Shin Nippon Air Technologies (1952): FY2025 Results Summary — Record Highs Across All Key Indicators

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

Note: japan-equity.com classifies each company’s most recent completed fiscal year as FY2025; Shin Nippon Air Technologies labels this period as the fiscal year ended March 31, 2026, and every figure, table and label below follows the company’s own presentation. Shin Nippon Air Technologies Co., Ltd. (1952), an air conditioning engineering contractor, reported that all key indicators reached record highs for the year ended March 31, 2026, establishing what the company describes as a sustained growth trajectory. Net sales of completed construction contracts rose 12.5% year on year to ¥154.8 billion, operating profit rose 33.3% to ¥15.1 billion, ordinary profit rose 32.6% to ¥15.8 billion and profit attributable to owners of parent rose 25.9% to ¥12.1 billion. Orders received increased 15.5% to ¥177.7 billion and orders carried forward increased 18.2% to ¥148.7 billion.

Consolidated Results (Full-Year Actual)

The company attributes the result to the continued accumulation of orders received and orders carried forward, combined with progress in improving profitability and productivity, which enabled simultaneous expansion of net sales of completed construction contracts and profit growth. Large-scale development projects including office buildings and factory-related facilities were acquired, securing the sales foundation and growth capacity for the coming fiscal year and beyond. Improved profitability at the stage of order receipt, combined with progress in sophistication of project management and greater efficiency in the construction system, led to improved profitability. ROE was 16.0%, up 1.7pt from the prior year.

Item (Millions of yen)	Year Ended March 31, 2026	Year Ended March 31, 2025	YoY change	YoY change (%)
Orders received	177,762	153,891	23,871	15.5%
Net sales of completed construction contracts	154,884	137,684	17,199	12.5%
Gross profit on completed construction contracts	27,190	22,002	5,187	23.6%
Gross profit margin	17.6%	16.0%	1.6pt	－
Operating profit	15,128	11,346	3,782	33.3%
Operating profit margin	9.8%	8.2%	1.6pt	－
Ordinary profit	15,881	11,976	3,904	32.6%
Ordinary profit margin	10.3%	8.7%	1.6pt	－
Profit*	12,154	9,656	2,497	25.9%
Profit margin	7.8%	7.0%	0.8pt	－
Orders carried forward	148,747	125,868	22,878	18.2%
ROE	16.0%	14.3%	1.7pt	－

* “Profit” refers to profit attributable to owners of parent. On the balance sheet, total assets expanded to ¥135,391 million from ¥118,166 million, primarily due to an increase in accounts receivable from completed construction contracts associated with construction progress and an increase in investment securities. Total net assets rose to ¥82,669 million from ¥69,294 million. Operating cash flow was an increase of ¥11,621 million, investing cash flow an increase of ¥197 million, and financing cash flow a decrease of ¥5,169 million, leaving cash and cash equivalents at end of period of ¥26,869 million.

Segment Results

In the non-consolidated Japan business, large-scale development projects including office buildings and factory-related facilities drove an increase in orders received for large projects, and nuclear power-related work significantly exceeded the initial plan, resulting in non-consolidated orders received increasing 26.6% year on year. Among affiliated companies, orders received in Japan decreased as certain factory-related projects declined while the healthcare sector remained strong, and overseas affiliated companies decreased due to the reaction to large project orders in the previous fiscal year, so orders received by affiliated companies fell 27.3% year on year. On net sales of completed construction contracts, overseas affiliated companies increased on steady progress centered on data center-related construction work, offsetting the decrease in Japan, leaving affiliated companies broadly flat year on year.

Category (Millions of yen)	Metric	Year Ended March 31, 2026	Year Ended March 31, 2025	YoY
Non-consolidated Japan: General	Orders received	142,960	115,744	23.5%
Non-consolidated Japan: Nuclear power	Orders received	11,851	6,584	80.0%
Orders received, non-consolidated	Orders received	154,812	122,329	26.6%
Affiliated companies: Japan	Orders received	9,298	10,693	(13.0%)
Affiliated companies: Overseas	Orders received	13,651	20,867	(34.6%)
Orders received by affiliated companies	Orders received	22,950	31,561	(27.3%)
Orders received, consolidated	Orders received	177,762	153,891	15.5%
Non-consolidated Japan: General	Net sales of completed construction contracts	120,487	104,033	15.8%
Non-consolidated Japan: Nuclear power	Net sales of completed construction contracts	7,917	7,015	12.8%
Net sales of completed construction contracts, non-consolidated	Net sales of completed construction contracts	128,404	111,049	15.6%
Affiliated companies: Japan	Net sales of completed construction contracts	8,487	11,369	(25.3%)
Affiliated companies: Overseas	Net sales of completed construction contracts	17,991	15,266	17.9%
Net sales of completed construction contracts of affiliated companies	Net sales of completed construction contracts	26,479	26,635	(0.6%)
Net sales of completed construction contracts, consolidated	Net sales of completed construction contracts	154,884	137,684	12.5%

By demand sector and work type, consolidated orders received comprised new construction of 81,859 (up 21.5%, 46.0% of the total) and renovation of 95,903 (up 10.8%, 54.0%), with the healthcare sector at 82,877 (up 25.7%, 46.6%) and the industrial sector at 94,885 (up 7.8%, 53.4%), in millions of yen. Consolidated net sales of completed construction contracts comprised new construction of 65,145 (up 16.9%, 42.1%) and renovation of 89,738 (up 9.5%, 57.9%), with the healthcare sector at 66,820 (up 13.3%, 43.1%) and the industrial sector at 88,063 (up 11.9%, 56.9%). Orders carried forward comprised new construction of 99,334 (up 20.2%, 66.8%) and renovation of 49,412 (up 14.3%, 33.2%), with the healthcare sector at 73,120 (up 28.1%, 49.2%) and the industrial sector at 75,626 (up 9.9%, 50.8%).

