Obayashi (1802) Q1 2026 earnings summary

Executive summary

• Net sales for Q1 FY2025 were ¥523.7B, down 8.4% year-over-year, mainly due to fewer large domestic building completions and strategic order alignment.

• Operating income rose to ¥15.8B, supported by highly profitable projects and strong overseas civil engineering, offsetting domestic declines.

• Profit attributable to owners of parent was ¥18.1B, down 30.0% year-over-year, impacted by lower extraordinary income and shareholdings sales.

• Orders received decreased to ¥622.0B, reflecting fewer large project orders in domestic building and civil engineering.

• Ordinary income fell 9.1% to ¥18.4B, impacted by the absence of prior-year foreign exchange gains.

Financial highlights

• Gross profit increased to ¥54.3B from ¥51.6B year-over-year, with margin improvement due to profitable projects.

• Cash and deposits rose by ¥62.1B to ¥456.8B as of June 30, 2025; interest-bearing debt decreased by ¥5.4B to ¥357.3B.

• Equity declined to ¥1,117.5B, reflecting share buybacks and dividend payments; equity ratio improved to 38.8%.

• EPS for the quarter was ¥25.59, down from ¥35.98 in the prior year.

• Total assets decreased by ¥161.8B to ¥2,880.9B, mainly due to lower trade receivables.

Outlook and guidance

• Full-year consolidated net sales forecast at ¥2,560.0B, down 1.2% year-over-year; operating income forecast at ¥122.0B, down 14.4%.

• Profit attributable to owners of parent forecast at ¥100.0B, a 31.2% decrease year-over-year; EPS guidance at ¥143.86.

• New orders forecast at ¥2,700.0B, down 18.6% from FY2024, aligning with construction capacity.

• ROIC expected at 5.5%, exceeding the 5% target; ROE forecast at 8.7%, below the 10% target.

• No revisions to previously announced forecasts.