’ – Challenge toward a Sustainable Future Society –.” Upon reviewing the Plan at the end of FY2025, the second year of the plan, the earning power of each business was progressing at a pace exceeding initial assumptions and profit targets were achieved one year ahead of schedule. Taking this and the rise in the cost of shareholders’ equity into account, the company determined that it was necessary to review the numerical targets, and it also formulated a Purpose, “Keeping Cities Moving Forward,” together with a “100th Anniversary Dream” for 2044. Financial KPIs were raised: ROE to 10.0% or more for FY2028 (previous target 8.0%) and 7.5% or more for FY2026, and consolidated operating profit to 11.0 billion yen or more for FY2028 and 6.6 billion yen or more for FY2026. The cost of shareholders’ equity is put at approximately 7.5%, updated to approximately 8.0%. Non-financial KPIs are unchanged, including CO2 emissions of -32% for Scope1+2 and -20% for Scope3 versus FY2022 by FY2028, zero fatalities and serious accidents each fiscal year, and continuous improvement in the employee engagement score.

Item	FY2024 Results	FY2025 Results	FY2026 Plan (after update)	FY2028 Plan (after update)
Net sales	185.1bn yen	179.8bn yen	185.0bn yen	212.0bn yen
Civil Engineering	89.0bn yen	91.1bn yen	93.8bn yen	100.0bn yen
Architectural Construction	90.8bn yen	83.2bn yen	82.8bn yen	100.0bn yen
Real Estate and New Businesses, etc.	5.2bn yen	5.4bn yen	8.4bn yen	12.0bn yen
Gross profit	14.8bn yen	17.4bn yen	19.4bn yen	24.2bn yen
Operating profit	3.4bn yen	5.6bn yen	6.6bn yen or more	11.0bn yen or more
ROE	4.8%	6.8%	7.5% or more	10.0% or more
Equity ratio	31.0%	30.6%	30% or more	30% or more
Shareholder return	50.3%	47.1%	DOE : guideline of 4% or more	DOE : guideline of 4% or more

Investment over the five years FY2024–FY2028 comprises business strategy investment of 17.0 billion yen (technology development investment 7.0 billion yen, business development investment 10.0 billion yen) and foundational strategy investment of 8.5 billion yen (DX investment 7.0 billion yen, human resource and organizational investment 1.5 billion yen). On the cash-in side the plan assumes operating profit of 34.0 billion yen or more, depreciation of 4.0 billion yen and asset sales of 15.0 billion yen or more, with policy shareholdings sold totalling 10.0 billion yen or more and reduced to less than 20% of net assets. Financial discipline targets are an equity ratio of 30% or more and a D/E ratio of a maximum of 0.8 times at the end of each fiscal year, with a long-term image of 35–40% and approximately 0.5 times.

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.