Forecast for the Fiscal Year Ending March 31, 2027

For the fiscal year ending March 31, 2027, the company expects net sales of completed construction contracts to expand through steady progress on the substantial volume of orders carried forward accumulated up through the previous fiscal year, with large carried-forward construction work in Japan, the industrial sector and nuclear power-related work expected to underpin performance. In addition to the increase in net sales of completed construction contracts, progress on highly profitable projects, thorough cost management and improved productivity are expected to result in an increase across all profit categories.

Item (Millions of yen)	Year Ending March 31, 2027 (forecast)	Year Ended March 31, 2026	Change in forecast	Change in forecast (%)
Orders received	180,000	177,762	2,238	1.3%
Net sales of completed construction contracts	160,000	154,884	5,116	3.3%
Gross profit on completed construction contracts	29,000	27,190	1,810	6.7%
Gross profit margin	18.1％	17.6%	0.5pt	－
Operating profit	16,000	15,128	872	5.8%
Operating profit margin	10.0％	9.8%	0.2pt	－
Ordinary profit	16,500	15,881	1,372	3.9%
Ordinary profit margin	10.3％	10.3%	0.0pt	－
Profit*	12,800	12,154	646	5.3%
Profit margin	8.0％	7.8%	0.2pt	－
Orders carried forward	168,747	148,747	20,000	13.4%

On a category basis, orders received are forecast at 144,000 for non-consolidated Japan general work and 11,000 for nuclear power, giving non-consolidated orders received of 155,000, with affiliated companies in Japan at 9,300 and overseas at 15,700 for an affiliated total of 25,000 (in millions of yen). Net sales of completed construction contracts are forecast at 124,000 for non-consolidated Japan general work and 9,000 for nuclear power, giving a non-consolidated total of 133,000, with affiliated companies in Japan at 9,200 and overseas at 17,800 for an affiliated total of 27,000.

Shareholder Returns

The Group considers the return of profits to shareholders as one of its most important management initiatives and maintains a basic policy of profit distribution with a dividend on equity ratio (DOE) of no less than 5%. Its policy is to adopt a progressive dividend during the period of the 10-year vision and long-term management policy SNK Vision 2030, and not to reduce annual dividends during this period. For the fiscal year ended March 31, 2026, interim and year-end dividends are ¥40 and ¥70 per share respectively, bringing annual dividends to ¥110 per share, with a consolidated dividend payout ratio of 41.1% and DOE of 8.0%. For the fiscal year ending March 31, 2027, interim and year-end dividends are expected to be ¥60 and ¥60 per share respectively, bringing annual dividends to ¥120 per share, with DOE expected at 7.8%. The company notes that it conducted a 2-for-1 stock split effective January 1, 2025, and that dividends for periods prior to the split have been adjusted to reflect it.

Item (Yen)	Year Ended March 31, 2025 Results	Year Ended March 31, 2026	Year Ending March 31, 2027 Forecast
Interim dividend	30	40	60
Year-end dividend	50	70	60
Annual dividends per share, total	80	110	120
Consolidated dividend payout ratio	37.8%	41.1%	－
Dividend on equity ratio (DOE)	6.6%	8.0%	7.8%

Medium-Term Business Plan

Under Phase II (FY2023–FY2025), the company says it achieved the key management targets one year ahead of schedule, in the fiscal year ended March 31, 2025: against initial FYE 03/2026 targets of orders received of 135,000, net sales of completed construction contracts of 130,000, operating profit of 9,000 (6.9%), ordinary profit of 9,400 (7.2%), profit of 6,600 (5.1%) and ROE of 10% or more, the FYE 03/2025 results were 153,891, 137,684, 11,346 (8.2%), 11,976 (8.7%), 9,656 (7.0%) and 14.3% respectively (millions of yen). Growth business, human capital and digital-related investments totaling approximately ¥14.0 billion were executed during the Phase II period, and cross-shareholdings were reduced by ¥4,737 million, a 21.8% reduction compared to the end of fiscal 2022. The company was selected for the CDP “A List” and obtained SBT certification.

The next medium-term management plan, Phase III (FY2026–FY2029), carries the slogan “Evolving Toward the Creation of Comfort Value” and positions digital and green initiatives as twin growth drivers. Quantitative targets to be achieved by the end of FY2029 are completed construction revenue of 200 billion or higher, an operating profit margin of 12% or higher, ROE of 18% or higher, a ratio of policy-held shares to net assets below 20%, progressive dividends with DOE of a minimum of 5% through FY2029, and acquisition of treasury stock of around 2 million shares. Over the four-year plan period the company expects to generate JPY 60.0 billion in free cash flow from business operations, of which approximately JPY 30.0 billion will be allocated to growth investments and around JPY 30.0 billion returned to shareholders. For the fiscal year ending March 31, 2030 (FY2029) the company targets net sales of completed construction contracts of ¥200.0 billion or more, an operating profit margin of 12% or more, ROE of 18% or more, and orders carried forward of ¥200.0 billion or more.

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.