Obayashi (1802) Q3 2025 earnings summary

Executive summary

• Upward revision to FY2024 full-year forecasts, driven by strong domestic construction, improved overseas profitability, and accelerated sale of cross-shareholdings.

• Announced share buyback of up to ¥100.0 billion by FY2026, with up to ¥30.0 billion to be repurchased by June 2025.

• Consolidated net sales for the nine months ended December 31, 2024, rose 10.6% year-over-year to ¥1,881.1 billion, driven by large domestic projects and overseas civil engineering consolidation.

• Operating income surged 89.8% year-over-year to ¥97.1 billion, with profit attributable to owners doubling to ¥95.5 billion, aided by improved construction profitability and sale of cross-shareholdings.

• Establishment of a new hotel management subsidiary in Thailand, expanding into hospitality.

Financial highlights

• FY2024 3Q consolidated net sales: ¥1,881.1 billion, up 10.6% year-over-year; operating income: ¥97.1 billion, up 89.8% year-over-year; profit attributable to owners: ¥95.5 billion, up 101.2% year-over-year.

• Orders received: ¥2,074.5 billion, up 28.1% year-over-year.

• Gross profit margin improved to 10.9% from 9.2% year-over-year.

• Interest-bearing debt increased 35.7% to ¥439.6 billion, mainly from commercial paper issuance.

• Dividend per share forecast for FY2024 is ¥80.00, up from ¥75.00 in FY2023.

Outlook and guidance

• FY2024 full-year net sales forecast revised to ¥2,610.0 billion (+12.3% year-over-year); operating income to ¥132.0 billion (+66.3% year-over-year); profit attributable to owners to ¥128.0 billion (+70.5% year-over-year); EPS ¥178.69.

• Orders received forecast raised to ¥3,260.0 billion (+29.7% year-over-year).

• ROE expected to reach 11.1% (previous: 7.6%), exceeding 10% target.

• Upward revision reflects favorable construction progress, improved profitability, and continued sale of cross-shareholdings.

• Annual dividend planned at ¥80 per share, DOE around 5%.