Obayashi (1802) Q3 2026 earnings summary

Executive summary

• FY2025 full-year forecasts were revised upward, with operating income now expected at ¥195.0B and profit attributable to owners of parent at ¥170.0B, reflecting strong profitability in construction and real estate segments.

• Nine-month results show consolidated net sales of ¥1,832.4B (down 3.6% YoY), operating income of ¥142.7B (up 46.2% YoY), and profit attributable to owners of parent at ¥131.7B (up 37.3% YoY).

• Dividend forecast raised to ¥87 per share, maintaining a DOE of around 5% and a payout ratio of 35.7%.

• Total assets grew 3.4% to ¥3,145.7B, with net assets up 3.1% to ¥1,248.3B, reflecting increased retained earnings and treasury stock acquisition.

Financial highlights

• Consolidated operating income for the first nine months rose by ¥45.1B YoY, driven by additional claim approvals, change orders, and highly profitable projects.

• Gross profit on completed construction contracts increased across domestic building, civil engineering, and overseas construction, rising to ¥263.5B, a 27.7% increase YoY.

• Orders received for the nine months totaled ¥2,009.5B, down 4.5% YoY, reflecting strategic alignment with construction capacity.

• EPS for the period was ¥188.39, up from ¥133.84 in the prior year.

• Interest-bearing debt increased 38.2% to ¥501.4B as of December 31, 2025.

Outlook and guidance

• Full-year forecast for FY ending March 31, 2026: net sales ¥2,570.0B (down 0.8% YoY), operating income ¥195.0B (+36.9%), ordinary income ¥205.0B (+34.7%), profit attributable to owners of parent ¥170.0B (+17.0%), and EPS ¥244.03.

• Forecasts were revised upward for operating and ordinary income, reflecting improved gross profit from cost reductions in domestic construction.

• Orders for FY2025 expected to decline YoY, reflecting a high base in FY2024 and strategic order selection.

• Dividend per share increased to ¥87, with a DOE target of 5%.