Obayashi (1802) Q1 2025 earnings summary

Executive summary

• Consolidated net sales for Q1 FY2024 reached ¥574.7 billion, up 17.9% year-over-year, driven by large-scale domestic and overseas projects and MWH consolidation.

• Operating income surged to ¥15.3 billion, a 268.9% increase year-over-year, reflecting higher profitability in domestic building construction and MWH impact.

• Profit attributable to owners of parent rose to ¥25.8 billion, up 292.1% year-over-year, aided by improved construction profitability and cross-shareholding sales.

• Orders received totaled ¥693.7 billion, a 29.7% increase year-over-year, with significant contributions from large-scale overseas projects and the North American subsidiary.

• Total assets decreased 2.3% from March 2024 to ¥2,948.8 billion, mainly due to lower cash and investment securities after shareholding sales.

Financial highlights

• Consolidated net sales: ¥574.7 billion (+17.9% YoY); operating income: ¥15.3 billion (+268.9% YoY); net income: ¥25.8 billion (+292.1% YoY).

• Non-consolidated net sales: ¥373.5 billion (+9.4% YoY); operating income: ¥8.5 billion (vs. loss of ¥0.7 billion YoY); net income: ¥24.1 billion (+525.8% YoY).

• Net sales of completed construction contracts increased by ¥86.2 billion year-over-year to ¥554.0 billion.

• Orders received for overseas civil engineering jumped by ¥145.2 billion year-over-year, reflecting MWH consolidation and large-scale projects.

• Real estate business net sales and operating income increased due to higher sales at Obayashi Shinseiwa Real Estate and rental business at Obayashi Properties UK.

Outlook and guidance

• FY2024 consolidated net sales forecast: ¥2,510.0 billion (+7.9% YoY); operating income: ¥93.0 billion (+17.2% YoY); net income: ¥87.0 billion (+15.9% YoY); EPS: ¥121.34.

• Orders received forecast at ¥2,520.0 billion, maintaining a high level amid strong domestic demand.

• No revisions made to forecasts announced on May 13, 2024; Q1 net sales at 22.9% of annual guidance.

• Dividend forecast for FY2024: ¥80 per share (unchanged), with a payout ratio of 65.9%.